Analysis of ICICI bank and Bank of Rajasthan merger - Free Essay Example

Sample details Pages: 4 Words: 1122 Downloads: 3 Date added: 2017/06/26 Category Finance Essay Type Compare and contrast essay Did you like this example? Analysis of ICICI bank and Bank of Rajasthan merger– Reasons for the deal The promoter group of the Bank of Rajasthan (BoR) had been under immense pressure from regulatory authorities to restructure the Bank due to a variety of problems from 2009 onwards. RBI levied a penalty of INR25 lakhs in February, 2010 for a series of violations including extension of repayment period over permissible limits on intra-day overdraft, irregularities in the accounts of corporate groups, deletion of corporate records from the information systems , irregular property deals, actions against money laundering norms, and poor corporate governance. Further, the RBI nominated 5 directors for the Bank and appointed a new CEO. Don’t waste time! Our writers will create an original "Analysis of ICICI bank and Bank of Rajasthan merger" essay for you Create order Tayal family decided to merge BoR with ICICI Bank due to these regulatory actions. ICICI Bank was also looking for a target to increase their customer base and geographical reach in northern India. Important dates in ICICI Bank- Bank of Rajasthan Merger – Corporate Profile of ICICI Bank ICICI Limited was incorporated in the year 1955 by joint efforts of the Government of India, World Bank and representatives of the Indian Banking Industry’s. However, ICICI Bank was established in 1994. ICICI Bank had around 2000 branches in May 2010. An extensive range of Product and services offered by ICICI though diverse delivery channels are personal banking, corporate banking, retail banking, commercial banking, NRI banking, asset management, investment banking, finance and insurance, mortgages, credit cards. Merger experience: Since 2000, ICICI bank has been using mergers as a strategy to expand its geographical coverage, customer base and to meet regulatory req uirements. Merger with BoR is the 4th acquisition by ICICI Bank. Corporate Profile of Bank of Rajasthan The bank of Rajasthan was established in 1943. In the year ended March 31st, 2010, it had asset base of INR17,300.06 crores and it incurred net loss of Rs. 102.13 crores. The bank had around 463 branches spread across India. It also had 67 onsite and 29 offsite ATMs. The bank provides range of products and services in 3 segments including treasury operations, Banking operations and residuals. Glimpse of the Banks Merger Details Branches of Bank of Rajasthan will function as branches of ICICI Bank. A holder of 118 shares of BOR will be given 25 shares of the combined entity. Existing products of BoR will continue with same charges and features. Customers will get services as per existing procedures of Bank of Rajasthan. 58 branches of a regional rural bank sponsored by BOR will also be transferred to ICICI in addition to the other 468 branches. Negatives – BoR’s non-performing loans are a source of significant risk for the combined entity. As in FY-10 the net worth of BoR was approximately Rs. 760 crore and that of ICICI Bank Rs. 51,700 crore. For December 2009 quarter, BoR reported loss of Rs. 44 crore on an income of Rs.373 crore. Table 1 ICICI Bank offered to pay 188.42 rupees per share, in an all-share deal, for Bank of Rajasthan, a premium of 89 percent to the small lender, valuing the business at $668 million. The BoR approved the deal, which was subject to regulatory agreement. Strategic fit A merger will substantially increase the value of the firm only when there is a proper integration of strategic, financial, economic and organizational aspects. These factors are directly correlated to the performance of the firm after the merger. However, there should be proper strategic fit for a successful integration. Strategic similarity index gives the distance between banks by difference in the k ey strategic variables Table 2 Strategic Variables ICICI Bank (in %) Bank of Rajasthan (in %) Return on loan 12.71 16.30 Liquidity ratio 49.85 48.15 Financial leverage 14.21 5.40 Cost to income ratio (CIR) 87.86 106.86 Efficiency ratio 34.85 38.09 Loan to deposit ratio 89.71 55.31 CRAR 19.41 7.75 NPA 1.88 1.60 Source: Annual reports of the banks, Note: Calculations are based on secondary data Relative size of the target bank is a significant determinant of post-merger performance. A smaller size of BoR compared with ICICI implies easier integration, limited or no overlapping of branches, sharing of technology, etc. BoR’s CIR stands at 106% (including fee expenses) which show that their expenses exceed income. While ICICI Bank’s CIR stood at 87.87 % (including fee expenses). Financial leverage of ICICI Bank is higher than BoR which implies ICICI Bank has higher fixed expence obligations in terms of interest. The net NPA of the target bank is 1.6% against ICICI’s 1.87% but, in Capital Adequacy Ratio, the situation is worse for BoR. ICICI Bank has a strong CRAR of 19.4% against 9% prescribed by RBI and Basel II norms, whereas BoR’s CRAR is 7.74% which may harm the post-merger performance. BoR’s non-interest expenses (efficiency ratio) are more but, their earnings diversity (non- interest income) is better than ICICI Bank which may offs et in effect. The earnings diversification strategy indicates the bank’s exposure to the components of revenue other than interest income. Merger Announcement, Share Price Movements and Shareholding Pattern Changes The deal appears more favourable to BoR since their shareholders gained almost 90% between 07.05.2010 (the start of merger negotiations) and 23.05.2010 (Board Meeting approval). Swap ratio and relevant closing prices of banks Particulars ICICI Bank Bank of Rajasthan Swap ratio 1:4.72 ( 25:118) Price before a day of merger announcement 901.10 82.85 Price on the day of merger announcement 809.20 99.45 Price after a day of merger announcement 824.45 99.45 Source: Economic Times and website of NSE On February 26th, the closing price of BoR’s scrip was 61.8 and on 6th May, it was 84.7. This is the period where the bank faced serious actions from the regulators. During this period, the bank’s scrip value appreciated by 20.9% against the Bank Nifty return of 9.9%. Share price movement of Bank of Rajasthan February 26 to May 6 On May 6th, BoR’s scrip was at 84.7 and ICICI Bank was traded at 902.85. On May 17th, ICICI Bank and BoR recorded a price of 901.1 and 82.25 respectively. It indicates that merger negotiation has a zero effect on the price of merging entities. The Bank Nifty return for the period was 2.7%. Share price movement of BoR and ICICI Bank after the merger announcement (May 17 to June 28) On June 24th, BoR filed the information about the merger to the Bombay Stock Exchange. On May 16th, BoR’s price was 82.85. After the announcement of the merger, it shot up drastically to 99.45, 119.35, 131.30, 144.45, 158.9, and 162.3 on May 17th, 18th, 19th, 20th, 21th and 24th respectively. On the contrary, ICICI’s price reduced from 901.10 to 809.35. During the period, BoR gained about 77%, whereas ICICI lost 1.7% of its value. It is interesting to note that Bank Nifty showed a decline of 4.6 % during this period. Short term wealth creation of BoR can be read in line with the valuation and fixation of swap ratio. The indicative price agreed by both the banks was 188 per share. In the light of the present analysis, it can be concluded that there was not much vulnerability in the prices during the negotiation period. But, after the announcement, BoR’s share price adjusted almost to the price offered by ICICI.

Human trafficking in Haiti - 735 Words

Despite the fact that there is some governmental action towards human trafficking, it still exists in Haiti at a high rate. There are many factors contributing towards the continued existence of human trafficking in the country of Haiti; there are local, as well as outside factors that have helped to increase it in the region. Some of the local factors are; poverty, unemployment, illiteracy and poor education, a history of physical and sexual abuse, homelessness, drug abuse, gang membership, and the border with the Dominican Republic. The outside factors include high demand for modern slaves such as; domestic servants, sex workers, agricultural and factory workers around the world, governmental and economical crisis and disinterest ,natural disasters, machismo, corruption, and restrictive immigration policies in other countries (Seelke, 2013 p.4) Per the Haiti partners organization, the gross national income in Haiti is US $660, about half the total for Nicaragua which is the second poorest country in Latin America. At the same time, about 78% of Haitians are poor, they earn less than two US dollars a day, and about 54% live in extreme poverty with only one dollar per day. With that amount of money they barely have enough for clothing or food let alone education. Poverty has other consequences on the community such as, illiteracy and poor education. The estimated annual school cost is about $131 per children which is high enough for students not to attend school. 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In Slavery Today by Kevin Bales and Becky Cornell discuss the history of slavery across the globe. They state that â€Å"slavery has been around as long as human history† and thatRead MoreAbstract. This Memoir Employed A Mixed Methods Design To1562 Words   |  7 PagesThis memoir employed a mixed methods design to evaluate the current system of justice for minors in Haiti. The problem is several juvenile participants became involved in the formal justice system currently set up for adults, with no intervention effectiveness for juveniles. There are remedies that will prove effective. In the latter sections propose interventions in the Juvenile Justice system in Haiti that will reduce the rates of juvenile delinquency when implemented. Examination of juvenile reformRead MoreChallenges Of Transnational Organized Crime1260 Words   |  6 Pagesdiscussing the challenges human trafficking, drug trafficking, corruption and bribes, and illegal logging. At the end of each of the organised crime security challenges, this essay will discuss how these challenges differ from traditional security threats. The traditional security paradigm is focused on physical and external security threats to states. It promotes that security should be state centred and national security is primary over other securities, such as human security. States must defend

How Much Does It Really Cost to Apply to College

The cost of applying to college will often involve much more than the application fee, and it isnt unusual for a student applying to selective colleges to spend well over $1,000 before ever setting foot in a college classroom. Standardized test registration fees, score reporting fees, and travel for college visits all contribute to the total cost of the application process. College Application Fees: Nearly all colleges charge a fee for applying. The reasons for this are two-fold. If applying was free, the college would get a lot of applications from applicants who arent very serious about attending. This is particularly true with the Common Application that makes it so easy to apply to multiple schools. When colleges get lots of applications from students who arent overly interested in attending, its hard for the admissions folks to predict the yield from the applicant pool and accurately reach their enrollment goals. The other reason for the fees is an obvious financial one. Application fees help cover the expenses of running the admissions office. As an example, the University of Florida got 29,220 applicants in 2015. With an application fee of $30, thats $876,000 that can go towards admissions costs. That may seem like a lot of money, but realize that the typical school spends thousands of dollars for each student it enrolls (admissions staff salaries, travel, mailings, software costs, fees paid to SAT and ACT for names, consultants, Common Application fees, etc). College fees can vary significantly. A few schools such as St. Johns College in Maryland have no fee. More common is a fee in the range of $30 to $80 depending on the type of school. The countrys most selective colleges and universities tend to be on the upper end of that range. Yale, for example, has an $80 application fee. If we assume an average cost of $55 per school, an applicant applying to ten colleges will have $550 in costs for fees alone. The Cost of Standardized Tests: If youre applying to selective colleges, chances are youll be taking several AP exams as well as the SAT and/or ACT. Youre likely to take the SAT or ACT even if youre applying to test-optional colleges  Ã¢â‚¬â€Ã‚  schools tend to use the scores for course placement, scholarships, and NCAA reporting requirements even if they dont use the scores in the actual admissions process. Ive written in detail about the cost of the SAT and cost of the ACT in other articles. In short, the SAT costs $46 which includes the first four score reports. If you apply to more than four schools, additional score reports are $12. The ACT costs are similar in 2017-18: $46 for the exam with four free score reports. Additional reports are $13. So the very minimum youll pay for the SAT or ACT is $46 if youre applying to four or fewer colleges. Much more typical, however, is a student who takes the exam more than once and then applies to six to ten colleges. If you need to take SAT Subject Tests, your cost will be even higher. Typical SAT/ACT costs tend to be between $130 and $350 (even more for students who take both the SAT and the ACT). Advanced Placement exams add more money to the equation unless your school district covers the cost. Each AP exam costs $93. Most students applying to highly selective colleges take at least four AP classes, so it isnt unusual for AP fees to be several hundred dollars. The Cost of Travel: Its possible, of course, to apply to colleges without ever traveling. Doing so, however, isnt advisable. When you visit a college campus, you get a much better feel for the school and can make a much more informed decision when choosing a school. An overnight visit  is an even better way to figure out if a school is a good match for you. Visiting campus is also a good way to demonstrate your interest and can actually improve your chances of being admitted. Travel, of course, costs money. If you go to a formal open house, the college is likely to pay for your lunch, and if you do an overnight visit, your host will swipe you into the dining hall for meals. However, the costs of meals traveling to and from the college, the cost of operating your car (typically over $.50 per mile), and any lodging expenses will fall on you. For example, if you do an overnight visit at a college that isnt near your home, your parents are likely to need a hotel for the night. So what is travel likely to cost? Its really impossible to predict. It can be almost nothing if you apply only to a couple local colleges. It can be well over a thousand of dollars if you apply to colleges on both coasts or go on a long road trip with lots of hotel stays. Additional Costs: Ambitious students who have the means often spend far more on the application process than Ive outlined above. An ACT or SAT prep course will cost hundreds of dollars, and a private college coach can cost thousands of dollars. Essay editing services are also not cheap, especially when you realize that you may have over  a dozen different essays with each schools supplements. A Final Word on the Cost of Applying to College: At a bare minimum, youre going to pay at least $100 to take the SAT or ACT and apply to a local college or two. If youre a high-achieving student applying to 10 highly selective colleges in a wide geographic area, you could easily be looking at $2,000 or more in costs for application fees, exam fees, and travel. Ive encountered many students who spend more than $10,000 applying to schools because they hire a college consultant, fly to schools for visits, and take numerous standardized tests. The application process, however, does not need to be prohibitively expensive. Both colleges and the SAT/ACT have fee waivers for low-income students, and things such as consultants and expensive travel are luxuries, not necessities.

Role Of Monopolies And Restrictive Trade Practices Essay

(A CRITICAL ANALYSIS) BY: SUDHIR KUMAR DWIVEDI (Assistant Professor, Law) (Jaipur National University, Jaipur) E-mail: adv.skdwwivedi@gmail.com Mob. No. 09013456805, 07240503103 During economic reforms of 1990 it was observed that monopolies and restrictive trade practices (MRTP) has become outdated in context to international economic development relating to competition law and a new law which may reduce monopolies and promote competition , is required. After 1990s India witnessed a drastic increase in international trade law. During this period there was great increase in the volume and value of trade in goods and services, in cross border merger and acquisition (ME) and in foreign and direct investment. By passing of time restriction on foreign direct investment (FDI) were reduced. however Competition Act has come into force to replace Monopolies and restrictive trade practice (MRTP) Act ,1969. 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Short History of Bank Free Essays

The History of JPMorgan Chase Co. 200 Years of Leadership in Banking Table of Contents 1 2 3 4 5 6 7 8 9 10 11 12 12 13 14 14 15 16 16 This bronze sculpture, A River, is a cast of a famous work created by Jean-Jacques Caffieri in 1759. It depicts Oceanus, the Greek god of water. We will write a custom essay sample on Short History of Bank or any similar topic only for you Order Now Oceanus was portrayed in the bank’s first logo, representing its origin as a water company. The Bank of The Manhattan Company used numerous versions of Oceanus from its founding in 1799 through the mid-1950s when it merged with Chase National Bank. Introduction The Beginning: The Manhattan Company Early Growth of Banks The Civil War and National Banking Origins and Influence of J. P. Morgan Co. Financing Major Projects Banking at the Beginning of the 20th Century The World War I Years The Roaring ’20s The 1929 Market Crash and the Great Depression First-Class Business Glass-Steagall World War II Global Banking Banking Industry Consolidation Development of Credit Cards ATMs and Debit Cards Home Banking by Computer Difficult Competitive Environment Erosion and Repeal of Glass-Steagall Deregulation and Industry Consolidation Key Mergers That Shaped JPMorgan Chase Co. JPMorgan Chase Co. Today Cover Image References 17 17 19 20 21 The History of JPMorgan Chase Co. Introduction JPMorgan Chase Co. is one of the world’s oldest, largest and best-known financial institutions. Since our founding in New York in 1799, we have succeeded and grown by listening to our customers and meeting their needs. As a global financial services firm with operations in more than 50 countries, JPMorgan Chase Co. combines two of the world’s premier financial brands: J. P. Morgan and Chase. The firm is a leader in investment anking; financial services for consumers, small business and commercial banking; financial transaction processing; asset management; and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase Co. serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients. JPMorgan Chase Co. is built on the foundation of more than 1,000 predece ssor institutions that have come together over the years to form today’s company. Our many well-known heritage banks include J. P. Morgan Co. , The Chase Manhattan Bank, Bank One, Manufacturers Hanover Trust Co. Chemical Bank, The First National Bank of Chicago and National Bank of Detroit, each closely tied in its time to innovations in finance and the growth of the United States and global economies. The pages that follow provide highlights of the JPMorgan Chase Co. story – our history, our predecessor institutions, our people, our services and our philosophy. The Bank of The Manhattan Co. , JPMorgan Chase Co. ’s earliest predecessor, commissioned this striking silver Tiffany Co. ashtray in the 1950s. 1 The Beginning: The Manhattan Company Commercial banking in the United States got its start immediately after the Revolutionary War. The earliest American banks played a central role in the nation’s economic and industrial growth by lending money, safeguarding deposits and issuing bank notes that were used as currency. The Bank of New York – founded in 1784 by Alexander Hamilton, who became George Washington’s Treasury Secretary – was the first commercial bank in New York City. It had no competition until 1799 when Hamilton’s political rival, Aaron Burr, a U. S. Senator and future vice president of the United States, founded The Bank of The Manhattan Co. JPMorgan Chase traces its beginnings to Burr’s fledgling institution. The Bank of The Manhattan Co. had an unusual beginning. Burr led a group of New Yorkers, including Hamilton, in obtaining a state charter for a company to supply fresh water to the residents of Lower Manhattan. At Burr’s initiative, the charter included a provision allowing the company to employ its excess capital in any activity â€Å"not inconsistent with the Constitution and laws of the United States. † Burr then used that provision to start a bank. The waterworks, called The Manhattan Co. , laid a network of pipes made from hollowed pine logs and distributed water until 1842. The Bank of The Manhattan Co. outlived the waterworks and became one of the leading banking institutions in the nation – lending money and underwriting bonds, for instance, to help finance the Erie Canal, which opened in 1825. The Manhattan Co. wooden pipes carried water to more than 2,000 customers in Lower Manhattan for 43 years until the creation of New York City’s municipal water system. Wooden water pipes are still being unearthed by utility workers today. Alexander Hamilton collaborated with Aaron Burr and other civic leaders to establish The Manhattan Co. However, Hamilton opposed Burr’s insertion of a provision in its charter enabling the water company to open a bank and withdrew his connection to the new firm. Antagonism between these two men over a variety of issues raged until 1804 when Burr challenged Hamilton to a duel; Hamilton was mortally wounded. The pistols were owned by Hamilton’s brother-in-law, John Church, whose granddaughter sold them to The Bank of The Manhattan Co. in 1930. 2 The Chemical Bank in New York sold its factory in 1851, continuing solely as a bank. The bank used the engraving shown here of the factory on stock certificates in the 1950s. The stained glass window and 25 cent fractional note from 1817 are from The Western Reserve Bank in Warren, Ohio, Bank One’s earliest predecessor. Early Growth of Banks As America expanded and diversified in the 1800s, new banks were formed across the nation. JPMorgan Chase has historic links to many of these early institutions, including The Western Reserve Bank, one of the first banks in Ohio when it was organized in 1812; Second State Bank of Indiana, formed in 1834 when Indianapolis still was a frontier town with a population of about 1,500; and Springfield Marine and Fire Insurance Co. which began operation in Illinois in 1851. Abraham Lincoln was one of its first customers, depositing $310. All three banks are predecessors of Bank One, which merged with JPMorgan Chase in 2004. Individual states controlled the creation of banks in the early 1800s, and several states were highly restrictive in granting charters or awarding them only to organizers who belonged to the politi cal party in power. Demand for banking services was so great, however, that entrepreneurs sometimes found ways to get around such prohibitions. Some of the banks were offshoots of industrial or commercial businesses. New York Manufacturing Co. egan in 1812 as a manufacturer of cottonprocessing equipment and switched to banking five years later. It was a forerunner of Manufacturers Hanover Trust Co. on the JPMorgan Chase family tree. In 1823, the New York Chemical Manufacturing Co. began producing medicines, paints and dyes at a plant in Greenwich Village. It modeled its charter on The Manhattan Co. , using its excess capital in 1824 to later open a bank called The Chemical Bank, which joined the JPMorgan Chase family in 1996. To sidestep Wisconsin’s prohibition against banking, Scottish immigrant George Smith founded the Wisconsin Marine and Fire Insurance Co. n 1839, which, despite its name, operated like a bank by accepting deposits and issuing bank notes redeemable in gold . The notes, known popularly as â€Å"George Smith’s money,† were used as currency throughout the Midwest. By one estimate, they represented nearly 75% of the currency in circulation in Chicago in 1854. Smith’s company became the first legally approved bank in Wisconsin following statehood and later was known as The Marine Corp. , merging with Bank One in 1988. 3 The Baroque-era iron chest was used from 1809 to 1818 to transport currency and valuables between The Bank of The Manhattan Co. s Wall Street office and its branches in Utica and Poughkeepsie, New York. JPMorgan Chase Co. has an extensive collection of early currency, including the first $1 federal â€Å"greenback† note, printed in 1862 by the U. S. Treasury with the image of Salmon P. Chase. Chase National Bank’s first permanent office opened in 1878 at 104 Broadway – the first New York City bank without a Wall Street address. The Civil War and National Banking By 1860, just prior to the Civil War, the nation had more than 1,500 commercial banks with nearly $700 million of loans outstanding. The war brought challenge and change. The United States did not have a unified national currency when the war began. Instead, individual banks issued paper money in the form of notes. Although this system had served the nation well in its formative years, more than 7,000 different types of bank notes – of various shapes, sizes and colors issued by various banking institutions – were in circulation, resulting in confusion and inefficiency. The situation changed in 1862 when the Union began printing â€Å"greenback† currency to help finance the war. With the passage of the National Banking Act of 1863, the United States adopted a dual system of federal and state chartered banks. One of the pioneering institutions was The First National Bank of Chicago, which received federal charter number eight in 1863; First National became part of Bank One in 1998. Other predecessors founded or reorganized in the wake of the National Banking Act include Hanover National Bank (New York), Indiana National Bank (Indianapolis), The National Bank of Commerce (New York), State National Bank (Evanston, Illinois) and Union National Bank (Chicago). Initially, only a handful of banks applied for national charters, but the trickle soon became a flood in 1865 when the federal government began imposing a 10% tax on bank notes issued by state banks. By 1868, there were only 247 state banks left in the entire country compared with 1,640 national banks. Many thought that state banks would disappear altogether, but a surprising turnaround occurred: Forced to find a substitute for notes, state banks invented interest-paying demand deposits (deposits that could be withdrawn at any time). With this new service at their disposal, state banks rebounded and outnumbered national banks by 1894. Both types of institutions continue today, contributing to America’s decentralized banking system in which banks of varying sizes serve the needs of small businesses, large businesses and consumers in local, regional, national and international markets. During the severe economic downturn in the decade following the Civil War, John Thompson, a 75-year-old Wall Street publisher and banker, established Chase National Bank in a one-room office in Manhattan in 1877. Thompson named the bank in honor of his late friend, Salmon P. Chase, who had not only been President Lincoln’s Treasury Secretary but also had served as governor of Ohio and chief justice of the United States. The firm soon became a respected correspondent bank and expanded rapidly in the early 20th century by developing a large corporate business. By 1930, it was the world’s largest bank, with assets of $2. 7 billion. In 1955, it merged with The Bank of The Manhattan Co. to form The Chase Manhattan Bank. 4 This sterling silver guest book cover, 1895, and dinner service pitcher were commissioned for J. Pierpont Morgan’s yacht. Corsair was the name given to all four of the steam yachts owned by the Morgans between 1882 and 1943. J. Pierpont Morgan played a pivotal role in resolving the two-week-long financial crisis in October 1907. His syndicate memorandum outlined plans for the purchase of $30 million in bonds to prevent New York City from defaulting on its obligations. Origins and Influence of J. P. Morgan Co. JPMorgan Chase’s other namesake predecessor, J. P. Morgan Co. , was founded in New York in 1871 as Drexel, Morgan Co. by J. Pierpont Morgan and Philadelphia banker Anthony Drexel. The new merchant banking partnership served initially as an agent for Europeans investing in the United States, ultimately raising much of the capital to support American industrial expansion. It did not take long for the Drexel-Morgan partnership to establish itself as the nation’s pre-eminent private domestic and foreign bank. The firm made its first big splash in 1879 when it sold financier William Vanderbilt’s New York Central Railroad stock without driving down the share price. The deal – involving the largest lock of stock ever offered to that time – was a huge success, emphasizing Morgan’s strength as a mobilizer of capital and wholesaler of securities. From that point forward, the Morgan firm was closely associated with the railroad industry. Railroads in the United States were plagued throughout the late 19th century by overcapacity and rate wars, but J. Pierpont Morgan saw opportunity in the s ituation. He became an industry consolidator, reorganizing financially troubled railroads by cutting their costs, restructuring their debt, placing their stock in trusts he managed and appointing senior executives who were loyal to him. This process, called â€Å"Morganization,† was applied to the Northern Pacific, the Erie, the Reading and many other railroads. By the end of his career, Morgan had an integral role in approximately one-sixth of the track in the United States. J. Pierpont Morgan began his career as the New York agent of his father Junius’ London-based private bank. He became one of America’s most powerful and influential bankers, heading what became the nation’s pre-eminent private bank. As the American railroad network neared completion in the 1890s, the Morgan houses turned to providing funds for the great industrial mergers, including General Electric, U. S. Steel and International Harvester. J. P. Morgan Co. , as it later was known, became the most powerful investment bank in the world and J. Pierpont Morgan, known for his integrity and judgment, one of history’s most influential and powerful bankers, personally intervening in business disputes and orchestrating solutions during economic crises. When gold reserves fell in 1894, J. Pierpont Morgan formed a syndicate to save he gold standard for the U. S. government and, through his influence, played a central role during the 1907 financial panic, saving several trust companies and a leading brokerage house, bailing out the City of New York and rescuing the New York Stock Exchange. 5 Orville Wright’s passbook from 1912 to 1918 from his account at Bank One predecessor Winters National Bank in Dayton, Ohio. Predecessors of Texas Commerce Bancshares, Inc. helped finance the Houston Ship Channel, today one of the busiest waterways in the United States, linking the port of Houston and petrochemical plants along the channel with the Gulf of Mexico. Financing Major Projects The late 19th and early 20th centuries were an era of memorable engineering projects and revolutionary technologies, many financed with capital from heritage JPMorgan Chase institutions. The Brooklyn Trust Co. was a major lender for the construction of the Brooklyn Bridge, completed in 1883, which featured the world’s longest suspension span. William L. Strong, founder of The New York Security Trust Co. , was a member of the American finance committee that raised funds for the Statue of Liberty’s pedestal, the largest 19th century concrete structure in the United States. In 1904, J. P. Morgan Co. helped finance the Panama Canal by raising $40 million for the U. S. government to buy land rights from the bankrupt French Panama Canal Co. The purchase, at the time, was the largest real estate transaction in history. 6 In 1911, Union National Bank and National Bank of Commerce in Houston, predecessors of legacy institution Texas Commerce Bancshares, Inc. , helped finance the construction of the 50-mile-long Houston Ship Channel, one of the largest public projects in the Southwest. These banks persuaded other Houston banks to purchase unsold municipal bonds issued to finance the channel’s construction. The Houston Ship Channel opened in 1914 to great fanfare and today is one of the busiest waterways in the United States. Apart from major construction projects, Winters National Bank in Dayton, Ohio, was present at the birth of aviation, providing banking services to the pioneering Wright brothers from the early years of their bicycle shop in the 1890s through their invention of the world’s first successful airplane. The Statue of Liberty was partly financed by a group that included the president of a Chemical Bank predecessor, The New York Security Trust Co. This bank later merged with The Liberty National Bank, which used the statue as its logo between 1891 and 1921. The Brooklyn Trust Co. , a Manufacturers Hanover Trust Co. predecessor, helped finance construction of the Brooklyn Bridge, which opened in 1883. Pictured here are regional predecessors, from left to right: First National Bank of Mantua, Ohio; National Exchange Bank, Milwaukee, Wisconsin; and South Texas National Bank. Porters carrying a currency chest at Fourth National Bank, a Chase Manhattan Bank predecessor, in 1910. Banking at the Beginning of the 20th Century Banking at the dawn of the 20th century was different in many ways than it is today. Most states – the primary banking regulators at the turn of the century – prohibited or severely restricted branching, fearing that small banks might have trouble competing with large banks if branching were allowed. As a result, the United States was a nation of one-office banks, the vast majority of which were small institutions. In 1898, New York became one of the first states to permit branch banking on a limited scale when it allowed New York City banks to have branches anywhere in the city’s five boroughs. The Corn Exchange Bank, a predecessor of Chemical Bank, quickly capitalized on the new rules, opening a dozen branches within four years and changing its focus from providing credit to grain merchants to serving retail customers. When New York City inaugurated its subway system in 1904, the bank opened branch offices in residential areas along the subway lines to serve commuters. In 1913, Congress established the Federal Reserve System to regulate the money supply and manage the economy. The Federal Reserve formally assumed the role of central banker that had been informally held by J. Pierpont Morgan for years. The Federal Reserve Act of 1913 gave national banks the right to make real estate loans and exercise trust powers. The 19th century corporate seal shaped like a lion’s head and the Brandt Automatic Cashier, a mechanical change maker from the 1920s used by bank tellers, are examples of early mechanical devices used in banks. 7 Guaranty Trust Co. mployees, below, posed at an officers’ training camp in Plattsburgh, New York, in 1917. The Ouachita National Bank in Monroe, Louisiana, distributed this 1919 customer brochure, left, profiling important leaders in the Allied cause. Patriotic imagery was used extensively in posters to spur sales, as in this one from 1918. Many JPMorgan Chase Co. predecessors were active in the distribution of War Bonds that helped finance the American war effort. The World War I Years World War I was devastating for Europe, America and the world. Many bank employees joined the armed forces, in some cases giving their lives. J. P. Morgan Co. played a major role in financing the Allied victory. In September 1915, the firm arranged a $500 million Anglo-French loan, at that time the largest foreign loan in Wall Street history. Moreover, the firm was chosen by the European Allies as their U. S. purchasing agent. Its purchases during the war – involving everything from horses to artillery shells – came to $3 billion, representing nearly half of all American supplies sold to the European Allies. The war was, at the same time, a watershed for the U. S. economy and the nation’s banks. The United States was a net debtor nation when the war began in 1914. After the war, with many parts of Europe in ruins and desperately in need of reconstruction loans, the United States supplied much of the capital and became a net creditor nation. In the process, New York emerged as the world’s leading capital market. Before the United States entered the war, J. P. Morgan Co. aided the British and French, arranging a $500 million loan that was offered to investors in the United States. Britain’s King George V sent this cable personally thanking J. P. Morgan, Jr. , for his wartime help. Shanghai The Roaring ’20s The banking industry changed dramatically in the 1920s, a decade of innovation and diversification. Many banks formed investment departments to meet customer demand for government and corporate securities. Some large banks went beyond the marketing of securities and established underwriting affiliates. Chase National Bank and Guaranty Trust Co. in New Y ork became major players in the underwriting business – Chase in 1917 through its Chase Securities Corp. affiliate and Guaranty Trust through its Guaranty Co. affiliate, established four years later. Diversification took banks into other areas as well. In 1919, The First National Bank of Chicago created an affiliate, First National Investment Co. , which invested in second mortgages and operated a travel agency. The 1920s also saw a wave of bank mergers, failures and voluntary liquidations, with the result that the number of banks in the United States declined by 20% from 1921 to 1929. Global expansion was another key theme of the 1920s, made possible by the Federal Reserve Act of 1913, which removed many legal obstacles in the chartering of overseas branches. Ironically, some banks suddenly found it easier to establish branch offices in distant lands than to overcome state anti-branching laws in order to open branches at home. Chase National Bank, after acquiring five banks during the 1920s and three Latin American branches in Cuba and Panama, merged with The Equitable Trust Co. of New York in 1930. Equitable Trust’s branches in Mexico City, London, Paris, Hong Kong, Paris Shanghai and Tianjin all became part of Chase when the two companies merged. Chase began the 1930s with one of the banking industry’s larger overseas branch systems, with a presence in Europe, Asia and Latin America. The Chase-Equitable merger not only created the world’s largest bank in terms of assets and deposits but also gave the Rockefeller family, which controlled Equitable, a strong connection to Chase. The Rockefellers have been associated with Chase ever since. Not only were banks interested in foreign opportunities, so were many stock market investors. In 1927, Guaranty Trust Co. opened the way for Americans to buy foreign stocks by inventing the American Depositary Receipt (ADR). JPMorgan Chase Co. continues as the leading ADR depositary bank today. San Juan London Foreign branches, such as those in Shanghai, Paris, San Juan and London, offered full-service banking in the 1920s, including trade financing and government loans. 9 On March 24, 1933 customers mobbed the new National Bank of Detroit to open 562 accounts on the bank’s opening day, following six weeks without banking services in Detroit. Customers brought in bundles of currency and coins ranging from a few hundred to several hundred thousand dollars. Numerous First National Bank of Chicago customers wrote letters to Melvin Traylor, the bank’s president, thanking him for inspiring confidence and offering him their support. The 1929 Market Crash and the Great Depression Although the banking industry had an abundance of money to lend in the 1920s, large corporations borrowed less, choosing instead to finance a sizable portion of their capital needs in the stock and bond markets. Consequently, banks sought new lending outlets, including loans to individuals speculating in the stock market. As the stock market rose, these loans produced solid returns. But when the market crashed in October 1929, many of the loans went into default. For the banking industry, the 1930s would be the most difficult period in history. In the years after the crash, thousands of banks faced hard times because of loan losses, depositor withdrawals, 10 inadequate reserves and, in some cases, the collapse of speculative investments made in the 1920s. Even well-capitalized, well-managed institutions were battered by the financial panics that swept across the nation. In June 1932, depositors began withdrawing money from First National – Chicago’s largest bank – when unknown individuals circulated flyers claiming First National was insolvent. Media reports speculated that the attacks were the work of political enemies of First National’s president, Melvin Traylor, considered a potential Democratic Party nominee for U. S. president. Traylor responded to the attacks with an impassioned speech, attesting to First National’s soundness, ending the run. In Houston, two of the city’s major banks were on the brink of collapse in October 1931. National Bank of Commerce President Jesse Jones called a secret meeting of the city’s bank leaders, urging them to pool $1. 25 million to save the failing institutions. Some of the bankers did not want to risk any of their limited capital, but Jones argued that allowing the two banks to collapse might bring down the entire banking sector in the city. A rescue was finally agreed to, including the absorption of one of the failing banks by Jones’ National Bank of Commerce. Because of his leadership, not a single bank in Houston collapsed during the Depression. While thousands of banks across the country went out of business during the ’30s, JPMorgan Chase predecessor National Bank of Detroit was formed at the very depths of the Depression. After Michigan’s governor declared an eight-day bank holiday in February 1933 – closing all of Michigan’s banks so they could regroup financially – Detroit’s two largest banks lacked the funds to reopen, leaving the city virtually without banking services for the next six weeks. General Motors Corp. and the federal Reconstruction Finance Corp. , the government agency that provided emergency financing to banks, stepped into this void to establish National Bank of Detroit. Local corporations and consumers, desperate for checking services, flocked to the new institution. On the bank’s first day, Chrysler Corp. deposited $4 million, General Motors $1 million and General Electric Co. $500,000. The two founding institutions divested their ownership in the 1940s, and National Bank of Detroit grew into the largest bank in Michigan. It merged with First Chicago Corp. in 1995 to form First Chicago NBD Corp. â€Å"first-class business †¦ in a first-class way† In May 1933, J. P. Morgan, Jr. , who had become the senior partner of J. P. Morgan Co. following his father’s death in 1913, testified at a series of Senate committee hearings. He publicly stated the guiding principle of his firm – to conduct â€Å"first-class business †¦ in a first-class way. † First-Class Business In May 1933, J. P. â€Å"Jack† Morgan, Jr. , as well as several Morgan partners and other major bank executives, testified at hearings held by the Senate Committee on Banking and Currency investigating the causes of the 1929 stock market crash and the subsequent banking crisis. The hearings raised the question of the role banks played in the speculative fever leading up to the crash. J. P. Morgan Co. as the first private bank investigated and Jack Morgan the first Morgan witness. In his opening statement, Jack Morgan emphasized with great dignity the duties and ethics of the private banker upheld by three generations of Morgans at the firm and still a cornerstone of JPMorgan Chase Co. today: â€Å"If I may be permitted to speak of the firm of which I have the honour to be the senior partner, I should state that at al l times the idea of doing only first-class business, and that in a firstclass way, has been before our minds. We have never been satisfied with simply keeping within the law, but have constantly sought so to act that we might fully observe the professional code, and so maintain the credit and reputation which has been handed down to us from our predecessors in the firm. † This building at 23 Wall Street, which opened in 1914, was the headquarters of J. P. Morgan Co. for 75 years. It embodied the discreet style of business that characterized the firm. The building facade never bore a name, only the number 23 on its entrance doors. 11 Wartime volunteer activities of bank employees included holding blood drives, assembling care boxes, knitting clothes and raising money to buy ambulances. Chase National Bank employees folded surgical dressings. Arm bands, far left, were given to New York’s Manufacturers Trust Co. air raid wardens. World War II ad campaigns promoted the patriotic efforts of banks as bond sellers, buyers of Treasury securities and lenders to industry. Glass-Steagall In the wake of the banking crisis, President Franklin D. Roosevelt’s administration sought legislation to reduce banking risk. Congress responded by passing the Banking Act of 1933. Popularly known as GlassSteagall, the act created federal deposit insurance, prohibited the payment of interest on checking accounts and authorized the Federal Reserve to impose a ceiling on the interest banks could pay on time deposits and savings accounts. Equally important, the law erected a wall between commercial banking (taking deposits and making loans) and investment banking (underwriting securities). Three predecessors, in particular, had to make a choice. J. P. Morgan Co. , still the world’s most powerful bank, chose to continue as a commercial bank, spinning off its investment banking activities. Guaranty Trust Co. , which also had a major presence in commercial and investment banking, closed its securities affiliate and underwriting business. Morgan and Guaranty merged in 1959 to create Morgan Guaranty Trust Co. of New York, later forming a holding company that restored the famous J. P. Morgan Co. name. For Chase National Bank, the decision was relatively easy. Its newly elected chairman, Winthrop Aldrich, had spoken out publicly in favor of driving a wedge between commercial and investment banking. Chase National complied immediately with the new law, closing or spinning off all its Chase securities affiliates. World War II The banking industry recovered from the trauma of early 1933 and began to stabilize. More than 4,000 banks had failed during the year. In 1934, there were just 61 failures; over the next eight years, 53 institutions, on average, failed annually. After America entered the war in 1941, U. S. commercial banks again became the leading distributors of War Bonds, which were sold in denominations as small as $10. By war’s end, more than 60% of the American population had bought War Bonds, with total purchases coming to $186 billion. Hundreds of thousands of bank employees served in the military during the war. As men (and some women) left their jobs to enlist, banks appointed women to positions previously held by men – an initial small fracturing of the traditional male dominance of banking. The Great Depression had highlighted the need for increased global cooperation to avoid another worldwide economic collapse. Toward the end of World War II, policymakers in the United States, Great Britain and other nations began to develop an international system aimed at promoting financial stability and encouraging global trade. 12 During World War II, Valley National Bank, the largest bank in Arizona, offered a unique loan of up to $300 to airmen stationed at Arizona airfields, enabling them to travel on home leaves. One hundred percent of the airmen repaid their loans. In 1973, Chase Manhattan Bank Chairman David Rockefeller visited China and met with Chinese Prime Minister Chou En-Lai. Chase became the first U. S. correspondent to the Bank of China since the 1949 Chinese Revolution. London As one of the first U. S. banks to recognize growing international trade, Chase National Bank used a bold ad campaign to promote its capabilities abroad. Chase National Bank’s Tokyo branch initially concentrated on assisting American businesses in the development of trade with Japan. By the early 1950s, Chase opened a branch in Osaka, as well as additional branches on American bases in Japan, providing banking services to U. S. military personnel. Global Banking Globalization in the postwar period began slowly. By 1965, only 12 U. S. banks had opened branches outside the United States. These included five predecessors of JPMorgan Chase – The Chase Manhattan Bank, Chemical Bank, The First National Bank of Chicago, Manufacturers Hanover Trust Co. nd Morgan Guaranty Trust Co. Chase’s postwar expansion was led by David Rockefeller, who joined the bank in 1946 as assistant manager of the Foreign Department after serving in Army intelligence during World War II. He was elected vice president of Chase in 1949, president in 1961 and chief executive officer in 1969. In 1947, at the invitation of U. S. military Paris In 196 0, the newly formed Morgan Guaranty Trust Co. opened a second London branch on Berkeley Square. Its Paris office on the historic Place Vendome was acquired by J. P. Morgan Co. in 1917. It remains the firm’s main office in Paris today. authorities, Chase established the first U. S. postwar bank branches in Germany and Japan. These branches joined existing Chase branches in London and Paris and were followed by the opening of others around the world. In the 1970s, Chase added nearly 40 new branches, representative offices, affiliates, subsidiaries and joint ventures outside the United States, including two historic firsts in 1973: Chase opened a representative office in Moscow, the first presence for a U. S. bank in the Soviet Union since the 1920s; and Chase became the first U. S. correspondent to the Bank of China since the 1949 Chinese Revolution. In addition to Chase, several other predecessors transformed themselves into global institutions. Morgan Guaranty Trust Co. became a major international player. Prior to the merger with Guaranty Trust Co. , J. P. Morgan owned a one-third interest in London merchant bank Morgan Grenfell Co. while Guaranty had maintained a London office since early 1897. These operations were a platform for global expansion. By 1965, Morgan Guaranty had five overseas branches, and by 1978, it had 16. Among Midwestern banks, The First National Bank of Chicago was perhaps the most active internationally, establishing offices in 25 countries by 1973. By 1980, some 160 U. S. banks were operating branch or representative offices outside the United States. In turn, many banks in Europe, Asia and other regions extended their operations to the United States. 13 This 1955 ad announced the merger of Chase National Bank and The Bank of The Manhattan Co. Pictured here, from left to right, are logos from JPMorgan Chase Co. predecessor holding companies: Horizon Bancorp (N. J. ), American National Corp. (Ill. ), American Fletcher Corp. (Ind. ), Texas Commerce Bancshares, Inc. and First Banc Group of Ohio, later renamed Bank One Corp. Banking Industry Consolidation In addition to the powerful trend toward globalization, a second major postwar trend was industry consolidation through mergers, acquisitions and the formation of multi-bank holding companies. In New York City, a wave of mergers created a few big banks serving many customers through extensive branch networks. All four of JPMorgan Chase’s major New York City heritage firms – J. P. Morgan Co. , The Chase Manhattan Bank, Manufacturers Hanover Trust Co. and Chemical Bank – grew through mergers in the 1950s. After passage of the 1956 Bank Holding Company Act, all four created holding companies that gained popularity and helped shape the industry for decades. The new law allowed holding companies owning just one bank to diversify into some nonbanking activities. 14 First Banc Group of Ohio, formed in 1968, was one of the most innovative and successful multi-bank holding companies in the nation, created by City National Bank Trust Co. f Columbus and Farmers Saving Trust Co. , a smaller Ohio bank. First Banc Group acquired banks throughout Ohio and later extended its acquisitions to Arizona, Colorado, Indiana, Texas, Utah, Wisconsin and other states. The company later changed its name to Bank One Corp. the nation to offer customers a single retail charge account that provided credit at a citywide network of stores. In 1966, shortly before founding First Banc Group of Ohio, City National Bank Trust Co. of Columbus became one of the first banks outside California to introduce BankAmericard, the precursor of Visa. Five years later, City National was involved with the first major national test of point-of-sale terminals for processing credit card transactions. Manufacturers Hanover Trust Co. and Chemical Bank entered the national credit card business in 1969 as founding members of the Eastern States Bankcard Association. This group linked up with other regional bank groups to form a nationwide network that began issuing cards under the Master Charge Plan (now MasterCard), a direct competitor of BankAmericard. In 1981, Bank One received national attention for linking its Visa card issuance and data processing technology to several ajor brokerage firms’ money market funds, giving customers access to their money market accounts through their Visa cards. Propelled in part by the popularity of this new service, Bank One became the nation’s largest processor of Visa card transactions. Development of Credit Cards Although the first multi-use credit card was launched by Diners Club in 195 0, credit cards did not gain widespread public acceptance until the late 1960s. Several JPMorgan Chase predecessors played key roles. In 1958, The Chase Manhattan Bank introduced the Chase Manhattan Charge Plan, becoming the first New York City bank and one of the first in By 1969, the Chase Manhattan Charge Plan had become the leading bank credit card in the New York area. Through the vision and foresight of Chairman John G. McCoy, City National Bank Trust Co. launched several production model cashdispensing machines in 1970, using BankAmericard credit cards. Columbus, Ohio, became a test market for the new technology. ATMs and Debit Cards JPMorgan Chase predecessors were instrumental in introducing automated teller machines (ATM), which revolutionized banking by allowing customers to conduct transactions from almost any ATM in the world. In 1969, Chemical Bank installed the first prototype cash-dispensing machine in America, a precursor of the ATM, becoming the first bank in the country to allow customers to withdraw cash 24 hours a day. City National Bank Trust Co. of Columbus also embraced the new technology, installing the first production-model cash-dispensing machines in 1970. Several predecessors of JPMorgan Chase also were instrumental in forming some of the early electronic banking networks to enable customers to withdraw funds from ATMs not only at their own banks but also at competitor banks. Marine National Exchange Bank of Milwaukee helped establish TYME (Take Your Money Everywhere); National Bank of Detroit was a founder of METROMONEY, the first shared electronic bank terminal program in Michigan; and in 1985, Chemical Bank and Manufacturers Hanover Trust Co. were among the founders of NYCE (New York Cash Exchange), the first automated teller network in the New York metropolitan area. Bank debit cards, introduced in the late 1970s, enabled customers to withdraw cash from ATMs, pay for retail purchases with a card in lieu of a check and access additional banking services. The Chase Manhattan Bank introduced the Chase Money Card – the first Visa debit card offered by a bank in New York. In 1969, Chemical Bank’s prototype cash-dispensing machine, developed by Docutel Corp. , was designed to be activated by magnetic-encoded Master Charge credit cards. 15 As promoted in this early 1980s ad, The First National Bank of Chicago offered the first bank account fully competitive with money market funds and insured by the Federal Deposit Insurance Corporation. Home Banking by Computer Several JPMorgan Chase predecessors played key roles in the development of home banking. In 1980, Bank One developed and tested one of the earliest online home banking services. Called Channel 2000, it allowed bank customers to view their bank and department store balances on a television screen, pay bills and shift money between accounts. The service worked over regular telephone lines; the Internet – which is used today for home banking – was not commercialized until 1987. In 1983, Chemical Bank introduced Pronto, the first major full-fledged online banking service. Using a home computer, modem and software, customers could pay bills, transfer funds, review account balances, track budgets and balance their checkbooks. After establishing the service in New York, Chemical began licensing it to banks around the country and later introduced a version for small businesses. In 1985, The Chase Manhattan Bank launched its electronic home banking service, called Spectrum, which not only permitted banking transactions but also allowed customers to buy and sell stocks through a discount broker affiliated with Chase. Difficult Competitive Environment The restrictions imposed on banks by Glass-Steagall began to erode in the 1970s as competition from nonbanking institutions and the growing role of echnology drove change. Innovative financial products were launched by brokers, mutual fund companies, savings banks and other providers – products that enabled customers to earn higher returns on their money and enjoy greater flexibility in managing their assets. Many of these products competed with savings accounts, checking accounts and other banking services. In this prolific environment of innovation and c hange, regulatory policies originally aimed at protecting banks were handicapping their ability to compete, and rate deregulation began slowly. In 1978, the Federal Reserve authorized banks to issue a new product – the six-month money market certificate with a variable rate ceiling tied to six-month Treasury bills. Nearly all of JPMorgan Chase’s predecessor banks offered the certificates. Later that same year, banks were authorized to introduce â€Å"sweep† services, overcoming the long-standing prohibition against paying interest on checking accounts. This helped banks compete with brokerage firm sweep programs and thrift institutions’ interest-paying NOW checking accounts, which combined checking and savings in a single account. When in 1979 commercial banks got regulatory approval to offer NOW checking accounts, The Chase Manhattan Bank was among the first to introduce the new service. Spurred in part by this piecemeal and sometimes complex deregulation, Congress passed the Depository Institutions Deregulation and Monetary Control Act of 1980, which phased out all savings rate ceilings on consumer accounts over a six-year period, completely removing the rate ceilings imposed by Glass-Steagall by 1986. Ever committed to advancing bank technology, JPMorgan Chase’s predecessors were innovators of early home banking technologies. Bank One tested Channel 2000 in 1980. 16 By the 1980s, debate over banking deregulation and the removal of barriers between commercial and investment banking had raged for nearly two decades. J. P. Morgan Co. Chairman Dennis Weatherstone, pictured in the 1986 Fortune article, was â€Å"eager for underwriting. † The Chase Manhattan Bank campaigned aggressively for the repeal of Glass-Steagall. A 1988 ad noted that 77% of business executives in non-financial firms supported repeal and that bank customers had been â€Å"denied the benefits of free enterprise for far too long. † Erosion and Repeal of Glass-Steagall Another fundamental element of GlassSteagall – the wall between commercial and investment banking – crumbled in response to market change, and JPMorgan Chase heritage institutions were in the center of the action. In 1987, The Chase Manhattan Corp. became the first commercial banking institution to receive Federal Reserve approval to underwrite commercial paper (unsecured short-term corporate debt). Another New York bank previously had been permitted to sell commercial paper as an agent, but Chase was the first to underwrite and deal in paper for its own account. The Fed quickly expanded the scope of the Chase ruling by allowing three major bank holding companies, including J. P. Morgan Co. Incorporated, to underwrite not only commercial paper but also mortgage-backed securities, municipal revenue bonds and securities backed by consumer receivables. The Federal Reserve further broadened its ruling in 1989 when it granted J. P. Morgan Co. Incorporated the authority to underwrite corporate debt, marking the first corporate debt securities offering underwritten by a commercial bank affiliate in the United States since Glass-Steagall was signed into law in 1933. One year later, the Fed approved Morgan’s application to underwrite stocks. In the wake of this landmark ruling, Morgan quickly built a leading investment banking operation and by 1997 was the fourth-largest securities underwriter in the world. Faced with the reality that the GlassSteagall barriers were being dismantled by regulators, Congress in 1999 passed the Gramm-Leach-Bliley Act, which removed the remaining barriers and allowed financial companies to participate fully across segments. Among other provisions, the new law allowed banks to acquire full-service brokerage and investment banking firms. Beginning in the 1980s, J. P. Morgan Co. Incorporated had developed its investment banking capability through internal development. Chase, by contrast, built its capability through merger, starting with the 1999 acquisition of San Francisco investment bank Hambrecht Quist, a specialist in the technology industry. Continuing its expansion, in 2000, Chase bought The Beacon Group, a merger and acquisition advisory and private investment firm, and London-based Robert Fleming Holdings Ltd. , an asset management and investment banking concern. Deregulation and Industry Consolidation The emergence of nationwide branch banking was another cornerstone of the changes taking place in financial services. As of 1975, banking was still primarily a local business. Only 14 states allowed statewide branching, and none permitted out-of-state banks to open branches within their borders. However, pressure for greater branching freedom was mounting, reflecting growing awareness of the consumer convenience of branches, the need for banks to diversify their risks beyond their local markets, and an emerging legislative consensus that deregulation would promote freer markets and greater competition. Branching deregulation occurred in the 1980s at the state rather than the federal level. In the period from 17 This graphic from a 1986 First Chicago Corp. internal newsletter identified the seven Midwest states that adopted reciprocal banking legislation. This permitted across-border bank acquisitions, which predecessors First Chicago Corp. , NBD Bancorp, Inc. and Bank One Corp. aggressively pursued. 1975 through 1990, more than 25 additional states – including New York, Ohio, Texas and others in which JPMorgan Chase predecessors operated – authorized statewide branching. In 1984, The Chase Manhattan Bank ventured to upstate New York by acquiring Lincoln First Banks Inc. in Rochester. Following the transaction, Chase had 330 branches across the state, the largest branch network in New York. As Illinois anti-branching laws were eased, First Chicago Corp. – the holding company for The First National Bank of Chicago – made a series of acquisitions to expand its business. In 1984, First Chicago acquired Chicago-based American National Corp. and three years later acquired First United Financial Services Inc. a five-bank holding company in suburban Chicago. The 1980s also saw the formation of regional banking zones, representing a major step toward national banking. Banc One Corp. (later Bank One) was especially active in acquiring banks not only in its home state of Ohio but in other states as well. Its first out-of-state acquisition was the purchase of Purdue National Corp. of Lafayette, Indiana, in 1984. By 1994, it owned 81 banks with more than 1,300 branches in 13 states, including banks in Wisconsin (The Marine Corp. , Illinois (Marine Corp. ), Colorado (Affiliated Bankshares of Colorado), Kentucky (Liberty National Bancorp), Oklahoma (Central Banking Group), West Virginia (Key Centurion Bancshares), Arizona (Valley National Corp. ) and Utah (Capital Bancorp). More acquisitions soon followed. Banking zones expanded rapidly in geographic size as more states passed reciprocal banking laws. In 1987, Chemical New York Corp. acquired Texas Commerce Bancshares, Inc. , the largest interstate banking merger in U. S. history at that time, and First Chicago Corp. cquired Beneficial National Bank USA of Wilmington, Delaware, becoming the third-largest issuer of bank credit cards in the United States. The growth of banking zones culminated in 1994 with the passage of the federal Riegle-Neal Interstate Banking and Branching Efficiency Act, which made national banking the law of the land. Riegle-Neal permitted bank holding compa nies to buy banks throughout the United States beginning in the fall of 1995 and permitted nationwide branching – that is, branch offices owned and operated by a single bank – as of June 1997. Many multi-state, multi-bank holding companies soon began to streamline operations by merging their banks. In 1999, Bank One Corp. integrated its banks in Ohio, Michigan, Indiana and Illinois into a single bank with the Bank One name. The 1990s represented a period of mergers and consolidation for the banking industry. Because of consolidation, the number of commercial banks in the United States declined to 7,549 as of mid-2005 from 12,343 at the end of 1990. However, the number of branches and automated teller machines continued to increase, providing consumers with more banking outlets than ever. 18 991 John F. McGillicuddy, left Manufacturers Hanover Corp. Walter V. Shipley, right Chemical Banking Corp. 1995 Richard L. Thomas First Chicago Corp. 1996 Thomas G. Labrecque The Chase Manhattan Corp. Walter V. Shipley Chemical Banking Corp. 1998 Verne G. Istock First Chicago NBD Corp. 2000 Douglas A. Warner III J. P. Morgan Co. Incorporated John B. McCoy Banc One Corp. William B. Harr ison, Jr. The Chase Manhattan Corp. Verne G. Istock NBD Bancorp, Inc. Key Mergers That Shaped JPMorgan Chase Co. Many JPMorgan Chase Co. predecessors took part in the merger movement that began in the early 1990s. Key transactions that led to the formation of JPMorgan Chase include: †¢ In 1991, Chemical Banking Corp. merged with Manufacturers Hanover Corp. , keeping the name Chemical Banking Corp. , then the secondlargest banking institution in the United States. †¢ In 1995, First Chicago Corp. merged with NBD Bancorp Inc. , forming First Chicago NBD Corp. , the largest banking company based in the Midwest. †¢ In 1996, Chemical Banking Corp. merged with The Chase Manhattan Corp. , keeping the name The Chase Manhattan Corp. and creating what then was the largest bank holding company in the United States. In 1998, Banc One Corp. merged with First Chicago NBD Corp. , taking the name Bank One Corp. Merging subsequently with Louisiana’s First Commerce Corp. , Bank One became the largest financial services firm in the Midwest, the fourth-largest bank in the United States and the world’s largest Visa credit card issuer. †¢ In 2000, The Chase Manhattan Corp. merged wi th J. P. Morgan Co. Incorporated, in effect combining four of the largest and oldest money center banking institutions in New York City (Morgan, Chase, Chemical and Manufacturers Hanover) into one firm called JPMorgan Chase Co. In 2004, Bank One Corp. merged with JPMorgan Chase Co. , keeping the name JPMorgan Chase Co. Fortune magazine said that â€Å"the combined bank will be big and strong in a panoply of businesses,† adding that â€Å"the deal has been widely lauded† by investment analysts. The New York Times said the merger â€Å"would realign the competitive landscape for banks† by uniting the investment and commercial banking skills of JPMorgan Chase with the consumer banking strengths of Bank One. †¢ In 2008, JPMorgan Chase Co. acquired The Bear Stearns Companies Inc. strengthening its capabilities across a broad range of businesses, including prime brokerage, cash clearing and energy trading globally. 2004 James Dimon Bank One Corp. William B. Harrison, Jr. JPMorgan Chase Co. 19 In over 45 years of collecting, JPMorgan Chase Co. has built an international art collection with great breadth and depth. The collection includes a diverse range of artwork, with representation from every country in which we do business. Tony Cragg Palette, 1980 Painted wood and found objects JPMorgan Chase Co. Today JPMorgan Chase Co. is a leading global financial services firm with operations in more than 50 countries and has its corporate headquarters in New York City. Under the J. P. Morgan and Chase brands, it serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients. Its six major businesses are: Investment Bank J. P . Morgan is one of the world’s leading investment banks, with deep client relationships and broad product capabilities. The Investment Bank’s clients are corporations, financial institutions, governments and institutional investors. The firm offers a full range of investment banking products and services in all major capital markets. Retail Financial Services Retail Financial Services helps meet the financial needs of consumers and businesses. Under the Chase brand, the consumer business includes credit card, small business, home finance, auto finance, home equity loans, education finance and insurance. Card Services Chase Card Services is one of the largest credit card issuers in the United States. The firm offers a wide variety of general purpose cards to satisfy the needs of individual consumers, small businesses and partner organizations. Commercial Banking Commercial Banking serves a variety of clients, including corporations, municipalities, financial institutions and notfor-profit entities. The firm’s broad platform positions Commercial Banking to deliver extensive product capabilities – including lending, treasury services, investment banking and asset management – to meet its clients’ needs. Treasury Securities Services Treasury Securities Services is a global leader in providing transaction, investment and information services to support the needs of institutional clients worldwide. Treasury Securities Services is one of the largest cash management providers in the world and a leading global custodian. Asset Management Asset Management is a global leader in investment and wealth management. Asset Management clients include institutions, retail investors and high-networth individuals in every major market throughout the world. 20 2. 5. . 4. 3. 10. 11. 12. 13. 8. 7. 6. 9. 14. 15. 16. 17. 18. FRONT COVER BACK COVER The JPMorgan Chase Archives Begun in 1975 by Chase Manhattan Bank Chairman David Rockefeller, the JPMorgan Chase Archives is one of the oldest corporate history programs in the United States. Recognized as an important corporate asset and an invaluable resource for financial history, the Archives has continually advanced the firm’s rich legacy by colle cting and preserving historical materials of JPMorgan Chase Co. and its more than 1,000 predecessor institutions worldwide. With over 7,000 feet of records, this extensive collection traces the remarkable origins, developments and achievements of the firm from 1799 to the present and documents key events and business decisions, offering valuable insight into the firm’s mission and vision. 1. South Texas National Bank, Texas Bank clerks, ca. 1900s 2. First National Bank, Youngstown, Ohio Blueprint detail of building facade, 1924 3. The Bank of The Manhattan Co. , New York, New York $100 note, ca. 1830s 4. The National Bank of Commerce, New York, New York $5 note, 1885 5. J. P. Morgan Co. , New York, New York J. Pierpont and J. P. â€Å"Jackâ€Å" Morgan, 1912 6. Lincoln-Alliance Bank, Rochester, New York Bronze table leg, early 1900s 7. Rapides Bank of Alexandria, Louisiana Hammond manual typewriter, ca. 1880s 8. The First National Bank of Chicago, Chicago, Illinois Bronze teller cage, 1931-1932 9. J. P. Morgan Co. , New York, New York J. Pierpont Morgan’s â€Å"M† document clip, ca. 1900s 10. Chase National Bank, New York, New York Check processing department, ca. 1940s 11. J. P. Morgan Co. , Paris, France 14 Place Vendome ceiling by Eugene Lacost, 1860 12. The Bank of The Manhattan Co. , New York, New York Vault lock, ca. 840s 13. The Chase Manhattan Bank, New York, New York Vault, 25 Broadway branch, 1921 14. The First National Bank of Chicago, Chicago, Illinois Exterior building clock, 1906 15. Manufacturers Hanover Trust Co. , New York, New York Gold scale, early 20th century 16. Wisconsin Marine and Fire Insurance Co. , Milwaukee, Wisconsin $3 note, ca. 1851-1858 17. The El Paso Ban k of Colorado Springs, Colorado Springs, Colorado $10 note, 1900 18. Chase National Bank, New York, New York Portrait bust of Salmon P. Chase, ca. 1870s Thomas Dow Jones, sculptor  ©2008 JPMorgan Chase Co. All rights reserved. How to cite Short History of Bank, Papers

Why I Want to Get My Ged free essay sample

A GED is an important part of life if one wishes to pursue further education but was unable to graduate high school for whatever reason. I myself earned a diploma through continental academy online but they had lost their accreditations a month before I enrolled so my diploma is essentially worthless. I am working towards earning my GED so I can go to college and learn about subjects I am interested in as well as learning new things and gaining new experiences. Several reasons contribute to why I am finally deciding to buckle down and get my GED, but I would have to say the biggest one is simply to gain more knowledge about everything that has to do with computers. In todays advanced world education is everything. Computers control almost everything and in turn must have reliable and properly educated people to run them. Getting my GED will allow me to further my knowledge of computers as well as their hardware and software. We will write a custom essay sample on Why I Want to Get My Ged or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Quite a lot of people don’t have jobs they like such as ones concerning manual labor, and without an education, is one of the only choices out there. I work for a tree service and it has taken its toll on my body, shoulder feels like its slipping out, bad knees, etc. With a GED and further education, I could get a less physically demanding job that I could enjoy doing and get paid while doing it. I believe the most important reason why I want to obtain my GED is for my own sense of felf well-being. Nothing could make me feel more accomplished than working towards improving the quality of my life and in turn improving the quality of life of those around and close to me. Since my diploma wasn’t able to help me, a GED is the next best choice. From furthering education, getting a job you want and can enjoy to going to college, making yourself feel accomplished and working towards a better life, a GED can be a gateway to all of these things and more.

Essay William Shakespeare s Hamlet Madness Essay Example For Students

Essay William Shakespeare s Hamlet Madness Essay Madness is a condition that is difficult to distinguish between true and false. As in the encounter of the ghost of Hamlet s father with Hamlet, Hamlet is asked to avenge his father s death. To accomplish this task in a less apparent manner, Hamlet decides to feign madness. In the long run, Hamlet truly does go insane. Consequently, his behavior thereafter is frequently unfathomable. William Shakespeare, the writer of the tragic play, Hamlet, leaves Hamlet s sanity up to interpretation. Throughout Shakespeare s Hamlet, Hamlet s questionable madness is explored through his real madness, feigned actions, and the reactions of others towards his madness. In some instances, Hamlet s madness can be seen as authentic. When Hamlet hacks through the arras and kills Polonius, How now! A rat? Dead for a ducat, dead! (Shakespeare 3.4. 25) Hamlet knows that the second Polonius opens his mouth to scream for help, it will not be the king behind the arras. He appears to vary in how mad he is, sometimes appearing completely sane, and sometimes more insane. His madness is mostly portrayed through his ramblings at the other characters, or through soliloquies. Originally Hamlet was only feining madness in order to reach his goals and discover if Claudius was really the one who killed father. He decides this after meeting the ghost of his dead father: â€Å"As I perchance hereafter shall think meet To put an antic disposition on-.†(Hamlet: 1.5. 171-172).The other characters pick up on his â€Å"madness† as the play progresses further. They were all curious as to the cause of Hamlet’s madness. Polonius and Claudius believe it may be caused by the lack of contact with Ophelia that they had caused, whereas Gertr. .some of the key characters in the story, and is shown in many different ways. Hamlet’s madness is more of an act than true madness. Early on in the story Hamlet decides to feign madness in order to get the truth about his father’s death out of his uncle, using the play as a means to do so. Shakespeare made it very debatable as to if Hamlet’s character was truly mad or not, but making audiences question his sanity with speeches like the famous â€Å"to be or not to be† soliloquy. Madness is also displayed in the character Ophelia, however within her character it was more prominent. She was already a weak and fragile character to begin with, and once her father died she descended into madness. Shakespeare showed madness in different ways with his characters in the play. In some cases it is debatable as to if the character was truly mad, but in others, it was clearly shown.