Manhattan Company

The Manhattan Company was a New York bank and holding company established on September 1, 1799. The company merged with Chase National Bank in 1955 to form the Chase Manhattan Bank. It is the oldest of the predecessor institutions that eventually formed the current JPMorgan Chase & Co.

For other companies with the "Manhattan" name, see Manhattan.

History

The Manhattan Company was formed in 1799 with the ostensible purpose of providing clean water to Lower Manhattan.[1] However, the main interest of the company was not in the supply of water, but rather in becoming a part of the banking industry in New York. At that time, the banking industry was monopolized by Alexander Hamilton's Bank of New York and the New York branch of the First Bank of the United States. Following an epidemic of yellow fever in the city, Aaron Burr founded the company and successfully gained banking privileges through a clause in its charter granted to it by the state that allowed it to use surplus capital for banking transactions.[2] The company raised $2 million, used one hundred thousand dollars for building a water supply system, and used the rest to start the bank.[3] The company apparently did a poor job of supplying water, using hollowed out tree trunks for pipes and digging wells in congested areas where there was the danger of raw sewage mixing with the water.[4] After a multitude of cholera epidemics, a water system was finally established with the construction between 1837 and 1842 of the Croton Aqueduct.

On April 17, 1799, the Manhattan Company appointed a committee "to consider the most proper means of employing the capital of the Company" and elected to open an office of discount and deposit. The "Bank" of the Manhattan Company began business on September 1, 1799, in a house at 40 Wall Street. In 1808, the company sold its waterworks, pocketing 1.9 million dollars, to the city and turned completely to banking. Even so, it identified as a water company as late as 1899. The Company maintained a Water Committee which yearly assured, quite truthfully, that no requests for water service had been denied, and moreover conducted its meetings with a pitcher of the water at hand to ensure quality. It is unclear whether anyone at these meetings actually tasted the water.[5]

The Bank started paying dividends in July 1800, and in 1853, the Manhattan Company became one of the original 52 members of the New York Clearing House Association. Pursuant to a merger agreement dated March 1, 1920 (and approved by the Superintendent of Banks on the same day), the Merchants' National Bank of New York merged with the Bank of the Manhattan Company,[6] effective March 27, 1920.[7] Merchants' then president, Raymond E. Jones, became vice president and second in command of the combined institutions.[8]

In 1923, it moved its headquarters briefly to the Prudence Building and then in 1929 built what was briefly the tallest building in the world at 40 Wall Street on the site of the Gallatin Bank Building. A 1929 merger made Paul Warburg its chairman. The Bank merged with Chase National Bank in 1955 to become Chase Manhattan.[9] In 1996, Chase Manhattan was acquired by Chemical Bank, who retained the Chase name, to form what was then the largest bank holding company in the United States.[10] In December 2000, the bank acquired J.P. Morgan & Co. to form JPMorgan Chase & Co.[11].

Standard Chartered Bank (Hong Kong) Limited continues (as of August 2020) to issue a credit card by the name of Manhattan, descending from its acquisition of the retail banking business in Hong Kong of Chase Manhattan in 2000.

See also

Footnotes
  1. Schulz, Bill (July 29, 2016). "Hamilton, Burr and the Great Waterworks Ruse". The New York Times. ISSN 0362-4331. Retrieved October 30, 2019.
  2. Schulz, Bill (July 29, 2016). "Hamilton, Burr and the Great Waterworks Ruse". The New York Times. Retrieved January 10, 2020.
  3. Chernow, Ron (2005). Alexander Hamilton. Penguin. pp. 587–588.
  4. Newman, Andy (April 18, 2013). "Early Water Delivery System in the City Cut Corners and Trees". The New York Times.
  5. John Kendrick Bangs. Harper's New Monthly Magazine, Vol XCVIII No.DLXIII, December 1898, p971 et seq. "A Historic Institution: The Manhattan Company", p
  6. "The Chase Manhattan Corporation | American corporation". britannica.com. Encyclopedia Britannica. Retrieved January 10, 2020.
  7. The Commercial and Financial Chronicle. National News Service. 1920. p. 265. Retrieved January 10, 2020.
  8. "RAYMOND E. JONES, BANKER 4 DECADES; Vice President of Manhattan Co. 23 Years Dies on Coast Began as Office Boy" (PDF). The New York Times. April 26, 1944. Retrieved January 10, 2020.
  9. Special To The New York Times (April 1, 1955). "Chase, Manhattan Banks 'Wed' With State's Blessing". The New York Times. ISSN 0362-4331. Retrieved January 15, 2017.
  10. Hansell, Saul (September 3, 1996). "After Chemical Merger, Chase Promotes Itself as a Nimble Bank Giant". The New York Times. ISSN 0362-4331. Retrieved October 30, 2019.
  11. "Fed Approves Chase-J.P. Morgan Merger". Los Angeles Times. December 12, 2000. Retrieved October 30, 2019.

Further reading
  • Brian Phillips Murphy, Building the Empire State: Political Economy in the Early Republic. Philadelphia, PA: University of Pennsylvania Press, 2015.
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