Bank One seeks to make amends for past ties to slavery
New Orleans, LA February 14, 2005
Prior to the Civil War, banks later acquired by Bank One accepted thousands of human beings as collateral for loans, researchers hired by the bank have discovered.
In response to the discovery, Bank One officials announced the formation of a scholarship program for African-American students in Louisiana. The bank also plans to make information about the fate of slaves acquired by the bank available to their descendants.
"We recently completed extensive research examining our company's history for any links to slavery to meet a disclosure commitment to the City of Chicago and other municipalities," said Bank One officials in a letter to the company's employees. "Today, we are reporting to Chicago that our research has discovered new information. Two predecessors Citizens Bank and Canal Bank in Louisiana served as banks to plantations from the 1830s until the Civil War, accepted enslaved individuals as collateral on loans, and sometimes took ownership of them when the plantation owners defaulted on the loans."
Bank One, which was bought out by JP Morgan Chase last year, made the disclosure in January in response to a Chicago ordinance requiring companies doing business with the city to disclose whether they profited from slavery. Although the ordinance took effect in 2003, Bank One's disclosure is one of the first major efforts by a company to examine its ties to slavery. J.P. Morgan Chase is based in New York.
"Slavery was tragically ingrained in American society but that is no excuse," said JP Morgan Chase Chief Executive William Harrison and Chief Operating Officer James Dimon in the letter. "We apologize to the African-American community, particularly those who are descendants of slaves, and to the rest of the American public for the role that Citizens Bank and Canal Bank played."
Although the Chicago ordinance doesn't penalize companies for involvement in slavery, companies who fail to disclose links to slavery could be prohibited from doing business with the city. Detroit and Los Angeles passed similar ordinances in 2003.
In addition to an apology for the predecessor banks' actions, Bank One announced the formation of a scholarship program, Smart Start Louisiana, which will provide $1 million a year for five years of scholarships for African-American students from Louisiana to attend college in Louisiana. The program mirrors a similar initiative in New York.
"Smart Start Louisiana will select scholars based upon merit and need," the letter said. "In addition, the students will have the opportunity to intern at the firm during the summer with the goal of being hired upon graduation."
The company is still working on the details of how the scholarship fund will work, said Bank One spokesman Chris Spencer. The company will probably have an
announcement within the next several weeks, he said.
To conduct the research into the banks' history, Bank One hired History Associates Inc., based in Rockville, Md., to pore through parish and county court records and university archives. Although the company examined the history of banks in Kentucky, Louisiana and Virginia, they found information involving slavery only about Citizens Bank and Canal Bank, which were founded in Louisiana in the 1830s.
Those banks, which provided loans to plantations in the mid-1800s prior to the Civil War, accepted approximately 13,000 slaves as collateral between 1831 and 1865, according to Bank One officials. The banks came to own approximately 1,250 slaves as the result of loan defaults. What happened to those slaves isn't clear.
"Our Chicago filing will list specific Louisiana landowners as well as the names of enslaved individuals, where the records reflect them," the Bank One letter said. "We are providing specific references about where we found the information to help people research their family history."
Citizens Bank and Canal Bank merged to become Canal Trust and Savings Bank in 1924. In 1931, according to Bank One, Chase Bank led a group of investors that provided capital to Canal Bank, and Chase Bank took a controlling interest in Canal Bank. In 1933, Canal Trust and Savings Bank failed and was liquidated.
Later that year, The National Bank of Commerce in New Orleans was formed under a federal charter, and its assets included some deposits and loans of the old Canal Trust and Savings Bank. In 1998, Bank One purchased the bank, which was by then called First National Bank of Commerce.
Although technically the 1933 Canal Trust and Savings Bank broke the ownership chain and Bank One could have avoided the issue altogether, the company's willingness to tackle the issue has garnered cautious praise from many African Americans.
However, Bank One's efforts are just a beginning, some say, and could be part of a larger effort to jumpstart programs promoting African-American entrepreneurship and economic equality.
"I understand that it stems from the Chicago ordinance, but to get out in front of it and embrace it and actually make the findings available, I see it as positive," said Dr. Donald Devore, education professor at Southern University of New Orleans. "In a general sense, I applaud it, although it would be nice if the conversation could be extended."
What Devore would like to see, he said, is for Bank One to lead an effort to improve economic conditions for African-Americans, possibly through seed money grants or low-interest loans for small businesses. A series of seminars or forums promoting entrepreneurship might also be helpful, he said.
Although information about what slaves the predecessor banks owned and what happened to them is still sketchy, Devore said, uncovering that information might serve as the basis for compensating descendants of those individuals.
"The larger question is the whole idea of not reparations but compensation for the actions of these companies," Devore said. "It would be positive to start a dialogue or conversation not to include just Bank One, but other institutions as well"