David Rockefeller and the Chase Manhattan Bank

September 25, 2007

David Rockefeller, the youngest of the five brothers, is the largest individual stock-
holder (one percent of the outstanding stock) and board chairman of the Chase Manhattan
Bank. 1 The Rockefeller family as a whole owns a solid 5 percent (a controlling in-
terest) of the bank's outstanding stock. While Chase, with $20 billion in assets (as
of April 1969) ranks second in the United States behind San Francisco's Bank of Ameri-
ca, it is probably the most influential U.S. commercial bank in international opera-
tions and holds a commanding lead over all rivals in two of the chief hallmarks of
major league banking:
1) Loans to business - an estimated $9 billion in loans outstanding in 1967;
2) Correspondent banking - Chase performs assorted chores for 5,900 correspondent banks
around the world that "range from representing them in the New York money market to
arranging, as it did recently, a Manhattan wedding and even provoding the best man,
for an out-of-town banker." 2
From the bank's 60-story Wall Street skyscraper, David oversees his institution's do-
mestic and international banking operations. Chase has 147 domestic (New York Metro-
politan area) and 42 foreign branch banks (including 28 in Panama, Puerto Rico, the
Virgin Islands, Trinidad and Guyana). 3
The bank has expanded in the United States and British-dominated Caribbean area pri-
marily through the use of simple branch banking. But it has penetrated the more diffi-
cult continental regions by acquiring "affiliates" (see list below). By this method,
Chase acquires a controlling interest in an already-established local bank. It usually
moves in on a prospective affiliate when the local bank, controlled by national interests,
is in financial difficulties. Thus Chase can acquire a controlling share of the under-
valued stock for a greatly reduced price. Rockefeller and his associates then rehabil-
itate the bank to meet their own standards and to serve their own purposes while main-
taining and taking advantage of the bank's original outlets, clients and contacts. In-16-
this way, Chase quickly acquires the banking infrastructure in the foreign country it
would otherwise take a regular U.S. branch years to obtain.
Once Chase established affiliates in several countries, it began to use them not only
for the usual local banking services but also for financing large international loans. Chase recently announced a $25 million program to finance trade in capital goods be-
tween Latin American countries (The New York Times, April 9, 1969). The program is
the first such venture organized in the private sector (in the past, the Inter-American Development Bank has provided some such loans for regional trade). Under the program,
financing for capital goods exports, such as machinery and other basic equipment, will
be through lines of credit extended by Chase and the Deutsch-Sudamerikanische Bank of
Hamburg through the six Chase-controlled Latin American affiliates:
Banco Mercantil y Agracola, Venezuela (17 branches);
Banco del Comercio, Colombia (Colombia's fourth largest private bank with 120 branches
in Colombia and Panama; Chase purchased a controlling interest in 1967);
Banco Lar Brasileiro, Brazil (34 branches; Chase acquired a majority share in 1962);
* Banco Continental, Peru (Peru's fourth largest bank, with 42 branches; Chase acquired
a controlling interest in 1964);
* Lnco Atlantida, Honduras (24 branches; Chase acquired a 51 percent interest in 1967);
Banco Argentino de Comercio, Argentina (Chase acquired a controlling interest in 1968).
LITTLE DISTINCTION BETWEEN PRIVATE AND PUBLIC
Chase officials and directors frequently migrate between the bank and various high
posts in the financial branches and agencies of the U.S. government and various in-
ternational organizations. To cite a few examples:
-- Both John J. McCloy and Eugene Black have gone to the presidency of the World Bank
from the chairmanship of Chase.
-- Charles Fiero, vice president of the Chase Manhattan Overseas Banking Corporation,
became director of the Commerce Department's Office of Foreign Direct Investments
(OFDI) in May 1968, and rejoined Chase as senior vice president in charge of cor-
porate planning the following year. The OFDI was created in 1968 to administer a
program of restrictions on overseas expansion by U.S. companies as one means of improving the balance of payments.
-- Robert W. Cavanaugh, former treasurer of the World Bank, resigned in February 1969,
after 29 years with the World Bank, to become chairman and chief executive officer of the Chase Manhattan Trust Corporation, Ltd., Nassau, a wholly owned Chase subsid-
iary.
-- John Petty, vice president of Chase and head of its world-wide projects management division, was named Deputy Assistant Secretary of the Treasury for International
Affairs in September 1966.
-- David Rockefeller himself has served on literally scores of advisory committees; a
recent example is his appointment to the President's (LBJ's) General Advisory Com- mittee on Foreign Assistance Projects which prepared a report for the incoming
Nixon administration.-17-
Another method Chase has for extending its international banking activities is through
"representatives," which in Latin America are located in Buenos Aires, Rio, Bogota,
Mexico City and Caracas. These representatives arrange loans from Chase headquarters
in New York for local clients.
In yet another foreign banking venture, Chase has set up a wholly-owned subsidiary, the Chase International Investment Corporation (CIIC) which, according to the provisions of the Edge Act, provides services to foreign clients that commercial banks cannot legally provide to clients in the United States. The CIIC has controlling interests in several Latin American finance institutions, including:
* Interamericana de Arrendamientos, S.A., Mexico;
* Corporaci6n Interamericana, S.A., Mexico;
* Desarrollo Industrial, S.A., Panama;
* PERUINVEST - Compania de Fomento e Inversiones, S.A., Peru. 4
Footnotes
1 Until 1967, David's cousin, James Stillman Rockefeller, was chairman of the board of The First National City Bank of New York, the nation's third largest commercial bank and Chase's main rival. This review will not deal with operations of the Stillman Rockefellers, who are family descendants of William Rockefeller, brother of the ori- ginal John D. Rockefeller. Neither will it deal with the Schroeder banking and trust interests. Schroeder is a powerful international banking house of German origins, which by the 1930's had become closely allied with the Rockefellers. Among Schroeder's many ventures in Latin America was its interest in four of pre-Revolutionary Cuba's largest sugar combines, including Francisco Sugar Company and Manatf Sugar Company. In the 1950's, David Rockefeller himself was a board member, and attended board meet- ings in Cuba of the Punta Alegre Sugar Company, the second largest of the U.S.-owned sugar operations in Cuba.
2 Newsweek, April 3, 1967.
3 1967 Annual Report; all figures are as of December, 1967. The bank's branches in Cuba were nationalized in the early 1960's.
4 Figures from the Chase Multinational Banking Directory, April 1968. The annual re- ports for 1967 and 1968 add that the CIIC has recently invested in a Bolivian tin mine and a Costa Rican rice plantation. In 1968, the bank purchased the Housing In- vestment Corporation, a Puerto Rican-based mortgage banking firm, and will operate it as a wholly-owned subsidiary.
NEW FRONTIERS FOR CHASE IN THE CHOCO
"Bogota, January 27....David Rockefeller declared that the financial group he heads... is interested in the idea of taking advantage of the San Juan and Atrato rivers in forming two lakes in the Choc6 Department in the northeast of the country to develop that rain forest region....In a press conference, Rockefeller stated that tomorrow, on his return flight to New York in his private jet, he will fly over the Choco to get a better idea of the conditions..."
- Translated from El Espectador, Bogota, Colombia, January 28, 1968.
For details of the Choco' development project see the October 1967 NACLA ews-
letter and the December 1967 issue of Fortune-18-
BRIEFS ON DAVID ROCKEFELLER
* Graduated from Harvard, 1936; got his Ph.D. in economics from the Rockefeller-endow-
ed University of Chicago in 1940 with a thesis on the "Theory of Unused Corporate
Resources" .... Served as an Army intelligence officer in North Africa and France
during World War II .... Became assistant manager of Chase's foreign department in
1946 while his uncle, Winthrop Aldrich, headed the bank .... Vice-president of Chase,
1952; executive vice-president, 1955; vice chairman and director, 1956; president
and chairman of the executive committee, 1960; and board chairman, 1969.
Considered for the post of Secretary of the Treasury by both Presidents Kennedy and
Nixon. Although he has never held a cabinet post, in the words of Finance magazine
(January 1969), he "...has long held the equivalent of a cabinet status in the society
of his peers."
* "When he visits a foreign country, he normally pays at least a courtesy call on the
head of state .... Such contacts are beyond the scope of most bank presidents and
they can give the Chase a formidable jump on its competition" (Newsweek, April 3, 1967).
* Quotes from some of David's speeches:
"The private capital which Latin America so badly needs will be attracted to the
area only if it is given credible guarantees against expropriation and discrim-
inatory treatment as well as credible assurance that equitable repatriation of
profits will be possible" (to the Inter-American Press Association, as quoted in
The New York Times, October 28, 1967).
On Cuba and "progress": "Citing Cuba, Guinea and Burma as examples, he argued [in
the Jacobsson Memorial Lectures to the International Monetary Fund in Rio] that
'it is in precisely those developing nations that have been most suspicious of
private foreign investment that progress has been slowest'" (quoted in The New
York Times, September 23, 1967).
"The long-term security of the United States is linked directly to the develop-
ment of backward nations into stable political entities" [to the Council on
Foreign Relations, as quoted in The New York Times, April 19, 1967).
* "Ever since he served as an 'elector for Thomas Dewey in the 1948 Presidential elec-
tion, Rockefeller [David] has carefully avoided any political activities..." (News-
week, April 3, 1967).
Source:
Newsweek,
April 3, ,1967
THE WORLD OF DAVID ROCKEFELLER
President Chase Manhattan Bank
CIVIC BUSINESS CULTURAL
Director DIrector Chairman
Morningside Heights, Inc. Rockefeller Center, Inc. Museum of Modern Art
Chairman Partner Trustee
Downtown-Lower L'Enfant Plaza $65 million John F. Kennedy ULibrary
Manhattan Association office-hotel complex
in Washington. D.C.
Director-Vice President EDUCATIONAL
Council on Foreign Relations Partner
Embarcadero Center Chairman
Chairman $125 million office-hotel Rockefeller University
International Executive complex in San Francisco
Service Corps President
Partner Board of Overseers
With brother Laurance Harvard College
PHILANTHROPIC 4.000-acre resort
development on St. Croix
Vice President
Rockefeller Brothers Fund
Partner
15500-acre sheep ranch
President in Australia
Sealantic Fund

Tags: David Rockefeller, Chase Manhattan Bank


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