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Twentieth-Century Business Archives

Chemical New York Corp. - Lehman Brothers Collection

Chemical New York Corp.

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The Chemical New York Corporation began as the New York Chemical Manufacturing Company. The company was established in 1823 by Baldhead P. Melick, Mark Spenser, and Geradus Post. These founders originally wanted to form a bank; however, due to laws governing banks at that time, it was easier to start a company for other purposes and then add banking activities to the company's chartered activities. The founders followed precisely that formula and in 1824 established Chemical Bank as a division of New York Chemical Manufacturing Company.

The bank thrived through the following decades. In 1884, when New York Chemical Manufacturing Company's charter expired, the chemical company was liquidated and the company was reincorporated as a bank only. In 1853 the bank became a founding member of the New York Clearing House, an association of banks formed to help members clear banking transactions. During the recession of 1857 many new banks experienced a great deal of financial difficulty. Despite the condition of the economy, Chemical Bank redeemed bank notes in specie after other banks had started issuing paper loan certificates. Chemical Bank weathered the crisis and remained stable through the Civil War.

In 1865 the bank acquired a national charter as the Chemical National Bank of New York and began issuing government-backed national bank notes, the predecessor of paper money. The bank also became a depository of federal funds and the required reserves of other national banks. Chemical Bank's reputation for stability was enhanced by the higher liquidity and solvency requirements set by the federal government. Through the end of the nineteenth century the bank was a major correspondence banker and one of the largest and strongest banks in North America.

At the turn of the century the bank's leadership changed hands. The bank began to falter under the direction of Joseph B. Martindale. By 1917 it was no longer among the top 100 banks in the country. The bank rebounded after Martindale's death, and by 1919 its stock had increased to almost $200 a share. In 1923 Chemical Bank established its first branch bank.

The company was reincorporated as a state bank in 1929 under the name Chemical Bank & Trust Company. That same year, the company merged with the United States Mortgage & Trust Company. Also in 1929, Chemical established two affiliates, Chemical National Company, Inc., to buy, sell, and underwrite securities, and Chemical National Association, Inc., to act as a holding company. The two affiliates were merged into the bank during the Depression.

During the post-World War II years the company participated in a series of mergers, which ultimately increased the bank's assets from $1.35 billion in 1946 to $15 billion by 1972. In 1947 the company merged with Continental Bank and Trust Company. In 1954 Chemical merged with the Corn Exchange Bank Trust Company to form Chemical Corn Exchange Bank. This merger brought Chemical ninety-eight additional branches throughout New York City. In 1959 the company merged with New York Trust Company, which had a large trust and wholesale-banking business. In 1968 the company formed a bank-holding company, Chemical New York Corporation.

Through the 1960s and 1970s, the company continued to expand, and its international operations grew significantly. By 1977 Chemical had added branches and/or offices in the Bahamas, Frankfurt, Brussels, Zurich, Paris, Tokyo, Singapore, Milan, London, and Taiwan. Chemical also continued to acquire other companies during this time. It also formed a real estate financing subsidiary, Chemical Realty Company. One of the company's most popular innovations at that time was "ChemLink," a computerized system that enabled corporations to transfer funds anywhere and to have instant access to their funds worldwide.

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