Commentary: Confronting slavery's legacy
By Al Swanson
UPI Urban Affairs Correspondent
Chicago, IL, Jan. 21 (UPI) -- It took nearly a year for financial powerhouse JP Morgan Chase & Co. to track down 19th-century records showing two predecessor banks in Louisiana owned slaves who were used as collateral for loans.
JP Morgan Chase, which merged with Bank One last July, apologized Thursday in a letter to 120,000 employees written by the company's top executives that acknowledged ties to slavery before the U.S. Civil War, and the bank announced a $5 million college scholarship fund for Louisiana students.
"That's a chapter in our history that's not very pleasant," Bill Daley, Midwest chairman of JP Morgan Chase and the brother of Chicago Mayor Richard M. Daley, told reporters. "If you see those documents, you can't help but be moved as to a period that none of us were proud of and a war was fought over. We can't change the past. We can only affect and try to change the future."
Disclosure of the bank's historical ties to slavery came 10 months after Alderman Dorothy Tillman, who marched with the Rev. Martin Luther King Jr. during the civil rights movement, accused JP Morgan Chase of lying when it denied having any direct connection with slavery.
Tillman convened historic City Council hearings in 2002 that led to Chicago passing a resolution calling for congressional hearings on reparations for descendants of African-American slaves.
She charged JP Morgan Chase with perjury after it signed the city's disclosure affidavit swearing the company had no ties to the slave era and threatened to pull $400 million in city funds and bond contracts.
A 2002 ordinance that passed 46-1 requires all firms seeking city business to sign an affidavit, and if a company lies about investing in or profiting from slavery it is barred from sharing in contracts. Detroit and Los Angeles passed similar ordinances.
The Chicago ordinance required JP Morgan Chase to search its internal records. The bank holding company initially said it found nothing. Tillman introduced a resolution asking the council to subpoena William B. Harrison Jr., chairman and chief executive officer of JP Morgan Chase, and Eric Griggs, the City of Chicago's chief procurement officer.
Tillman said she was aware of historical research showing receipts for slaves purchased by George Peabody Co., a predecessor to JP Morgan Chase & Co., which was a major financier to banks in the United States and London.
Tillman contends JP Morgan Chase would not exist without George Peabody, who financed and profited from the slave trade in the 1800s.
Slavery was a legal institution in the United States for 245 years until it was abolished by the 13th Amendment in 1865. Groups seeking reparations say many of today's social problems that stigmatize African-Americans 140 years after emancipation are the direct result of a kind of post-slavery trauma syndrome compounded by 100 years of legal Jim Crow segregation that followed the Civil War and continued racism.
The U.S. Supreme Court struck down the "separate but equal" division of the races in the 1954 Brown vs. Board of Education decision. Separate was separate but never equal for generations of black Americans in education, housing, healthcare and economic opportunity.
"I think that people forget just how central slavery was to everything in American life in the 19th century, from economics to politics to culture," Lonnie Bunch, president of the Chicago Historical Society, told the Chicago Sun-Times. "In 1860, there was more money invested in slavery than in business, railroads and banking combined. That gives you a sense of how big a shadow slavery casts."
In 3,500 hours of searching records of 300 predecessor institutions, History Associates, a Maryland research firm hired by JP Morgan Chase, found two Louisiana banks founded in the 1830s accepted 13,000 slaves as collateral on loans from 1831 until 1865 and took ownership of 1,250 slaves on defaulted loans to plantation owners in East Baton Rouge, West Baton Rouge and Ascension parishes.
The banks merged in 1924 to form Canal Commercial Trust & Savings Bank. The filing listed some Louisiana slaveholders by name along with names of many of their slaves.
"Slavery was a brutal and unjust institution," said the letter signed by JP Morgan Chase's Harrison and Chief Operating Officer Jamie Dimon. "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. The slavery era was a tragic time in U.S. history and our company's history."
The Canal Bank failed in 1933 during the Great Depression, and its deposits were placed in The National Bank of Commerce of New Orleans, which later became the First National Bank of Commerce. Bank One acquired First National Bank of Commerce in 1998.
The "Smart Start Louisiana" scholarship program for in-state African-American students is modeled after JP Morgan Chase's "Smart Start" minority scholarship program in New York, which awards undergraduate scholarships based on need and merit.
Even though JP Morgan Chase said nothing about the role of Peabody Co. during the slave era, its admission predecessor institutions owned slaves is unprecedented in modern U.S. business history.
JP Morgan Chase was one of 18 companies named in a reparations lawsuit filed by descendants of African-American slaves. A federal judge tossed the suit out in January 2004.
Why open such old wounds? Hasn't too much time passed for an American version of the truth-and-reconciliation hearings that followed the end of apartheid in South Africa?
Such disclosures could one day involve more than ethical questions.
If African-Americans were ever to receive reparations from the U.S. government, individuals would probably be required to prove their ancestors were slaves in the United States, and without disclosure of historical ties to the slave trade it's difficult for many to begin a genealogy.
JP Morgan Chase's letter said while everyone knows slavery existed in the United States "it is quite different to see how our history and the institution of slavery were intertwined. Slavery was tragically ingrained in American society, but that is no excuse."