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Manufacturers Hanover Corporation

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"Manufacturers National Bank" redirects here. Not to be confused with Manufacturer's National Bank in Maine.
Manufacturers Hanover Corporation
Manufacturers Hanover Trust Company
Company typePublic
NYSE: MHC
IndustryBank holding company
Founded
  • 1905; 119 years ago (1905) (as Citizens)
  • 1987; 37 years ago (1987) (as Manufacturers Hanover)
DefunctJune 22, 1992; 32 years ago (1992-06-22)
FateAcquired by Chemical Bank and assumed the name Chemical after the 1991 merger.
SuccessorChemical Bank
HeadquartersNew York City
Key people
ProductsFinancial services
A bronze doorway in the New Yorker Hotel in midtown Manhattan that formerly led to a branch of the Manufacturers Trust Company

Manufacturers Hanover Corporation was an American bank holding company that was formed as parent of Manufacturers Hanover Trust Company (MHT or, informally, Manny Hanny), a large New York City bank formed through a merger in 1961. After 1969, Manufacturers Hanover Trust became a subsidiary of Manufacturers Hanover Corporation. Charles J. Stewart was the company's first president and chairman.[1]

The corporation acquired the former Union Carbide Corporation headquarters at 270 Park Avenue. After it merged into Chemical Banking Corporation for US$1.9 billion in 1991, the successor corporations down to JPMorgan Chase continued to locate their headquarters in that building.

Earlier history of Manufacturers Trust Company

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Manufacturers Hanover traces its origins to the 1905 founding of Citizens Trust Company of Brooklyn. Through a series of acquisitions, the bank would grow into one of New York's largest banks within its first twenty years. Citizens Trust's first major acquisitions came with its mergers with the Broadway Bank of Brooklyn in 1912 and then two years later in 1914 with the Manufacturers National Bank of Brooklyn. In 1915, the bank adopted the older "Manufacturers" name, changing its name to the Manufacturers Trust Company. The "Manufacturers" name had been in use since 1858, when the Mechanics' Bank of Williamsburgh (founded 1853) was renamed the Manufacturers National Bank. Coincidentally, Manufacturers Trust Company had also been the name of a Brooklyn-based bank, founded in 1896 and acquired in 1902 by the Title Guarantee and Trust Company, another Brooklyn bank.[2]

Manufacturers Trust acquired a Manhattan presence with its acquisition of the West Side Bank of New York in 1918. Later Manufacturers Trust acquired the Ridgewood National Bank of Queens (1921), the North Side Bank of Brooklyn (1922), the Industrial Bank of New York (1922), the Columbia Bank of New York (1923), and the Yorkville Bank of New York (1925), to become the 29th largest bank in the United States by 1925.[3]

In 1932, Manufacturers Trust created the National Hotel Management Company (NMH) to centrally oversee the hotels the bank held mortgages on. They appointed hotel pioneer Ralph Hitz as President of the NMH. This was because, even at the height of the Great Depression, Hitz had been able to turn a profit at the New Yorker Hotel, which the Manufacturers Trust also held the mortgage for. By the time of Hitz's death in 1940, the NHM had become the largest hotel organization in the United States and managed the New Yorker, the Lexington and the Belmont Plaza hotels (New York); the Congress Hotel (Chicago); the Netherland Plaza (Cincinnati); Adolphus Hotel (Dallas); the Van Cleve (Dayton); the Book-Cadillac (Detroit); the Nicollet Hotel (Minneapolis); The New York Municipal Airport Restaurants (New York) and the Eastern Slope Inn (North Conway, New Hampshire).[4]

The National Hotel Management Company was dissolved within a month of Hitz's death in 1940.[5]

Manufacturers Hanover Trust

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The 1960–1986 Logo

Origin in merger

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On January 17, 1961, it was announced that Manufacturers Trust Company had agreed to merge with Hanover Bank, creating the Manufacturers Hanover Trust Company.[6] The planned entity would become the fourth-largest bank in the United States and the third-largest in New York City.[7] Charles J. Stewart was slated to become the chairman of the merged entity.[7]

The merger was approved by the New York State Banking Department in June 1961,[8] and then by the Federal Reserve Board in September 1961.[7] The merger closed on September 8, 1961, a couple of days after the Fed assent, in an effort to forestall any possible action from the United States Department of Justice Antitrust Division.[8] However, minutes after the merger papers were filed, the Justice Department filed suit against the banks to block it from proceeding.[9]

Five years of court cases ensued, complicated by the U.S. Supreme Court case United States v. Philadelphia National Bank (1963) which interpreted the Bank Merger Act of 1960 as to allow forbiddance of mergers such as the Manufacturers Hanover Trust one.[10] One U.S. court refused to block the merger while another U.S. court ruled that a "demerger" must take place.[10] During this time, Gabriel Hauge, vice chairman and then president of Manufacturers Hanover, led the company's efforts to keep the merger in place.[11] In 1966, a new law was passed by Congress;[12] it clarified the Bank Merger Act and cleared the way for the mergers in question,[10] and Manufacturers Hanover reached an agreement with the Department of Justice.[11]

Years of success

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Through its existence, the bank was often referred to as "Manny Hanny".[13][14][15]

In 1969, a rearrangement was done such that the holding company Manufacturers Hanover Corporation was created, and the bank made a subsidiary of that.[15] At the same time, shares in Manufacturers Hanover Corporation were listed on the New York Stock Exchange[15] (historically, most banks resisted listing and were sold instead over-the-counter.)[16] Manufacturers Hanover remained the nation's fourth-largest bank.[17]

Hauge was named chairman in 1971,[11] succeeding R. E. McNeill Jr. who retired.[12] But the effective leadership of the corporation went to its president, John F. McGillicuddy, who had risen quickly within the ranks of the bank.[12][18] In 1979, Huge retired, and McGillicuddy held all three titles of president, chairman, and chief executive officer.[18]

MHT presentation folder and interoffice envelope, early-mid-1980s

As a clearing house (finance), Manufacturers Hanover was a core member of the Clearing House Interbank Payments System (CHIPS) that began operation in 1970.[19]

It was considered among the top American banks, alongside Citicorp and Chase Manhattan Bank, and had a reputation for stability.[20] Among commercial banks in New York City, it was the only one still willing to distribute food stamps and to cash welfare checks.[18] The bank became the main source of financing for check cashing stores. It had a sense of internal loyalty, wherein layoffs were avoided and lifetime employment was fairly common.[20] It also had a sense of loyalty towards its customers, with relationships formed over long associations and such activities as playing on golf courses.[18] One successful instance of such a relationship was its successful rescue plan for the troubled Chrysler Corporation.[18]

As of the early 1970s, MHT was a New York-based bank with a few offices overseas, but then over the next decade it grew its outside-of-New-York presence substantially.[13] By 1982, it had more than 700 offices across 32 states in the country, and another 102 branches across 40 nations around the world.[13] Three operations were headquartered in Dallas, Texas: Manufacturers Hanover Commercial Corp., which did commercial financing; Manufacturers Hanover Leasing Corp., which was the largest bank-associated leasing outfit in the world, with 45 global branches; and MH/Edie Investment Counsel Inc., which offered investment services.[13] Among banks, Manufacturers Hanover Corporation also contained the second-largest mortgage banking house and the fourth-largest mortgage banking operation in the world, and its consumer finance network was third largest among banks.[13]

MHT office stapler and stickers

MHT was one of the banks that created the CIRRUS interbank network in the early 1980s for providing cash and other personal banking transactions nationwide.[21] For its large internal data processing systems at the time, such as the Wholesale Banking System, a common environment was IBM mainframes running CICS for online applications with IMS as the database and IBM DB/DC for the data dictionary.[22]

In 1983, Manufacturers Hanover agreed to acquire the CIT Financial Corporation for some $1.5 billion, an amount that no bank holding company had ever spent on a single acquisition before.[23] When the deal closed in 1984 it created the biggest factoring unit across the globe.[24]

Up through the early 1980s, Manufacturers Hanover remained the fourth largest bank in the nation.[11][13][23]

Advertising

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The bank reached its commercial heyday in the mid-1970s, when it ran a series of commercials that used the tagline, "It's banking the way you want it to be." Twilight Zone writer Rod Serling and comedian Paul Lynde served as celebrity spokesmen. At the same time, a Manufacturers Hanover billboard advertising "Super Checking" was a prominent feature of the newly renovated Yankee Stadium. The billboard could be seen as Chris Chambliss hit the home run that won the 1976 American League Championship Series for the New York Yankees over the Kansas City Royals. Also during that period, Manufacturers Hanover heavily promoted its "Any Car" Loan using an "Any Car", known as the "FordChevAmChrysWagon", made up of parts from 40 different cars.

Sponsorships

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The bank was involved in sponsoring a number of different sports events,[25] many of which were arranged by bank executive Charles Henry McCabe, Jr.[26] These included the Manufacturers Hanover Westchester Classic professional golf tournament held during the 1980s at the Westchester Country Club north of New York City,[23] a stop on the PGA Tour that during its time with MHT as title sponsor featured winners such as Seve Ballesteros and Curtis Strange. Other Manufacturers Hanover sponsorships were in association with the New York Mets baseball team and the US Open Tennis Championships.[26]

The bank was a founding sponsor of the New York City Marathon,[27] and over the years held exclusive events there for their most moneyed clients.[28] Moreover, it was the creator, in 1977, of the Manufacturers Hanover Corporate Challenge running event,[27] which quickly grew in size and number of instances and became highly effective in promoting name visibility.[25] By 1988, there were eighteen Corporate Challenge events per year and some five thousand companies entering teams in them, with Manufacturers Hanover soliciting business from the best prospects among them.[28] The challenge has existed to this day under successor names.[27]

Troubles

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However, the stock price for MHT began to fall precipitously during 1984, in large part because the bank was exposed on nearly $7 billion of loans to Central and South America, in particular to Mexico, Venezuela, Brazil, and especially Argentina.[18] In addition, MHT followed a "lending banking" model where instead of investment banking it made traditional short-term loans to corporate customers, but those customers were instead increasingly borrowing via the commercial paper market.[18][20]

Beginning in 1985, McGillicuddy staged three years' worth of internal cost reductions and operational reorganizations, in an effort to stave off the need to be acquired or to receive a federal bailout.[20] There were a number of layoffs.[20]

By 1988, Manufacturers Hanover had fallen to being the nation's sixth-largest bank,[28] or sometimes seventh-largest.[20]

In 1987, the bank bought some of the branches of Dollar Dry Dock Savings Bank. In 1992, it bought the New York City branches of the failed Goldome.

Acquisition by Chemical Bank

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On July 15, 1991, it was announced that the Manufacturers Hanover Corporation would engage in a friendly merger with the Chemical Bank Corporation, with the resulting company to be known by the Chemical name.[29] Chemical was also suffering from bad loans,[30] many of them in real estate.[29] The theory behind the merger was that combination of the two companies would be economically more robust and a stronger competitor.[30] Substantial layoffs and sales of assets were planned to take place among the combined companies.[31] McGillicuddy would serve as chief executive of the merged Chemical until his planned retirement.[30] The Manufacturers name would gradually disappear.[30]

At the time it was the largest bank merger ever to take place in the United States.[29] The resulting bank would become the second-largest in the country, behind only Citicorp.[30] News of the merger was the lead story in the New York Times the next day.[29] It became part of a nationwide wave of mergers and consolidation within the banking industry.[32]

The merger was closed on December 31, 1991.[32]

The 31 far upstate branches stay with Chemical but instead were sold to Fleet Bank.[33]

As the New York Times wrote on June 22 of 1992, as electronic transfer systems were phased over: "Quietly, ... the 180-year-old Manufacturers Hanover Trust Company ceased to exist as an independent bank."[34]

However, in many respects parts of MHT remained dominant within Chemical, such as in information systems and at the executive level.[35]

In years following the merger with Chemical, in 1996 the new Chemical bought Chase Manhattan Bank and four years later would merge with J.P. Morgan & Co. to form JPMorgan Chase.

Timeline of mergers and name changes

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Former Manufacturers Hanover corporate offices at 270 Park Avenue, later the headquarters of JPMorgan Chase and now demolished

The timeline below, unless otherwise noted, indicates the purchase of the named entity by Manufacturers Hanover Corporation or its immediate controlling predecessors. Exceptions include the first and last entries (original charter and dissolution of the company by buyout, respectively), and several name changes.[36]

Earlier history of Central Hanover Bank & Trust Company

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The final name of the company was Manufacturers Hanover Corporation, and the primary banking subsidiary was Manufacturers Hanover Trust. This name was a result of the merger of predecessor Manufacturers Trust with Central Hanover Bank & Trust.

Central Hanover was also a large, well-known bank before the merger. It was formed in 1929 from the merger of two other banking giants of the time, Central Union Trust Company and Hanover National Bank.[38]

Hanover National built one of the early skyscrapers of New York, the Hanover National Building at 11 Nassau Street. It had twenty-two floors and was 385 feet high.[39]

The corporate history of predecessor Hanover Bank is as follows:[36]

  • 1851 – Established Hanover Bank, NYS charter
  • 1865 – Name change to Hanover National Bank of the City of New York (Federal)
  • 1929 – Name change to Hanover Bank of the City of New York (NYS)
  • 1929 – Bought by Central Union Trust Company of New York (see below)

The corporate history of predecessor Central Union Trust Company is as follows:[36][40]

  • 1873 – Established Central Trust Company of New York
  • 1901 – Continental National Bank of New York (est. 1853)[41]
  • 1912 – Gallatin National Bank of the City of New York (est. 1829)[42]
  • 1918 – Union Trust Company of New York; changed name to Central Union Trust Company of New York[43][44]
  • 1927 – Greenwich National Bank of the City of New York (est. 1830)[45][46]
  • 1929 – Hanover Bank of the City of New York; changed name to Central Hanover Bank and Trust Company[47][48]
  • 1951 – Changed name to Hanover Bank (no merger)
  • 1961 – Bought by Manufacturers Trust Company[49]

See also

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References

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Notes

  1. ^ "Charles Stewart Dies; An Ex-Bank Executive (obituary)". The New York Times. July 17, 1987. Retrieved 20 June 2008.
  2. ^ "Trust Concerns Unite". The New York Times. 1 November 1902. ProQuest 96236735.
  3. ^ "Another merger of New York Banks". The New York Times. 20 February 1925. ProQuest 103575591.
  4. ^ Pearson Education; Hospitality Leaders http://wps.prenhall.com/chet_kotler_marketing_5/114/29189/7472573.cw/content/index.html
  5. ^ The Baltimore Sun (Baltimore, Maryland) · Wed, Jan 31, 1940 · Page 5
  6. ^ "New York Banks Reveal Merger Plan". Wisconsin State Journal. Madison, Wisconsin. United Press International. January 18, 1961. p. 4 (Section 3) – via NewspaperArchive.
  7. ^ a b c "Merger of Two Big N. Y. Banks Given Clearance". The Terre Haute Star. United Press International. September 8, 1961. p. 11 – via NewspaperArchive.
  8. ^ a b Krauss, Albert L. (September 8, 1961). "Two Banks Are Merging Quickly". The New York Times. pp. 44, 46.
  9. ^ Krauss, Albert L. (September 9, 1961). "Trust Suite Filed As 2 Banks Here Report A Merger". The New York Times. pp. 1, 30.
  10. ^ a b c Gould, Leslie (February 25, 1966). "Bank Merger Confusion Ends". The San Antonio Light. p. 19 – via NewspaperArchive.
  11. ^ a b c d "Gabriel Hauge, Banker, dies; was an Adviser to Presidents". The New York Times. July 25, 1981.
  12. ^ a b c Heinemann, H. Erich (July 5, 1970). "Personality: 'New Kid' to Lead Manufacturers Hanover". The New York Times. p. 75.
  13. ^ a b c d e f Geczi, Michael (November 26, 1982). "Eastern bank eyes Sun Belt". The Odessa American. Dallas Morning News. p. 6B – via NewspaperArchive.
  14. ^ Waite, Thomas L. (August 28, 1988). "POSTINGS: Manny Hanny's Move; 5th to Madison". The New York Times.
  15. ^ a b c Hylton, Richard D. (July 16, 1991). "'Manny Hanny': A Name for History Books". The New York Times. p. D6.
  16. ^ "City Banks Sun Listing Of Stock", The New York Times, September 29, 1964, Page 66
  17. ^ "Beers Elected As a Director". Monroe Evening Times. December 20, 1969. p. 8 – via NewspaperArchive.
  18. ^ a b c d e f g Bennett, Robert A. (October 14, 1984). "The Blues At Manufacturer's Hanover". The New York Times. pp. 1, 24 (Section 3).
  19. ^ Lee, John F. (Winter 1976). "Clearing House Interbank Payments System". ACM SIGCAS Computers and Society. 7 (4): 6–9.
  20. ^ a b c d e f Day, Kathleen (June 4, 1988). "Manny Hanny Dusts Off After A Nasty Fall". The Washington Post.
  21. ^ Gifford, David; Spector, Alfred (August 1985). "The CIRRUS banking network". Communications of the ACM. 28 (8): , 798–807.
  22. ^ Herman, Marian (Fall 1983). "A Database Design Methodology For An Integrated Database Environment". ACM SIGMIS Database. Vol. 15, no. 1. pp. 20–27.
  23. ^ a b c Bennett, Robert A. (October 2, 1983). "Financier: John F. McGillicuddy: At Manufacturers Hanover, the Biggest". The New York Times. pp. 6, 7 (Business).
  24. ^ ": A century of CIT, from St Louis to New York". Reuters. November 2, 2009.
  25. ^ a b "Sports Marketing Scores With More Companies". Chicago Tribune. September 9, 1986.
  26. ^ a b "Charlie McCabe". Bill Shannon Biographical Dictionary of New York Sports. New-York Historical Society. Retrieved September 27, 2024.
  27. ^ a b c "Our History". J.P. Morgan Corporate Challenge. Retrieved September 26, 2024.
  28. ^ a b c Bradsher, Keith (July 25, 1988). "Sponsors' Rationale: Advertising, Community". Los Angeles Times.
  29. ^ a b c d Quint, Michael (July 16, 1991). "Big Bank Merger To Join Chemical, Manufacturer". The New York Times. pp. A1, D6.
  30. ^ a b c d e "Chemical, Manufacturers agree to merge". The Orange County Register. Associated Press. July 15, 1991. pp. C1, C2 – via NewspaperArchive.
  31. ^ Bartlett, Sarah (July 16, 1991). "For New York, a Loss of Jobs and Revenues". The New York Times. pp. A1, D6.
  32. ^ a b "Mega-merger creates 11-state NationsBank". Kenosha News. The Washington Post. January 2, 1992. p. 23 – via NewspaperArchive.
  33. ^ "Chemical To Sell 31 Manufacturers Branches To Fleet". The New York Times. August 28, 1992. p. D3.
  34. ^ Quint, Michael (June 22, 1992). "Manufacturers Hanover Fades Out". New York Times.
  35. ^ Radigan, Joseph. "By any other name." United States Banker, June 1993, 50. Gale General OneFile (accessed September 22, 2024). https://link-gale-com.wikipedialibrary.idm.oclc.org/apps/doc/A14379753/ITOF?u=wikipedia&sid=bookmark-ITOF&xid=79d2456a.
  36. ^ a b c "New York Bank History – National Bank History". www.scripophily.com. Retrieved 2018-05-02.
  37. ^ Quint, Michael (November 29, 1990). "Hanover Deal For Deposits Of Goldome". New York Times.
  38. ^ "$722,000,000 MERGER OF BANKS EXPECTED; Central Union Trust Co. and Hanover National Reported in Negotiations. DAVISON DENIES ANY DEAL But Says He is No Prophet-- Wall St. Hears Terms Are 3 for 1 Exchange of Stock. SHARES SOARED RECENTLY Securities of Both Old Powers in Street Have Appreciated Greatly Since Stock Dividends. Remarkable Rise in Hanover Stock. Central Long a Wall Street Power". The New York Times. 1929-03-16. ISSN 0362-4331. Retrieved 2018-05-01.
  39. ^ "Hanover National Bank Building". The Skyscraper Center. Retrieved 2018-05-01.
  40. ^ "New York Bank History – National Bank History". www.scripophily.com. Retrieved 2018-05-02.
  41. ^ "NATIONAL BANKS MERGED.HANOVER ABSORBS ITS NEIGHBOR, THE CONTINENTAL". The Standard Union. 4 April 1901. p. 12. Retrieved 1 November 2021.
  42. ^ "HANOVER ABSORBS GALLATIN NATIONAL; Both Banks Grew with Financial District and Hanover Became One of Country's Largest". The New York Times. 26 April 1912. Retrieved 29 October 2021.
  43. ^ "APPROVE MERGER OF TRUST COMPANIES; Trustees of Central and Union Give Sanction to Plan for Consolidation. STOCKHOLDERS MUST ACT Combined Deposits, Around $250,000,000, Exceeded by Only TwoCompanies the Country". The New York Times. 2 March 1918. Retrieved 1 November 2021.
  44. ^ "BANK MERGER APPROVED.; Stockholders of Central and Union Trust Companies Take Action". The New York Times. 12 April 1918. Retrieved 1 November 2021.
  45. ^ "GREENWICH BANK CHANGES.; Becomes a National Bank Today in Step Toward Hanover Merger". The New York Times. 24 March 1927. Retrieved 1 November 2021.
  46. ^ "STOCKHOLDERS FOR MERGER; Favor Absorption of Greenwich Bank by Hanover National". The New York Times. 26 April 1927. Retrieved 1 November 2021.
  47. ^ "$722,000,000 MERGER OF BANKS EXPECTED; Central Union Trust Co. and Hanover National Reported in Negotiations. DAVISON DENIES ANY DEAL But Says He is No Prophet-- Wall St. Hears Terms Are 3 for 1 Exchange of Stock. SHARES SOARED RECENTLY Securities of Both Old Powers in Street Have Appreciated Greatly Since Stock Dividends. Remarkable Rise in Hanover Stock. Central Long a Wall Street Power". The New York Times. 16 March 1929. Retrieved 1 November 2021.
  48. ^ "HANOVER BANK JOINS WITH CENTRAL UNION; Stockholders of Both Vote to Unite in New Company With $100,000,000 Funds. CORN EXCHANGE RENAMED Meeting Approves Change Into Trust Company--Parkbanc Corporation Endorsed". The New York Times. 15 May 1929. Retrieved 1 November 2021.
  49. ^ Mooney, Richard E. (7 September 1961). "MERGER CLEARED FOR 2 BIG BANKS; Reserve Board Approves Hanover Consolidation With Manufacturers COURT ACTION POSSIBLE Resulting Institution Would Be the Fourth Largest in U.S. and World MERGER CLEARED FOR 2-BIG BANKS". The New York Times. Retrieved 1 November 2021.

Bibliography


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