A historian's quest links J.P. Morgan to slave ownership
Covington, LA May 10, 2005
Hired by J.P. Morgan Chase & Co., historian James Lide descended on this quiet hamlet last year and began digging into the 170-year-old records of Citizens Bank of Louisiana, a predecessor of the New York bank.
After 3,500 hours of research, he confirmed what his client didn't want to hear: Between 1834 and 1861, Citizens had secured loans with mortgages on land and thousands of slaves.
The leather-bound financial books also offered a remarkably detailed window into the financial dealings of plantation owners, most notably those of Bernard de Marigny, one of the richest men of the epoch, whose gambling habit catapulted at least 62 slaves into the bank's books as collateral for borrowed money.
"What he was doing was the modern-day equivalent of rolling over your credit-card debt," says Mr. Lide.
J.P. Morgan's unusual odyssey into the history of slavery began after Bank One, which it acquired last year, financed a bond issue for the city of Chicago in May 2003. The move triggered a city rule, called the Business, Corporate and Slavery Era Insurance Ordinance, that requires companies doing business with the city to disclose any ties to slavery.
Enacted two years ago, the ordinance is meant to show the impact of slavery and promote a national dialogue on reparations to descendants of slaves. It spurred another big financial firm, Lehman Brothers Holdings Inc., to establish that the company's founders bought at least one slave and may have owned others. Detroit and Los Angeles have similar laws; Philadelphia's city council approved a measure in March, and North Carolina lawmakers introduced similar legislation in April.
Some descendants of slaves have filed lawsuits against large companies that they claim profited from slavery, but their efforts have been unsuccessful so far.
J.P. Morgan's quest began in 2003, when its record-management department searched the bank's archives in order to comply with the Chicago law. When the search came up empty-handed, J.P. Morgan called Mr. Lide, a historian who had worked with the bank in the late 1990s to research its Paris bank accounts that had been looted during the German occupation in World War II. He works for History Associates Inc., which does research for corporate and other clients.
Mr. Lide began reviewing the bank's internal archives in New York but found no records of slavery ties. Knowing that the bank had predecessors based in Louisiana, he then contacted Tulane University's library, which has a large collection of official records.
There, he discovered minutes of Citizens' board meetings in which board directors discussed transactions involving slaves. He told the bank that he expected to find a slavery connection. "They told us to dig deeper," Mr. Lide says.
In November, Mr. Lide and three colleagues traveled to several Louisiana parishes to scout for records that would back up what they found in the minutes of the board. In one parish, the archives had been destroyed in a fire.
When the historians arrived in Covington, located 40 miles north of New Orleans, they stumbled on a sizable portion of Citizens' archives. The records were kept in the basement of a sparkling new government building. There, in a room that is kept at 68 degrees Fahrenheit, the researchers found hundreds of mortgage and land-sale records, some of which documented the link between J.P. Morgan's predecessor operations and slavery.
With the help of a fellow historian, he paged through musty volumes with titles such as "Conveyance Book A" and "Mortgage Book B." Filled with a small and faded brown hand-written script, the books showed detailed mortgage and property sales records of dozens of slave and landowners. The books were written in a mixture of French and English. Excited by the wealth of information and the pristine condition of the records, Mr. Lide sent a new team of historians back to Covington and nearly 40 other parishes in January. All in all, they logged more than 20,000 references to slaves on a massive spreadsheet.
As the research progressed, one name that stood out in many records was that of Mr. de Marigny, who was one of Louisiana's biggest landowners, and an important customer of Citizens. His tale helped nail down J.P. Morgan's slave ties in eerie detail.
Born in 1785 to an aristocratic French family in New Orleans, Mr. de Marigny was educated in London, and inherited his father's fortune at age 15, according to historical accounts. He returned to New Orleans around 1803 and is widely credited with introducing American friends to a European dice game that later became known as craps. Over the next two decades, he was elected and appointed to political positions in New Orleans and at the state level. He unsuccessfully ran for governor at least twice.
Soon after, Mr. de Marigny began to lose his fortune and started selling off some of his property. Historians attribute his financial problems to a slow buildup of gambling debts and lavish lifestyle. He then turned to Citizens Bank of Louisiana for help.
Citizens was glad to lend him the money he needed, though Mr. Lide notes that the actual amount of Mr. de Marigny's debt is difficult to quantify, in part, because the bank had an unusual capital structure.
Mortgage records on Mr. de Marigny's property regularly include long lists of slaves. A document filed in 1848 includes "all the slaves, cattle, utensils and improvements."
Records show that the gambling landowner sold his property in 1852 and transferred the mortgages to the new owner, including 62 slaves "employed in and attached to the plantation." Slaves were listed by name and age, and included "Bill, a mulatto, aged about 42, now a runaway slave."
Amid the hundreds of pages of Citizen's mortgage records, Mr. Lide found plenty of additional proof. One haunting example: The minutes of an Aug. 26, 1846, Citizens board meeting, show directors considered a request from Marie Rosette, a "free woman of color." who wanted to trade a slave of hers for her son, who was owned by a plantation that had been seized by the bank in a foreclosure. The board approved the swap.
After months of research, Mr. Lide and his team submitted a detailed report to the bank, listing the slaves attached to the mortgages and the foreclosures that led to the Citizens' slave ownership, as well as those of another Louisiana bank of the era, New Orleans Canal & Banking Company. All in all, the two banks linked to J.P. Morgan used more than 13,000 slaves as collateral and wound up owning about 1,250 of them when borrowers defaulted.
J.P. Morgan responded swiftly, issuing a public apology for the actions of the two banks. It also established a $5 million scholarship fund for African-American students from Louisiana.
Copyright 2005, The Wall Street Journal
From: The Wall Street Journal, May 10, 2005. Reprinted in accordance with the "fair use" provision of Title 17 U.S.C. § 107 for a non-profit educational purpose.