Chase Alumni Association

A Moment in Bank History

Eighty-five Years of Chase in Panama

¡¡”Nice people, those…”!! 

The dirt and the dynamite had finally settled for good, and the Panama Canal had opened for business in August 1914. On March 1, 1915, under the name “Commercial National Bank” – out of Washington, D.C., duly licensed by the U.S. Isthmian Canal Commission, domiciled in the terminal port of Cristobal – our predecessor opened its doors, providing financial services to ships passing through the Canal and so often to the civilian and and military communities of the nascent Panama Canal Zone. The name changed to “Foreign Banking Corporation” in 1917, and finally, in 1925, to “Chase National Bank”.

Then came the merger with the Bank of the Manhattan Company, and the name changed again, this time to The Chase Manhattan Bank (CMB), a name fondly remembered in Panama, almost 25 years after the sale of our franchise.

With full service branches, both in the Canal Zone (U.S. jurisdiction; Isthmian Branches) and in Panama (Local jurisdiction; Panama Branches) CMB was in the unique position of being, jointly with City Bank, the U.S. Treasury’s authorized supplier of U.S. currency, under the 1904 Monetary Agreement which made the USD Panama’s legal tender. Under that authority, we maintained two U.S. Treasury accounts at our Balboa Branch in the Canal Zone: a) a regular current account from which were paid all employees of the Federal Government, including the Canal, armed forces and civilians, and b) a Custody Account in which the Treasury kept an amount of cash determined by them at all times, which fed their current account and supplied fit currency to Panama’s economy.

During WWII, the Korean conflict and the Vietnam War, these amounts approached the limits our branch vault insurance allowed, because this cash also included the unfit currency that we and City collected from the Panama banking system to ship back to the Federal Reserve Bank of Atlanta for destruction. This lasted until 1979, when this role passed to Panama’s National Bank under the 1977 Canal Treaty.

CMB was also the main bank supplier of credit to ship lines or their agents for the payment of Panama Canal tolls (which the Canal required prior to transit) and other services and supplies for vessels transiting or berthing in Panama’s ports, such as repairs, fresh water, vegetables and bunker. And when CMB acquired Bank of Egypt and it became Chase Egypt, Chase Panama sent two experienced officers in 1975, one from Credit  and the other from Operations, to organize the Canal Tollls LOB for Chase Egypt in the Suez Canal.

But this was not CMB’s only distinctive historic role in Panama. On more than one occasion, Chase National and later CMB were called upon to act as custodian of the ballots in the national general elections. But what made CMB an outstanding player in the financial arena not only of  Panama, but also in the Western Hemisphere was the leading edge role it played in several áreas.

Under the leadership of James Edward Healy Jr., Country Manager from 1942 to 1958, CMB created our  outstanding farm credit program, opening our David Branch in 1951 – the first rural branch of any private foreign bank anywhere south of the Rio Grande. That was followed in 1961 by a second rural Branch in Chitre. The farm credit program was exported to our branches in the Dominican Republic and to our affiliated banks: Banco Mercantil y Agricola in Venezuela, Banco Lar Brasileiro, Banco Atlantida in Honduras and Banco del Comercio in Colombia, whose agricultural technicians trained for monhs in Chitre Branch. The program was copied by City, BofA, and Panama’s National Bank and Agricultural Development Bank. (Photo shows Barrelier with a customer during a farm survey in 1964.)

This was not CMB’s only first by any means. Led by forward-looking Country Managers, CMB also became first in long-term retail home lending. We were the first to grant 15-year residential home mortgages in Panama, as well as home equity loans: Witness the suburban development named Chase Heights as well as a rural home development named Chase Fountains, both in honor of CMB’s financial support at the time. The slogan “You have a friend at Chase…” became a reality in Panama. Add to that an exoression by a customer, which became a very strong publicity spot for CMB…¡¡”Nice people, those…”!! 

After CMB’s sale, what former customers remember about Chase is the sense of deep and complete trust they felt in Chase’s faithful management of their hard earned funds and the personal and business information they confided to the Bank.