Bankers Trust

Bankers Trust was a historic American banking organization. The bank merged with Alex. Brown & Sons before being acquired by Deutsche Bank in 1998.

In 1903 a group of New York national banks formed trust company Bankers Trust to provide trust services to customers of state and national banks throughout the country on the premise that it would not lure commercial bank customers away. In addition to offering the usual trust and commercial banking functions, it also acted as a "bankers' bank" by holding the reserves of other banks and trust companies and loaning them money when they needed additional reserves due to unexpected withdrawals. Bankers Trust Company was incorporated on March 24, 1903, with an initial capital of $1.5 million. Despite technically having numerous stockholders, the voting power was held by three associates of J.P. Morgan. Thus, it was widely viewed as a Morgan company. J. P. Morgan himself held a controlling interest, and Edmund C. Converse, a steel manufacturer turned financier and then president of Liberty National Bank, was chosen to serve as Bankers Trust's first president.

Bankers Trust quickly grew to be the second largest U.S. trust company and a dominant Wall Street institution. During the Panic of 1907, Bankers Trust worked closely with J.P. Morgan to help avoid a general financial collapse by lending money to sound banks. In 1911 it acquired the Mercantile Company and a year later the Manhattan Trust Company. In 1914 Converse resigned to become president of Astor Trust Company, another Morgan company. He was succeeded by his son-in-law Benjamin Strong Jr.. Strong served as president for less than a year, leaving Bankers Trust to become the first governor of the Federal Reserve Bank of New York after helping to establish the Federal Reserve System. In October 1917 the company became a member of the Federal Reserve system.

In 1980, Bankers Trust exited retail banking under the direction of its CEO, Alfred Brittain III. The bank attempted to sell its credit portfolio and branches to Bank of Montreal; however, the deal was not completed due to a disagreement over BankAmercard (Visa). Bank of Montreal wanted to include BankAmercard in the terms of sale, but Bankers Trust did not want to sell the new credit card program licensed from Bank of America due to its profitable future. Eventually, Bankers Trust sold 89 branches to five banks including Republic National Bank of New York. Republic National Bank of New York expanded its branch network to 32 with the opening of a new branch in Manhattan's World Trade Center and the acquisition of a dozen Bankers Trust Company branches—ten in Manhattan, one in the Bronx, and one in Brooklyn.

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