BULL STREET - The art of the Con

Bank Theft From The Inside Out

Albert Henry Wiggin was born in Medfield, Massachusetts, the son of an obscure Unitarian minister. Albert skipped the normal process of getting a solid education and in 1885 at the age of 17 became a bank clerk. Albert was a quick study and absorbed everything about the industry and his job that he could get his hands on. He was well like and did his job in a professional manner so at the age of 36 he was appointed vice president at Chase Bank making him the youngest man to ever attain that position in the Bank’s history. Thirteen years later he became Chairman of Chase and once ensconced in that position he started buying out his competitors, one right after another. By the time 1929 rolled around, Wiggin had achieved substantial status in the banking world as one of its most brilliant senior executives. He had changed Chase from a sleepy local banking institution into a world class global financial conglomerate.

However, unbeknownst to his cohorts, Wiggin had another agenda. While he was being paid almost $300,000 a year to run the bank, which was a substantial amount of money for the times, he felt that he was being shortchanged. Wiggins developed a plan whereby if the bank’s directors were not going to adequately compensate him for the wonderful work he was doing on the bank’s behalf he would find a way to do it himself. Wiggin began the process of taking care of himself by forming numerous dummy corporations both in the United States and overseas. He used nominee names as the officers of these companies and then approved massive loans from Chase to fund them. Although hidden from sight, he and other members of his immediate family owned literally all of the stock in these companies and no one else was even aware of their existence.

Along came the crash and Wiggin saw a glorious opportunity of making a killing. He better than anyone knew the perilous condition of the stock market, the economy and most import of all, the condition of Chase Bank. While not only continuing to issue glorious reports on the future of the bank and while publicly announcing that he was joining numerous bankers and brokers who were uniting in trying to stem the blood bath on Wall Street, he secretly started selling stock in his bank short. In other words, he was making an astronomical bet that he stock was overpriced, that the market would continue in free fall and that the economy was not going to recovery, while telling his friends, associates, and shareholders the opposite.

Now, in order to make his prophecy self-fulfilling, he began to use his credibility not only as the Chairman of Chase but his position as a director of 59 other companies to begin to bemoan the condition of the economy and that of the bank. Not only did Wiggin clean up but he screwed everyone in the process. He was even able to avoid the payment of taxes on his ill-gotten profits by taking his gains offshore and then nefariously retuning them through illegal channels. The full extent of Wiggin’s double dealing did not totally emerge until the United States Senate began a full scale investigation into the collapse of 1929 and what the banks in this country had to do with it.

For the most part, Wiggin was able to keep his ill gotten gains but lost his Chase Pension when the enormity of his double dealing was disclosed. Wiggin showed no particular remorse about what he had done saying that “I think it is highly desirable that the officers of the bank should be interested in the stock of the bank.”[44]

It is interesting to note that at the time that Wiggin did in his own partners and the bank’s shareholders, there was really no regulations governing either insider trading, the use of borrowed money to leverage investments or not releasing all of the information that he had access to relative to the bank’s condition. The Senate banking investigation caused the 1933 and 1934 Security Acts to come into being and Mr. Wiggin was one of the key reasons that they were enacted. Chase Bank later merged with Bank of Manhattan to become Chase Manhattan. Moreover, Chemical Bank purchased Manufacturers Hanover and that entity effectively took over Chase and J.P. Morgan. The name of that monolith called, J.P. Morgan, Chase.

Wiggin, who died in obscurity, has gone down in financial history as a man that set the standard for dealing from the bottom of the deck. The Robber Barons at least told you that you were going to get screwed and made no pretense that they were going to separate you from your money, this guy said one thing and did another doing in everyone in sight. Probably the most amazing thing about this scoundrel is the fact that he survived to the age of 83.

 

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