The Origin of Citibank

This article was written by Phineas Upham

Citi Bank has been a part of the US financial industry for over 200 years. It has been a major part of America’s rise to power throughout the 1900s, and it has had at least a minor role in much of the country’s financial crises since then. How Citi has survived, and where it came from, is a story of anger and perseverance in the face of certain doom.

Founding and Early Years

Citibank was the product of frustration with the banking system at the time. President Jefferson allowed the charter for the First Bank of the United States to lapse in 1811. This frustrated merchants like Alexander Hamilton, who quickly applied to charter their own banks in response. In June of 1812, the City Bank of New York was created, placing the war hero Samuel Osgood as its president.

The War of 1812 was the bank’s first opportunity to begin lending, choosing to finance several arms deals at a time when the Treasury Department was caught off guard.

World Stage

The bank was large, lending to the Union side during the Civil War and growing steadily. James Stillman joined the bank as president in 1891, helping the bank pioneer foreign-exchange trading. He also helped Spain and Japan with funding, and opened the first American bank branch in Buenos Aires.

Although the bank was at the center of the Crash of 1929, with some accusing CEO Charles E. Mitchell as being instrumental to the collapse, it later recovered and built its permanent headquarters in New York City where the bank still operates.

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About the Author: Phineas Upham is an investor at a family office/hedgefund, where he focuses on special situation illiquid investing. Before this position, Phineas Upham was working at Morgan Stanley in the Media and Telecom group. You may contact Phineas on his Twitter page.