20th century
In 1904, the bank helped finance the Panama Canal. Two years later, in 1906, 11% of the U.S. federal government's bank balances were held by National City. National City at this time was the banker of Standard Oil, and the Chicago banking factions accused U.S. Secretary of the Treasury L. M. Shaw of having too close of a relationship with National City and other Wall Street operators.[12] In 1907, Stillman, then the bank's chairman, intervened, along with J. P. Morgan and George Fisher Baker, in the Panic of 1907.
Between 1910 and 1911, the Department of State backed a consortium of American investors headed by Citibank to acquire control over the Banque Nationale de la République d'Haïti, which was the sole commercial bank of Haiti and served as the Haitian government's treasury. Citibank then lobbied for the United States occupation of Haiti, which began in 1915. During the occupation, Citibank imposed a US$30 million loan on the Haitian government, which was described by communist[13] George Padmore as transforming Haiti into an "American slave colony".[14] Citibank would go on to acquire some of its largest gains in the 1920s due to debt payments from Haiti, according to later filings to the Senate Finance Committee.[15]
When the Federal Reserve Act allowed it,[16] National City Bank became the first U.S. national bank to open an overseas banking office when it opened a branch in Buenos Aires, Argentina, in 1914. Many of Citi's present international offices are older; offices in London, Shanghai, Calcutta, and elsewhere were opened in 1901 and 1902 by the International Banking Corporation (IBC), a company chartered to conduct banking business outside the U.S., which was forbidden to U.S. national banks. In 1918, IBC became a wholly owned subsidiary and was subsequently merged into the bank. The same year, the bank evacuated all of its employees from Moscow and Petrograd as the Russian Civil War had begun, but also established a branch in Puerto Rico. By 1919, the bank had become the first U.S. bank to have $1 billion in assets.
As of March 9, 1921, there were four national banks in New York City operating branch offices: Chatham and Phenix National, the Mechanics and Metals National, the Irving National, and National City Bank.[17]
Charles E. Mitchell, also called "Sunshine" Charlie Mitchell, was elected president in 1921. In 1929, he was made chairman, a position he held until 1933. Under Mitchell, the bank expanded rapidly and by 1930 had 100 branches in 23 countries outside the United States. The policies pursued by the bank under Mitchell's leadership are seen by many people as one of the prime causes of the stock market crash of 1929, which led ultimately to the Great Depression.[18][19][20][21][22][23][24][25]
In 1933, the Pecora Commission, a United States Senate committee, investigated Mitchell for his part in tens of millions of dollars in losses, excessive pay, and tax avoidance, later leading to his resignation.[28][29][30][31][32][33] U.S. Senator Carter Glass said of him, "Mitchell, more than any 50 men, is responsible for this stock crash."[34][35]
On December 24, 1927, its headquarters in Buenos Aires, Argentina, were blown up by the Italian anarchist Severino Di Giovanni, in the frame of the international campaign supporting Sacco and Vanzetti.[36]
In 1940 and 1941, branches in Germany and Japan closed. In 1945, the bank handled $5.6 billion in Treasury securities for War and Victory Loan drives for the U.S. government.
In 1952, James Stillman Rockefeller was elected president and then chairman in 1959, serving until 1967. Stillman was a direct descendant of the Rockefeller family through the William Rockefeller (the brother of John D.) branch. In 1960, his second cousin, David Rockefeller, became president of Chase Manhattan Bank, National City's long-time New York rival for dominance in the banking industry in the United States.[37][38]
Following its merger with the First National Bank in 1955, the bank changed its name to The First National City Bank of New York, then shortened it to First National City Bank in 1962. It is also worth noting that the bank began recruiting at Harvard Business School in 1957, arranged the financing of the 1958 Hollywood film, South Pacific, and had its branches in Cuba nationalized in 1959 by the new socialist government, and has its first African-American director in 1969, Franklin A. Thomas.
The company organically entered the leasing and credit card sectors, and its introduction of US dollar-denominated certificates of deposit in London marked the first new negotiable instrument in the market since 1888. Later to become part of MasterCard, the bank introduced its First National City Charge Service credit card—popularly known as the "Everything Card"—in 1967.
In 1967, Walter B. Wriston became chairman and chief executive officer of the bank.[39]
In the 1960s, the bank entered into the credit card business. In 1965, First National City Bank bought Carte Blanche from Hilton Hotels. Three years later, under pressure from the U.S. government, the bank sold this division. By 1968, the company created its own credit card. The card, known as "The Everything Card", was promoted as a kind of East Coast version of the BankAmericard. By 1969, First National City Bank decided that the Everything Card was too costly to promote as an independent brand and joined Master Charge (now MasterCard). Citibank unsuccessfully tried again from 1977 to 1987 to create a separate credit card brand, the Choice Card.
In 1967, First National City Bank reorganized as a one-bank holding company, First National City Corporation, or "Citicorp" for short. However, the bank had been nicknamed "Citibank" since the 1860s, when City Bank of New York adopted it as an eight-letter wire code address. "Citicorp" became the holding company's formal name in 1974, and in 1976, First National City Bank was renamed Citibank, N.A.[40] The name change also helped to avoid confusion in Ohio with Cleveland-based National City Corp., though the banks never had any significant overlapping areas except for Citi credit cards issued in National City territory. In addition, at the time of the name change to Citicorp, in 1968, National City of Ohio was mostly a Cleveland-area bank and had not gone on its acquisition spree that would occur in the 1990s and 2000s. Any possible name confusion had Citi not changed its name from National City eventually became completely moot when PNC Financial Services acquired National City in 2008 during the subprime mortgage crisis.
In 1987, the bank set aside $3 billion in reserves for loan losses in Brazil and other developing countries.[41] In 1990, the bank established a subsidiary in Poland. In 1994, it became the world's biggest card issuer.
Also in the 1980s, the bank launched the Citicard, which allowed customers to perform all transactions without a passbook.[42] Branches also had terminals with simple one-line displays that allowed customers to get basic account information without a bank teller.
John S. Reed was selected CEO in 1984, and Citi became a founding member of the CHAPS clearing house in London. Under his leadership, the next 14 years would see Citibank become the largest bank in the U.S., the largest issuer of credit cards and charge cards in the world, and expand its global reach to over 90 countries.
In 1981, Citibank chartered a South Dakota subsidiary to take advantage of new laws that raised the state's maximum permissible interest rate on loans to 25% (then the highest in the nation). In many other states, usury laws prevented banks from charging interest that aligned with the extremely high costs of lending money in the late 1970s and early 1980s, making consumer lending unprofitable. There is no current maximum interest rate or usury restriction under South Dakota law when a written agreement is formed.[43]
Citi acquired United Bank of Arizona and Great Western Bank & Trust in the 1980s, but sold its Arizona operations to Norwest in 1993.[44]
