J.P. Morgan Chase & Company's recent apology for ties to slavery and a corresponding $5 million scholarship program it set up for black students was a "step in the right direction for a tainted corporation," but the nation's no. 2 bank has a long way to go before it has fully paid its debt to African Americans, said one of the slave-reparations movement's central figures, Deadria Farmer-Paellmann.
J.P. Morgan Chase filed a disclosure statement with the city of Chicago on January 20 acknowledging that between 1831 and 1865, two of J.P. Morgan Chase's predecessor banks - Citizens Bank and Canal Bank in Louisiana - accepted approximately 13,000 slaves as collateral for loans and ended up owning approximately 1,250 of them as a result of defaults.
The company apologized on its Web site and to employees and said it will provide $5 million over five years for full tuition for African American undergraduates from Louisiana to attend college in their home state.
The scholarship is believed to be the first time an American company has paid reparations for slavery.
"It's definitely a reparations success, and we anticipate many more after this," said Ms. Farmer-Paellmann, executive director of New York non-profit Restitution Study Group, an organization dedicated to securing reparations for slavery to African Americans. J.P. Morgan Chase's action "confirms that the corporations can be held accountable for their roles in slavery. They've been brought to realize that they owe something," she said.
J.P. Morgan Chase was among 19 blue-chip companies named in a class action lawsuit seeking reparations filed by people claiming to be descendents of African slaves. The suit was dismissed last January by a judge claiming that, among other things, that the plaintiffs failed to show a personal stake in the dispute and that the statute of limitations had run out.
However, J.P. Morgan Chase's most recent actions probably made it more likely that other companies will follow suit and be forced to pay reparations, said conservative activist David Horowitz.
"These people [reparations activists] will keep on going as long as respectable institutions like J.P. Morgan give them credibility," said Mr. Horowitz. "This is a definite boost to the reparations scam."
J.P. Morgan Chase's disclosure was the result of a law passed in Chicago in 2003 requiring that companies doing business with the city research and disclose any links to slavery.
"We all know slavery existed in our country, but it is quite different to see how our history and the institution of slavery were intertwined. Slavery was tragically ingrained in American society, but that is no excuse," the company said in a statement published on its Web site. "We apologize to the American public, and particularly to African-Americans, for the role that Citizens Bank and Canal Bank played during that period."
Citizens Bank and Canal Bank merged to form Canal Commercial Trust & Savings in 1924, which was liquidated during the Great Depression.
A federally chartered bank in May 1933 - the National Bank of Commerce in New Orleans - assumed some of the failed bank's assets and was a predecessor to Bank One Corporation, which was purchased by J.P. Morgan Chase last year.
"The idea that the company that exists today has any relation whatsoever to a company that existed 150 years ago is a leap in the first place," said Mr. Horowitz, who wrote the book "Uncivil Wars: The Controversy over Reparations for Slavery."
Moreover, any reparations paid by J.P. Morgan Chase would be paid by African Americans, as well as non-black, said Mr. Horowitz.
"How many black shareholders are there in J.P. Morgan who are going to have to pay these stupid reparations now?" Mr. Horowitz said.
Meanwhile, Ms. Farmer-Paellmann, who is also a law said reparations activists intend to push for more money from J.P. Morgan Chase and others, and that the companies should have no say in how money for reparations is spent.