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Why Is JPMorgan’s Gold Vault, The Largest In The World, Located Next To The New York Fed?

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Zero Hedge
March 3, 2013

When two weeks ago we exposed the heretofore secret location of JPM’s London gold vault (located under the firm’s massive L-shaped office complex at 60 Victoria Embankment) we thought:what about New York? After all, while London is the legacy financial capital of the “old world“, it is in New York that the biggest private wealth of the past century is concentrated, and it is also in New York where the bulk of the hard assets backing the public money of the world’s sovereigns are located, some 80 feet below ground level in the fifth sub-basement of the New York Fed, resting on the bedrock of Manhattan.

That the topic of the gold “held” by the New York Fed – historically considered the gold vault with the largest concentration of gold bars in the world – has become rather sensitive, in the aftermath of the Bundesbank’s request to repatriate it (surely, but very, very slowly), is an understatement. Yet in the aftermath of some of the revelations presented here, we believe quite a few other countries will follow in Germany’s footsteps for one very simple reason: suddenly the question of whether their gold is located at 33 Liberty, or just adjacent to it, in what we have learned is the de facto largest private gold vault in the world, located across the street 90 feet below 1 Chase Manhattan Plaza, doesn’t appear to have a clear answer.

But first, some background.

The locations of New York’s commercial vaults, like those of London, are closely guarded. While there is occasional anecdotal speculation of where one may find any given vault, a definitive answer is rarely if ever in the public domain. Luckily, the past few years, which saw a surge in the price of gold and silver, have provided a variety of useful clues, as one after another bank applied to have its legacy precious metal vault certified for commercial use with the CFTC.

For those who aren’t easily discouraged, buried deep in the bowels of the CFTC’s website, is a veritable goldmine of data, in the form of supplemental applications from assorted CME members, who one after another, and very quietly, had the CME provide supplements to the CFTC vouching for their approval as “licensed depositories and weighmasters for gold, silver, platinum and palladium.”

For those curious (and that should be all who are interested by the precious metals space) what constitutes an approvable vault, we present the fully filed supplement application by Brinks (recently best known for having two of its armored cars captured in a Google Streetview snapshot just outside the JPM office at 60 Victoria Embankment) filed with the CFTC:

The application submitted by Brink’s, Inc. and Brink’s Global Services USA, Inc. for licensing its facility at 580 5th Ave., New York, NY for storage of the respective NYMEX and COMEX Gold, Silver, Platinum, and Palladium contracts meets the requirements of the Exchanges.

 

BACKGROUND INFORMATION

 

Brink’s Global Services USA, Inc. is a wholly owned subsidiary of Brink’s Inc. The Brink’s Company, which owns Brink’s Inc., was founded as Brink’s City Express in Chicago in 1859, and has been in operation for 150 years. Currently, it is based in Richmond, Virginia. Starting as an armored transportation service, it evolved to expand its operations to include precious metals storage in the late 1990s. Brink’s has been operating Licensed Depositories approved to store precious metals against the Exchanges’ Futures Contracts for 10 years. Brink’s international network operates about 875 facilities and services customers in over 50 countries. It is estimated that it employs approximately 59,400 employees.

 

NAME AND ADDRESS OF APPLICANT

 

Office Location

 

Brink’s Inc. and Brink’s Global Services USA, Inc. Suit400
580 Fifth Avenue
New York, NY 10036

 

Vault Location

 

Brink’s Inc.
580 Fifth Avenue
New York, NY 10036

 

LEASE/VAULT CLASSIFICATION/INSPECTION

 

Exchange staff inspected the facility at 580 5th Ave., New York, NY on Thursday, June 17, 2010, which is owned by Forty Seventh Fifth Company, LLC. Brink’s Inc. is the Tenant in the signed copy of the Lease Agreement, entered into on November 9, 1992, that was provided to the Exchange. There are 5,000 square feet of space available, enclosed by four steel reinforced cinder block walls with a concrete ceiling and concrete floor on top of bedrock. The interior of the facility is divided into several work areas, including a 752 square foot, modular vault capable of housing one million ounces of gold, platinum, and palladium, and an additional two million ounces of silver. The no floor vault solution is surface mounted to the existing basement slab which is described as bedrock. The walls and ceiling-grid carry a U.L. Class-3 designation which is torch and tool resistant. The vault is equipped with one U.L. listed Class-3 oversized vault door offering a clear opening of 52″wide x 78″ high. Custom Vault Corporation has certified that the existing vault system at 580 5th Ave., New York, NY meets all current U.L. listings as a Class-3 five-sided structure. It has also certified that all modular components (the modular vault panel components were manufactured by International Vault, Inc.) of the system have passed testing in accordance with the U.L. “Burglary Resistant Vault Doors” and “Modular Panels” standards. Cameras, motion detectors, and entry way alarms are installed throughout the interior and exterior access points. The activity is monitored 24 hours per day, 7 days per week. Access from exterior points to interior spaces is limited by the use of biometric proximity readers that record all activity. A majority of employees assigned to the area are licensed to carry Brink’s issued firearms. The Depository employs Metler Toledo SG32001DR high precision self calibrating balances. The scales weigh to a tolerance of 1/1000th of a troy ounce, and meet all of the Exchange’s requirements

Thus we know where at least one of the world’s largest precious metals depositories is located: deep underground the Diamond Tower located in the heart of Manhattan’s jewelry district.

Another such supplement was filed by the Bank of Nova Scotia’s Scotia Mocatta. What many may not know is that it was Scotia Mocatta’s vault that was destroyed in the events of September 11, as SM’s vault was located deep beneath 4 WTC. From the application:

The Bank of Nova Scotia’s Scotia Mocatta Depositary (SMD) is an Exchange-licensed depository for Gold, Silver, Platinum and Palladium. SMD has submitted applications, requesting that a new facility, located at International Airport Center, 230-59 International Airport Center Boulevard, Building C, Suite 120, Jamaica, New York, be approved for the storage of gold and silver deliverable against the COMEX Gold and Silver Futures Contracts, and for the storage of platinum and palladium against the NYMEX Platinum and Palladium futures contracts.

History: The Bank of Nova Scotia, doing business as SMD, is an Exchange Licensed Depository for the storage of gold, silver, platinum, and palladium, and its current facility is located in Manhattan at 26 Broadway. SMD was previously known as Iron Mountain Depository (IMD), its name was changed when it was acquired by the Bank of Nova Scotia in 1997. The IMD/SMD facility has been a COMEX licensed delivery point since 1975. SMD has planned to develop a new facility since the terrorist attacks upon the World Trade Center, which destroyed SMD’s facility at 4 WTC. SM subsequently returned to its existing and former facility as an intermediate measure while the new facility was designed and built.

 

In evaluating this application, SMD’s performance in the wake of the terrorist attacks on the World Trade Center must be noted. SMD’s Licensed Depository was located in a sub-basement of the WTC at the time of the attacks. When the material in this facility was trapped within the debris, SMD acted swiftly, offering to purchase any and all of the warranted material that was buried at the request of any holder of warrants to this material. Scotia further prepared to make replacement material stored in Canada available to offset any potential supply shortage that the destruction of its WTC facility might have caused.

So Scotia Mocatta’s place for a new vault is deep in Queens under what is described as a “two-story elevatored building located in a four building industrial park, Located within close proximity to JFK International Airport.”

Why Is JPMorgans Gold Vault, The Largest In The World, Located Next To The New York Fed? Scotia%20Mocatta%20vault

Just in case the gold has to take off rather quickly we assume.

And since both of these applications also contained an official list of licensed “depositories and weighmasters” we finally can compile a full, official list of where the largest commercial gold vaults in New York are located:

Why Is JPMorgans Gold Vault, The Largest In The World, Located Next To The New York Fed? Vaults 0

We now know that in addition to Brink’s vault lying on the bedrock at 580 Fifth, the following gold vaults are located as follows:

HSBC Bank USA

1 West 39th St.
SC 2 Level
New York, NY

Manfra, Tordella, & Brookes

90 Broad St.
Sub-Basement
New York, NY

Scotia Mocafta Depository, a Division of the Bank of Novia Scotia

230-59 Int’l Airport Center Blvd. 3002
Building C, Ste. 120
Jamaica, NY

Yet one name is missing. The same name which as we reported back in October 2010, reopened its undisclosed New York gold vault after it had been “mothballed in the 1990s.”

The name of course is JPMorgan.

Curiously (or perhaps not at all), when the CME on behalf of JPM submitted the certification filing alongside the comparable such supplements as filed by Brinks above, it requested a FOIA (Freedom of Information Act) confidential treatment. As a reminder, to be eligible for FOIA exemption status the protected information must be of vital importance to the nation’s safety. This is precisely what JPM thought the details surrounding its New York vault are. To wit:

Pursuant to Sections 8 and 8(a) of the Commodity Exchange Act (“CEA”), as amended, and Commission Regulation 145.9(d), NYMEX and COMEX request confidential treatment of Appendix A, Appendix B, and this letter on the grounds that disclosure of Appendix A and/or Appendix B would reveal confidential commercial information of the submitters (NYMEX and COMEX) and of other persons. Pursuant to Commission Regulation 145.9(d)(5), NYMEX and COMEX request that confidential treatment be maintained for Appendix A and Appendix B until further notice from the Exchanges. We also request that the Commission notify the undersigned immediately after receiving any FOIA request for said Appendix A, Appendix B or any other court order, subpoena or summons for same. Finally, we request that we be notified in the event the Commission intends to disclose such Appendix A and/or Appendix B to Congress or to any other governmental agency or unit pursuant to Section 8 of the CEA. NYMEX and COMEX do not waive their notification rights under Section 8(f) of the CEA with respect to any subpoena or summons for such Appendix A or Appendix B.

 

Please contact the undersigned at (212) 299-2207 should you have any questions concerning this letter.

 

Sincerely, /s/ Felix Khalatnikov

Yet oddly enough, the FOIA request letter itself, while also being filed with a request for Confidential Treatment, never got it. As a result it was posted at this address. Ooops.

But a far bigger oops, is that on the first page of said declassified confidential FOIA app, in black ink, we get the missing piece:

In addition, the Exchanges are providing the Commission with the application summary of requirements for the JP Morgan Chase Bank N.A. facility located at 1 Chase Manhattan Plaza, New York, NY.

And so, despite the extended attempts at secrecy, we finally hit the proverbial goldmine vault.

So what do we know about 1 Chase Manhattan Plaza. Well, aside from the fact that the 60-story structure, built in the 1950s, was the headquarters of the once-legendary Chase Manhattan corporation, and which when it was built was the world’s sixth tallest building, not much.

So we set off to learn more.

Why Is JPMorgans Gold Vault, The Largest In The World, Located Next To The New York Fed? 1%20CMP 0

To learn more, we first went to the motherlode: the Landmarks Preservation Commission, whose report on 1 CMP describes everyone one wants to know about this building and then much more, such as that:

One Chase Manhattan Plaza combines three main components: a 60-story tower, a 2½ acre plaza, and a 6-story base, of which 5 floors are beneath grade.

So the old Chase HQ, once the stomping grounds of one David Rockefeller, and soon to be the other half of JPMorgan Chase, has 5 sub-basements, just like the NY Fed…

Reading on:

Excavations, said to be the largest in New York City history, reached a depth of 90 feet

Or, about the same depth as the bottom-most sub-basement under the NY Fed…

But then we hit the jackpot:

Originally constructed with white marble terrazzo paving and enclosed by a solid parapet of white marble travertine that was personally selected by Bunshaft in Tivoli, Italy, the L-shaped plaza levels the sloping site and conceals six floors of operations that would have been difficult to fit into a single floor of the tower, including an auditorium seating 800 [and] the world’s largest bank vault.

And there you have it: the JPM vault, recommissioned to become a commercial vault, just happens to also be the “world’s largest bank vault.”

Digging some more into the curious nature of this biggest bank vault in the world, we learn the following, courtesy of a freely available book written by one of the architects:

On the lowest level was the vault, which rested directly on the rock – the “largest bank vault in the world, longer than a football field.” It was anchored to the bedrock with steel rods. This was to prevent the watertight, concrete structure from floating to the surface like a huge bubble in the event that an atomic bomb falling in the bay would blow away the building and flood the area.

In other words, the world’s biggest bank vault, that belonging to the private Chase Manhattan empire, and then, to JPMorgan, was so safe, the creators even had a plan of action should it sustain a near-direct hit from a nuclear bomb, and suffer epic flooding (such as that from Hurricane Sandy).

It is no surprise, then, that the street entrance to this world’s biggest vault located under 1 Chase Manhattan Plaza makes the entrance to any medieval impregnable fortress seem like child’s play in comparison. Courtesy of Google StreetView:

Why Is JPMorgans Gold Vault, The Largest In The World, Located Next To The New York Fed? 1%20CMP%20entrance 0

and if you rotate the StreetView 180 degrees…
View Larger Map

View Larger Map

Yet it is not what is on this side of the street, which just happens to be known as Liberty Street, that is what is the most interesting part of this whole story. It is what is on the other:

Why Is JPMorgans Gold Vault, The Largest In The World, Located Next To The New York Fed?

Or, shown another way…

Why Is JPMorgans Gold Vault, The Largest In The World, Located Next To The New York Fed? CMP%20NYFed%20map 0

That’s right, ladies and gentlemen, as a result of our cursory examination, we have learned that the world’s largest private, and commercial, gold vault, that belonging once upon a time to Chase Manhattan, and now to JPMorgan Chase, is located, right across the street, and at the same level underground, resting just on top of the Manhattan bedrock, as the vault belonging to the New York Federal Reserve, which according to folklore is the official location of the biggest collection of sovereign, public gold in the world.

At this point we would hate to be self-referential, and point out what one of our own commentators noted on the topic of the Fed’s vault a year ago, namely that:

Chase Plaza (now the Property of JPM) is linked to the facility via tunnel… I have seen it.  The elevators on the Chase side are incredible. They could lift a tank.

… but we won’t, and instead we will let readers make up their own mind why the the thousands of tons of sovereign gold in the possession of the New York Fed, have to be literally inches across, if not directly connected, to the largest private gold vault in the world.

We think readers can do a good enough job on their own.

This article was posted: Sunday, March 3, 2013 at 7:44 am





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