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LETTER TO THE S.E.C.

Confidential Treatment

Requested by JPMorgan Chase & Co.

Page 1

December 7, 2005

Mr. Donald Walker

Senior Assistant Chief Accountant

Division of Corporation Finance

United States Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20002

         Re:

    JPMorgan Chase & Co.

Form 10-K for the Fiscal Year Ended December 31, 2004

Filed March 2, 2005

File No. 1-5805

Dear Mr. Walker:

     JPMorgan Chase & Co. (the “Company”) hereby submits this letter to respond to comments by the
Staff of the Securities and Exchange Commission contained in your letters dated November 17, 2005
and November 18, 2005 addressed to the undersigned.

     To assist in your review of our responses, we have set forth below in full the comments
contained in the November 17th and November 18th letters, together with our
responses to such comments.

     The Company hereby requests that the Securities and Exchange Commission afford confidential
treatment, pursuant to Rule 83, of the indicated portions of the responses to comments 2 and 3 of
the November 17, 2005 letter and to the entire response to the comment contained in the November
18, 2005 letter.

I. Letter of November 17, 2005

Form 10-K for the Fiscal Year Ended December 31. 2004

Audited Financial Statements

Notes to Consolidated Financial Statements

Note 12 — Allowance for Credit Losses, page 103

    1.

    We note that you recorded a $1.4 billion adjustment to your provision for loan losses
during 2004 as a result of the decertification of heritage Bank One’s seller’s interest in
credit card securitizations. In order to allow us to gain a better understanding of why
these interests were decertificated, please provide us with the following information:

Confidential Treatment

Requested by JPMorgan Chase & Co.

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    •

    The specific facts and circumstances that caused the decertification of the seller’s
interest and how these facts and circumstances align with your business plan,

    •

    Any liquidity implications resulting from the decertification; and

    •

    Whether you have the ability to recertificate the decertificated interests.

     Heritage Bank One and heritage JPMorganChase & Co. (JPMC) had different accounting policies
and classifications related to their seller’s interest in credit card securitizations. Both
accounting treatments were appropriate under generally accepted accounting principles: heritage
JPMC accounted for the seller’s interest in credit card securitizations as Loans, while heritage
Bank One accounted for the seller’s interest in credit card securitizations as an
available-for-sale debt security. Upon the merger of heritage Bank One with heritage JPMC,
management conformed the heritage Bank One seller’s interest in credit card securitizations to the
heritage JPMC policy.

     Management based its decision on the following: (i) the Firm manages the credit risk related
to the seller’s interests using the same credit review process used to estimate and measure credit
risk for its overall credit card receivables portfolio, including those receivables that have been
originated or acquired and not transferred into the securitization trust; (ii) the Firm determined
that it should apply a consistent accounting policy to the Firm’s aggregate portfolio of seller’s
interests, as assets with similar risk characteristics should be accounted for similarly; and (iii)
heritage JPMC’s accounting for its uncertificated seller’s interest as Loans is consistent with
banking industry practice; thus accounting for the Firm’s aggregate portfolio of seller’s interests
as Loans would more readily enable credit risk comparisons with peer organizations.

     In order to conform the accounting practice for the Bank One seller’s interest in credit
card securitizations to the heritage JPMC accounting policy, the form of the seller’s interest was
changed from a certificated interest (i.e., a security) to a non-certificated interest (i.e., a
loan). The de-certification changed the legal form of the seller’s interest but did not impact the
rights of any party to the transaction. The de-certification did not have any liquidity
implications; there is no active market for seller’s interests, which are generally bought and sold
only as part of credit card portfolio acquisitions or business combinations.

     Although management does not plan to re-certificate the seller’s interest in the Firm’s credit
card securitizations, there is no provision in the governing documents related to such
securitizations that would prohibit their re-certification.

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Confidential Treatment

Requested by JPMorgan Chase & Co.

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Note 25 — Commitments and Contingencies

Litigation reserve. page 118

    2.

    You state that you increased your litigation reserve by $3.7 billion during the second
quarter of 2004 in light of all information known at that date. So that we can understand
the basis for this increase, please provide us with the following additional information
for each significant event to which these reserves relate:

    •

    the specific information that became known that caused you to increase your
reserve during the second quarter of 2004, rather than another period; and

    •

    the date and amount of any settlements reached subsequent to June 30, 2004.

[redacted]

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Requested by JPMorgan Chase & Co.

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     The amount and date of announcement of settlements for the Heritage JPMC Material Litigations
were as follows:

    Announcement of

    Settlement

    Lawsuit

    Settlement

    Amount

    Worldcom class action

    March, 2005

    $2.0 billion

    Enron class action *

    June, 2005

    $2.2 billion

    Commercial Financial Services

    March, 2005

    $356 million

    *

    This settlement is subject to court approval and has not yet been paid.

     For the information of the staff, we note that, in connection with both the Worldcom and Enron
class action settlements, the Firm took additional litigation charges amounting to $900 million and
$1.9 billion, respectively. These charges were disclosed in the Firm’s Quarterly Reports on Form
10-Q for the quarter ended March 31, 2005 (pages 6, 72, and 81) and June 30, 2005 (pages 6, 84, and
95), respectively. As we disclosed in those filings, the charges were needed to cover the
unreserved costs of the settlements, and a portion of the $1.9 billion charge was used to add
further to the Firm’s litigation reserves. In addition, during late 2004 and 2005, settlements
were reached in various other lawsuits related to Worldcom and Enron, including a settlement in
August 2005 of a claim brought by the Enron trustee in the U.S. Bankruptcy Court. (This was
disclosed in the Firm’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, at
pages 84 and 96). The Firm continues to assess its litigation reserves and, as noted at Note 17 of
its Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, its litigation reserves
may be increased or decreased in the future to reflect further litigation developments.

Note 29 — Fair Value of Financial Instruments

Derivatives, page 122

    3.

    We note that you defer the initial trading profit for derivatives valued based on
models with significant unobservable market parameters until observable market data becomes
available. Please provide us with the following additional information:

    •

    Describe your accounting policy for recognition of trading losses at the inception
of these transactions and describe your policy for recognition of these losses
subsequent to inception. Describe the conditions for recognition; and

    •

    Separately quantify unrecognized trading gains and losses at the inception of the
transactions and recognized trading gains and losses subsequent to inception during
each period presented.

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Confidential Treatment

Requested by JPMorgan Chase & Co.

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     Recognition of estimated trading losses at the inception of a derivatives contract is not an
issue that typically arises, as it would be unusual for the Firm to enter into a derivative
transaction priced at an initial economic loss.

     The Firm’s accounting policy for recognizing trading losses at the inception of derivative
transactions with significant unobservable parameters is based on the guidance provided in
Statement of Financial Accounting Standards No. 5 (SFAS 5), Accounting for Contingencies, which
indicates that a loss that is both probable and estimable should be recognized immediately. The
Firm believes that its valuation models used to estimate the fair value for derivative transactions
provide a basis to make a reasonable estimate of the loss and that the control procedures and the
testing of the valuation models support the determination that the loss to be recorded is probable
of occurring in accordance with SFAS 5.

     The Firm recognizes that Emerging Issues Task Force Issue No. 02-03 (EITF 02-03), Issues
Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in
Energy Trading and Risk Management Activities, allows for an entity to defer an estimated loss at
the inception of a derivative transaction with significant unobservable parameters. However, it is
the Firm’s view that, with regard to recognition of trading losses, it is more appropriate to
follow the guidance in SFAS 5 as it is Level A guidance — as opposed to EITF 02-03, which is Level
C guidance.

     In contrast, with respect to recognizing estimated profits, the Firm’s policy is to apply EITF
02-03 and to amortize deferred profit over the remaining maturities of the derivative transaction.
The Firm believes its policy to amortize the deferred profits is appropriate for two reasons.
First, the risk of “mis-valuing” a transaction decreases as the period to maturity decreases:
thus, the recording of profit over the life of the derivative transaction—as parameters (i.e.,
reset dates) occur and cash flows are received—reflects the decrease in the “unobservability” in
the valuation. Second, amortizing the profit is consistent with the risk profile of the
transaction; in contrast, continuing to defer all of the initially estimated profit until maturity
of the underlying transaction does not reflect economic reality because at maturity the entity
would be recognizing all the profit when the risk of the transaction is zero.

[redacted]

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Confidential Treatment

Requested by JPMorgan Chase & Co.

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II. Letter dated November 18, 2005

Form 10-K for the Fiscal Year Ended December 31. 2004

Management’s Discussion and Analysis

Balance Sheet Analysis

Trading Assets and Liabilities- Derivative Receivables and Payables, page 49

    1.

    We note your disclosure that the decline in derivatives receivables and
payables during 2004 was primarily due to your election, effective January 1, 2004,
to report the fair value of derivative assets and liabilities net of cash received
and paid under legally enforceable master netting agreements. Please tell us
whether you received a preferability letter from your independent accountants
regarding this change.

[redacted]

    If you require additional information, please feel free to
contact the undersigned.

Very truly yours,

/s/ Michael J. Cavanagh

Michael J. Cavanagh

Chief Financial Officer

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