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RESPONSE LETTER

July 17, 2007

Mr. Donald Walker, Senior Assistant Chief Accountant

Ms. Sharon M. Blume, Staff Accountant

Division of Corporation Finance

United States Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20002

Mail Stop 4561

                   Re:

    JPMorgan Chase & Co.

    Form 10-K for the Fiscal Year Ended December 31, 2006

    Form 10-Q for the Fiscal Quarter Ended March 31, 2007

    File No. 1-5805

Dear Mr. Walker and Ms. Blume:

               JPMorgan Chase & Co. (the “Firm”) hereby submits this letter to respond to comments by the
Staff of the Securities and Exchange Commission contained in your letter dated June 26, 2007
addressed to Michael J. Cavanagh.

               To assist in your review of our responses, we have set forth below in full the comments
contained in the letter, together with our responses to such comments.

Form 10-K for Fiscal Year Ended December 31, 2006

Notes to Consolidated Financial Statements

Note 13 – Allowance for Loan Losses, page 113

    1.

    You disclose the formula-based component of your allowance is the product of a statistical
calculation and the statistical calculation is partially the product of probability of
default. Please tell us the period over which you calculate the probability of default.
Explain how that period supports an incurred, rather than expected, loss model.

The Firm utilizes statistical models to estimate the probable losses inherent in the Firm’s
currently existing performing portfolio of wholesale and consumer loans.

For risk-rated loans (generally loans originated by the wholesale lines of business), the
statistical estimate is the product of default probability and loss severity. Default
probabilities are differentiated based on the risk rating of the loan and are calculated based on
the remaining maturity of the underlying loans as historical information indicates that the loss
inherent in a loan varies based on the term of the loan. Risk ratings utilized by the Firm reflect
all known events to date related to counterparties. Future

events or conditions (i.e., downgrades) related to the loan obligor are not reflected in current
risk ratings and only impact the calculations in the period when a rating change occurs. Thus, the
statistical calculation employed by the Firm to derive the allowance estimates the amount of
probable losses inherent in the portfolio at the balance sheet date, based on conditions existing
at the point in time the calculation is made.

For scored loans (generally loans originated by the consumer lines of business), the statistical
estimate of probable losses is determined by applying an estimated loss factor over the loss
coverage period, which approximates twelve months. The loss factors and coverage period are
reflective of the Firm’s historical loss experience for pools of consumer assets.

The Firm estimates the probable losses inherent in the Firm’s currently existing performing
portfolio of wholesale and consumer loans in accordance with Statement 5, Accounting for
Contingencies (SFAS 5).

Note 28 – Accounting for Derivative Instruments and Hedging Activities, page 131

    2.

    You disclose on page 53 that the Corporate Segment includes Treasury, which manages the
structural interest rate risk for the Firm. We note the activities of your other segments
include assets and liabilities upon which you utilize hedge accounting. To help us gain a
better understanding of your hedge accounting process, please provide us with the following
additional information:

    Ÿ

    Describe the process by which derivative instruments are obtained by the various
segments for hedge accounting purposes: for example, tell us which group or groups
(i.e. Treasury, Trading Desk etc.) are responsible for obtaining these derivative
instruments and describe the process by which they are obtained;

    Ÿ

    Tell us if the responsible groups obtain the derivative instruments from internal or
external sources or both; and

    Ÿ

    In connection with the above, tell us how the various segments determine the
conditions for hedge accounting are achieved.

Each business segment and the Corporate segment (which includes Treasury) utilizing hedge
accounting is responsible for ensuring that all Statement 133, Accounting for Derivative
Instruments (SFAS 133), qualification criteria are met for each hedge relationship initiated. All
such segments are required to review and document the qualifications for the specific type of hedge
prior to initiation of a hedge relationship; in addition, each such segment is required to review
and document that the proposed hedge relationship meets each qualification on an ongoing basis.

A segment utilizing SFAS 133 hedge accounting may transact the derivative hedging instruments
directly with a third party, or with an internal trading desk. If the segment uses an internal
trading desk, then the internal trading desk transacts a derivative instrument with a third party
on the segment’s behalf. Whether a third party derivative instrument is executed directly, or
indirectly through a trading desk, the SFAS 133-

trained staff in the hedging segment ensure that the third party derivative instrument meets all of
the qualifications for SFAS 133 hedge accounting at inception and on an ongoing basis.

Form 10-Q for the Fiscal Quarter ended March 31, 2007

Note 3 – Fair Value Measurement

Changes in level three (3) fair value measurements, page 76

    3.

    Please tell us and in future filings disclose for fair value measurements using significant
unobservable inputs (Level 3), the specific line items in which gains or losses included in
earnings are reported in your Consolidated Statements of Income. Refer to paragraphs 32c-d
and A35 of SFAS 157.

The Firm discloses the income statement line item classification for its significant products in
the financial statement footnote specific to the product. For example, the income statement
classification for derivative instruments (including derivative instruments classified as Level 3
for Statement 157, Fair Value Measurement (SFAS 157) disclosures) is disclosed in Note 5 –
Principal Transactions.

A mapping of the relevant disclosures has been provided below.

    Level 3

    Classification –

    Reference to Consolidated Income

    Instrument

    Statement of Income

    Statement Classification in 1st Qtr

    or Other

    Form 10-Q

    Comprehensive

    Income

                Trading assets and
liabilities- debt
and equity
instruments

    Principal Transactions

    Note 5- Principal Transactions

    Available-for-sale

securities

    Accumulated other

comprehensive income

(loss)

    Note 11- Securities

Note 19- Accumulated other

comprehensive income (loss)

    Derivatives

    Principal Transactions

    Note 5- Principal Transactions

    Private equity

investments

    Principal Transactions

    Note 5- Principal Transactions

    Loans

    Principal Transactions

Mortgage
fees and
related income

    Note 4- Fair Value Option

Note 5- Principal Transactions:

Investment Bank FVO election

Note 6- Other noninterest revenue

Note 13- Loans

    Mortgage servicing

rights

    Mortgage fees and
related income

    Note 6- Other noninterest revenue

Note 17- Goodwill and other
intangible assets

    Other assets

(equity method

investments)

    Other income

    Note 1- Basis of presentation

Other Income

Note 4- Fair Value Option

    Deposits

    Principal Transactions

    Note 4- Fair Value Option

Note 5- Principal Transactions

    Beneficial

interests issued by

consolidated subs

    Principal Transactions

    Note 4- Fair Value Option

Note 5- Principal Transactions

    Long-term debt

    Principal Transactions

    Note 4- Fair Value Option

Note 5- Principal Transactions

In future filings, the Firm will also include within its Fair Value Measurement footnote a
description of the specific line items in which gains or losses on Level 3 instruments are
included.

Transition, page 77

    4.

    You disclose that in connection with the adoption of SFAS 157, you recorded a
cumulative-effect increase to Retained earnings of $287 million effective January 1, 2007,
primarily related to the release of profit previously deferred in accordance with EITF 02-3.
Please provide us with the following additional information regarding your transition
adjustments:

    Ÿ

    Tell us how you considered the guidance in paragraphs 37(a) and 37(c) of SFAS 157
in determining whether cumulative-effect adjustments to Retained earnings were
necessary for the financial instruments described in those paragraphs; and

    Ÿ

    Separately quantify those adjustments, if applicable.

The components of the Firm’s cumulative-effect increase to Retained earnings by applicable
transition paragraph of SFAS 157 were as follows:

    Transition provision

    Cumulative-effect (after-tax)

              Paragraph 37(a)

    Not applicable

    Paragraph 37(b)

    $210 million

    Paragraph 37(c)

    $77 million

As of January 1, 2007 the Firm had no positions in Level 1 of the fair value hierarchy for which a
blockage factor had been applied; and thus, paragraph 37(a) was not applicable.

The Firm applied the transition provisions of paragraph 37(c) to hybrid instruments measured at
fair value at initial recognition under Statement 133 using the transaction price in accordance
with paragraph 16A of Statement 133.

    5.

    You disclose that in connection with the adoption of SFAS 157, you recorded an increase to
revenue of $464 million during the quarter ended March 31, 2007, due to there being sufficient
market evidence to support an increase in nonpublic private equity investments fair values.
Further, you disclose that there had not been an actual third party market transaction related
to these investments.

    Please tell us the specific market evidence you used to support the increase in fair values.

Prior to the adoption of SFAS 157, the Firm utilized third-party market-clearing transactions
related to each portfolio company as the primary basis for recording valuation adjustments to each
such private equity investment. In conjunction with its adoption of SFAS 157, which eliminated the
concept of reliability thresholds within a fair value measurement, the Firm revised its valuation
practices to incorporate other market evidence in the estimation of hypothetical exit value. Such
market evidence primarily includes observations of the trading multiples of public companies
considered comparable to the private companies being valued. Valuation adjustments are then
applied to these calculations to account for company-specific issues, the lack of liquidity
inherent in a non-public investment, and the fact that comparable public companies are not
identical to the private companies being valued.

The Firm believes its approach is consistent with other market participants and appropriately
considers the risk premium a market participant would demand given the uncertainty in the estimated
cash flows.

Note 4 – Fair Value Option

Elections, page 78

Loans

    6.

    You disclose that the Investment Bank elected to record loan origination and purchases
entered into after January 1, 2007 as part of its securitization warehousing activities at
fair value and that similarly, Retail Financial Services elected to record prime mortgage
loans originated after January 1, 2007, that are warehoused pending your determination to sell
or to securitize the loans, at fair value. Further, you disclose that these elections were
made prospectively based upon the short holding period of the loans and/or negligible impact
of the elections. As SFAS 159 requires the choices to apply or not apply the fair value
option to be retroactive to the early adoption date, please tell us how you have complied with
the requirement. In your response, quantify the difference between the carrying amounts and
fair values of the above described loans at January 1, 2007.

Paragraph 25 of Statement 159, Fair Value Option (SFAS 159), states “at the effective date, an
entity may elect the fair value option for eligible items that exist at that date. The entity
shall report the effect of the first remeasurement to fair value as a cumulative-effect adjustment
to the opening balance of retained earnings.” In accordance with this paragraph, the Firm recorded
transition adjustments within Retained earnings for all items that were elected to be measured at
fair value under SFAS 159 and that existed as of January 1, 2007. However, not all warehouse loans
that existed as of January 1, 2007 were elected to be valued in accordance with the fair value
option; that is because the operational burden of changing the accounting basis for short term hold
portfolios exceeded the benefits of electing the option. These warehoused loans continued to be

accounted for as held-for-sale through the date of sale and no transition adjustment was recorded
for them at January 1, 2007.

The Firm has elected to record at fair value certain warehouse loans that were originated or
purchased after January l, 2007 with the intent to sell. As these loans did not exist as of the
transition date, no transition adjustment to Retained earnings was recorded for these loans.

Note 22 – Accounting for Derivative Instruments, page 101

    7.

    We note you refer the reader to the 2006 Annual Report for a further discussion of the Firm’s
use of and accounting policies related to derivative instruments. Please tell us an in future
filings disclose any material changes to your SFAS 133 hedging relationships resulting from
your election to fair value the related hedged items under SFAS 159 (for example,
discontinuance of hedge accounting). In addition, quantify for us the fair values of
derivatives used in SFAS 133 hedge accounting relationships at December 31, 2006 vs. March 31,
2007.

Three types of SFAS 133 hedged items were impacted by the Firm’s decision to elect fair value
measurement under SFAS 159: fixed-rate repurchase agreements and commercial mortgage loans and
prime mortgage loans that are warehoused for sale. With respect to these three items the Firm no
longer applies SFAS 133 hedge accounting. The fair values of derivatives used in SFAS 133 hedge
accounting relationships at December 31, 2006 involving repurchase agreements, commercial mortgage
loans and prime mortgage loans were net derivative liabilities of $2 million, $4 million, and $4
million, respectively.

The fair values of all derivatives used in SFAS 133 hedge accounting relationships at December 31,
2006 and March 31, 2007 were derivative assets of $849 million and $730 million, respectively, and
derivative liabilities of $837 million and $882 million, respectively.

In future filings, the Firm will disclose any material changes to SFAS 133 hedging
relationships resulting from the Firm’s election to fair value the related hedged items under SFAS
159.

*     *     *

This is to acknowledge that: (i) the Firm is responsible for the adequacy and accuracy of the
disclosure in this filings; (ii) staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action with respect to the filing; and
(iii) the Firm may not assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United States.

*   *   *   *

               If you have any questions or request any further information, please do not hesitate to call
the undersigned at 212-270-3632 or Neila B. Radin at 212-270-0938.

Very truly yours,

/s/ Louis Rauchenberger

Louis Rauchenberger

Corporate Controller