Bank of United States stock prices, from September 28, 1928 – December 12, 1930.
Regent’ s Park of potential directors who would monitor the bank’ s operations. Plans were made for consolidation with the bank among Manufacturers Trust, International Trust and Public National, yet nothing came to fruition. Had the merger gone through, it would have been the fourth largest bank in New York City, with a capital contribution of $ 30 million.
Reasons for the lack of consolidation which could have saved Bank of United States vary among economists and economic historians. Economists Milton Friedman and Anna Jacobson Schwartz in their preeminent work, A Monetary History of the United States, 1867 – 1960, opined the Federal Reserve failed to act. According to their argument, had the Fed stepped in and continued lending funds and support for the merger, by their estimation, the bank would have been saved.
They also claimed that a subtle degree of antisemitism may have played a role in the decision, basing their assertion on comments made by then Superintendent Broderick. In his Annual Report of
Superintendent of Banks dated December 31, 1930, Broderick implied that closing [ the bank ] might result in widespread bankruptcy for many Jewish merchants. No sound evidence has surfaced supporting this thesis, however. Moreover, Broderick’ s comments appear to have been a part of a broad indictment of events transpiring in the absence of the merger. Patrick O’ Brien and Paul B. Trescott further remarked in their essay,“ The Failure of the Bank of United States, 1930,” that leading Jewish financiers took a“ dim view” of the bank’ s practices. Furthermore, New York City banks stood ready to support Manufactures Trust, a Jewish owned institution.
Others, such as economist Peter Temin, remarked how candidates for prospective mergers may have been overly cautious, given the prevalence of illegal real estate holdings and loans made to affiliates— actions encouraged by Marcus and Singer. As to the Federal Reserve’ s hesitancy to lend, economic historian Joseph Lucia noted the central bank had been lending funds to the bank, but its underperforming real property assets prompted the Fed to stop. The generally accepted conclusion seems that Bank of United States operated under fraudulent executive management, speculated excessively in real property related transactions and failed to disclose the operations and practices of its securities affiliates.
The trial of Marcus and the two Singers resulted in guilty verdicts on June 19, 1931. One offense concerned the issue of allowing one of their subsidiaries, Municipal Safe Deposit Co., to cancel an $ 8 million debt owed to the Bank of United States. Apparently, the company, a safe deposit firm, received these funds from other bank-owned subsidiaries. The prosecution held it was illegal for a safe deposit company to hold securities in connection with a loan cancelling deal. Consequently, the court ruled that a misappropriation of funds occurred since“ no meetings were held” involving the corporations who owed money to the bank, all while the transaction was advanced“ after business
44 FINANCIAL HISTORY | Spring / Summer 2026 | www. MoAF. org