hours.” Subsequent appeals only upheld the verdicts followed by sentencing in late June 1931. The court would eventually indict Superintendent Broderick for not closing the bank before more damage transpired; however, he was later cleared of any misconduct.
Although Bank of United States’ s collapse had little impact on the financial sustainability of other New York banks, it did contribute to a general discontent customers began feeling about the US financial system, particularly banks. After the closure of Austria’ s Kreditanstalt in early 1931, a major European bank, by spring, a wave of banks in the Midwest ceased their operations. Later that year, 10.5 % of US banks had failed, with one in seven banks closing since the fall of 1929.
In order to regain the public’ s trust, the federal government decided to act. Consequently, the Banking Act of 1933 barred commercial banks from both underwriting issues and affiliating with investment banks. The creation of the Federal Deposit Insurance Corporation( FDIC) insured deposits up to $ 2,500, and the institution
also served as a bank regulator. Such legislation instilled a sense of confidence in financial services during the remaining years of the 1930s, but no such regulation— then or today— would guarantee against corporate malfeasance, insider trading or excessive speculation.
Ramon Vasconcellos is a history professor and lecturer in Accounting and Economics at Barstow Community College in Barstow, CA. He has published numerous biographical and topical articles on the history of the West, particularly related to finance. He has also taught Economics and History at the University of London.
Sources
Friedman, Milton and Anna Jacobson Schwartz. A Monetary History of the United States, 1867 – 1960. Princeton University Press. 1963.
Geisst, Charles R. Wall Street: A History. Oxford University Press. 1997.
Hicks, John. Republican Ascendancy, 1921-1933. Harper and Row Publishers. 1960.
Kobrin, Rebecca.“ Too Big to Fall in 1930: The Failed Bank of United States and The Long Shadow of East European Jewish Immigrant Bank.” American Jewish History, 17. 2019.
Leuchtenberg, William E. The Perils of Prosperity, 1914 – 32. The University of Chicago Press. 1958.
Lucia, Joseph.“ The Failure of the Bank of United States: A Reprisal.” Explorations in Economic History, 22. 1985.
Schweikart, Larry.“ US Commercial Banking: A Historiographical Survey.” Business Review, 65. Autumn 1991.
Trescott, Paul B.“ The Failure of the Bank of United States, 1930.” A Rejoinder to Anthony Patrick O’ Brien by Paul B. Trescott. Journal of Money, Credit, and Banking, vol. 24, no. 3. August 1992.
Werner, M. R. Little Napoleon’ s and Dummy Directors Being the Narrative of The Bank of United States. Harper Brothers Publishers. 1933.
Wicker, Elmus. The Banking Panics of the Great Depression. Cambridge University Press. 1996.
www. MoAF. org | Spring / Summer 2026 | FINANCIAL HISTORY 45