In the 1920s, the bank sold ~$20B worth of securities, a figure said to be the highest total in the country. Employees at local branches would persuade customers to move money from savings accounts or conservative bonds into exotic securities or City stock, vouching for the safety of the investments. Key to City’s strategy was its combination of commercial and investment banking. As one reporter noted at the time, Mitchell turned banks from “frightening places” into “department stores.” The visibility made City a top destination for people coming into new money. Mitchell, who was named City’s president in 1921, helped open at least 69 branches in 58 cities, advertising in magazines and on billboards, and dispatching salesmen into churches and train stations to drum up customers. The Dow Jones climbed from under $100 in 1920 to nearly $400 in 1929.Ĭity Bank didn’t just ride the wave it created demand. Buoyed by increases in production and income, Americans started buying more goods and investing.The creation of the Federal Reserve System in 1913 gave people more confidence in the US financial markets.The timing coincided with a new era of prosperity for America: City Bank had specialized in commercial banking, mostly for the wealthy, but was then branching into the sale of securities. In 1916, National City Bank, known today as Citigroup, hired Mitchell to head its new investment banking affiliate, National City Company. “If you want a pony, you must be its groom,” he recalled his father saying. He later characterized a story of how his father bought him a pony - the most privileged gift a child can receive - as a test of his work ethic. In a letter to the local newspaper, he once excoriated his high school’s battalion team for not practicing hard enough.īut Mitchell never questioned his own bona fides. This aura of discipline had been part of Mitchell’s persona since his childhood in Chelsea, Massachusetts. His doctor had recommended more fresh air, and the long walks - along with open-water swims - gave him endurance for 12-hour workdays.Ī portrait of Charles Mitchell in 1923 (Library of Congress) Unsubscribe whenever.ĭespite being one of the wealthiest men in New York City, Mitchell walked nearly five miles from his Fifth Avenue mansion to the financial district.
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Please try again!ĭelivered weekdays plus a bonus Sunday feature. Most mornings in New York City during the Roaring ’20s, Charles Mitchell could be spotted on the sidewalks of Manhattan on his way to work.
Senator Carter Glass said later, “He, more than any 50 men, is responsible for this stock crash.” The rise of a banking celebrity This time, his status as the ideal banker meant he represented something far grimmer. “I still see nothing to worry about,” he told reporters.īut that day was Black Thursday, and the next week brought Black Monday and Black Tuesday, the defining days of the 1929 stock crash, an event that signaled the beginning of the Great Depression.Ī few weeks later, when the smoke cleared enough to assess the damage, several leaders pointed at Mitchell once again.
The momentum spread at the exchange and, miraculously, the market stabilized. Morgan Jr., Thomas Lamont, and Albert Wiggin decided to go on a stock-buying spree to inject confidence into investors. Inside the House of Morgan, Mitchell and bankers J.P. Renowned as the “ideal modern banking executive,” he had reshaped the very idea of American banking as head of National City Bank and helped fuel the 1920s bull market, which was now in jeopardy. The news was particularly dismaying to Mitchell. When the market opened, stocks plummeted so fast the exchange’s ticker tape couldn’t keep up with the frenzy. Mitchell hurried up the steps of the House of Morgan, a two-story gray building across from the New York Stock Exchange. Around noon on one of the worst days in the history of Wall Street, Charles E.
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