14805. Bank of United States (Brooklyn, NY)

Bank Information

Episode Type: Run → Suspension → Closure
Bank Type: state
Start Date: December 11, 1930
Location: Brooklyn, New York (40.660, -73.951)

Metadata

Model: gpt-5-mini
Short Digest: d888d9a9

Response Measures

Accommodated withdrawals, Borrowed from banks or large institutions, Public signal of financial health, Capital injected, Full suspension, Books examined

Other: State prosecutors arrested men alleged to be spreading rumors; legal investigations and prosecutions followed.

Description

Multiple articles (Dec 1930—Jan 1931) describe runs on Brooklyn branches triggered by a malicious whispering/rumor campaign; Superintendent Broderick ordered the Bank of United States closed for examination. The bank did not resume normal operations and was the subject of prosecutions and investigations, consistent with suspension leading to permanent closure. Bank charter type not explicitly stated in these clippings, so set to unknown.

Events (2)

1. December 11, 1930 Run

Cause: Rumor Or Misinformation
Cause Details: Organized/malicious whispering campaign and false reports attacking the bank's soundness, prompting crowds and withdrawals at Brooklyn branches.
Measures: Volunteer used amplifier to broadcast reassurances; Clearing Association and other banks offered loans to help depositors; designated branches made loans to eligible depositors.
Newspaper Excerpt: A run on Bank of United States branches in Brownsville and East New York run was reduced yesterday by a Brooklyn business man who went about in a motor car using an amplifier to broadcast reassurances to crowds.
Source: newspapers

2. December 11, 1930 Suspension

Cause: Government Action
Cause Details: Superintendent of Banks Joseph Broderick ordered the bank closed for examination following runs and reports; closure intended to conserve assets and allow investigation.
Newspaper Excerpt: the suspensionn of the Bank of United States... Mr. Broderick ordered the bank closed for examination
Source: newspapers

Newspaper Articles (7)

1. December 12, 1930 Daily News New York, NY

Article from Daily News, December 12, 1930

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Broadcaster Helps Stem Run on Bank Volunteer Advises Crowds To Leave Deposits. A run on Bank of United States branches in Brownsville and East New York run was reduced yesterday by a Brooklyn business man who went about in a motor car using an amplifier to broadcast reassurances to crowds. He told the people who listened at New Lots and Georgia aves., Let it B U-and don't ask Y-BUY NOW Brooklyn. that he was not paid for his missionary work and he was merely acting as a friend and neighbor. Police said his work was very was not taking out deposits and that there was no cause for alarm. He spoke in Yiddish and in English. He said he was Fred Rosner of 765 New Lots ave., Brooklyn. RED GRANGE JR., HURT IN TACKLE Tackled as he was playing football at West 36th st. and Mermaid ave., Coney Island, Joseph Amura. 15. of 2930 West 36th st. fell against the curbstone and received a dislocation of his right shoulder. He was treated by Ambulance Surgeon Lifshitz of Coney Island hospital. $3 FOR OUT-OF-LINER Because he cut out of line. Samuel Casseman of 1228 Elizabeth st., Inwood. was fined $3 in Far Rock-

2. December 12, 1930 Brooklyn Eagle Brooklyn, NY

Article from Brooklyn Eagle, December 12, 1930

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BANK OF AID RISES TO $120,000,000 Continued from Page office managers that many persons who made redeposited their money later in the day. Crowds at Second Bank Lines of depositors gathered this morning in front of several branches of the Public National Bank & Trust Company, which was mentioned in the merger rumors. A double line of about 250 persons formed shortly after o'clock front the branch at Watkins St. and Pitkin Ave. Police estimated the crowd outside the branch at 3817 3d Ave., the Bronx, at Some depositors lingered around the entrance of the Bank United States branch at Saratoga and Pitkin Aves., this morning, but at other branches throughout the city there were only scattered groups. There no disorder. Another Bank Helps Yesterday. 23 members of the Clearing Association announced their willingness to lend money depositors who could not afford to wait until the affairs of the bank are straightened out. Today bank announced do likewise. Edward S. Rothchild, president of the Chelsea Bank and Trust Company: which has branches Manhattan and the Bronx, said his bank would lend on the same terms as the members of the association. Included in the deposits in the Bank of United is $164,927.11 in postal savings, was learned today. The Federal Government se-

3. December 16, 1930 The Brooklyn Daily Times Brooklyn, NY

Article from The Brooklyn Daily Times, December 16, 1930

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URGE FURTHER AID IN U.S. BANK CASE Benson Park Civics Ask State to See That Depositors Are Assured of All Funds. Seeking future safety_ for all bank depositors, the Benson Park Civic Association closed an agitated special meeting last night in the community house at 79th st. and Bay pkwy. with adoption of a resolution calling for further assistance from Gov. Roosevelt and State B in Superintendent Broderick in connection with the suspensionn of the Bank of United States. United States. The civic association, which is in a neighborhood where there were two branches of the Bank of United States, in its resolution called upon the State officials to use their powers 80 that "depositors may be assured of all their monies on deposit and be enabled to obtain them as soon as possible and further to take steps toward the enactment of such legislation will prevent such occurrences in the future, so that confidence our banks shall remain unimpaired. To keep depositors of the bank informed as to the progress made in its affairs, thus neutralizing rumors, a committee was named composed of National I. Helfgott, past president of the association. chairman, J. M. Poss, also past president, as counsel, and Joseph A. Lenny. Even the City of New York has funds in the Bank of the United States, apparently feeling It was safe, we can't be blamed for having felt the same way," Mr. Poss declared. "It is fine state of affairs if you put money in bank and feel tickled to death if you it back. "When men lost in the stock market we felt sorry for them, but after all they took risk. It was as if they had made deal that/ hadn't been successful. But when we put our money in thrift or savings accounts we want to be sure it is safe." Frank Strahs, representing national bank of the neighborhood. explained the benefits resulting from the State Banking Department's managen of affairs when a run started on the Bank of the United States. He also explained the offer of the New York Clearing House Committee in connection with loans amounting to 50 per cent. of deposits in the closed bank. A law banks to invest as carefully as savings banks or national banks was needed, in the opinion of Max Schwabel, who' took part in the open discussion. Too many persons had not realized the distinction between various types of he pointed out. Harold Deane, president of the association. presided at last night's meeting. which was devoted to discussion of what was needed to make banks safe and to explanations of banking procedures for the benefit of depositors.

4. December 24, 1930 Times Union Brooklyn, NY

Article from Times Union, December 24, 1930

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BANK WHISPERING (Continued from page city apread rapidly after the cir. curnstances surrounding the closing became known. reports, which amount attacks the soundness of some strongest institutions, are being spread the New York Merchants' Association declared meeting "The duty volves the general public of halting the activities of those who are breeding lack confidence." While the investigation into the source rumors was taken up to-day by State and national Joseph Broderick, prepared carry inquiry into affairs the Bank and the Bank United latter which has working for two weeks past. BRODERICK USES CAUTION "One thing and thing only about the present situadeclared Mr. after closed the Chelsea Bank at He comment further, but was ferring the paign' which closing the Bank United States weeks earlier Before he closed the bank the superhad his belief that an "organized and malicious campaign statement concerning the bank's assets liabilities closed will issued Broderick He nounced that auditors are going books alleged Communists arrested during disturbance the bank tioned Michael Mermaid Coney Lodge, West 144th street David bank, said phone calls had received Monday yesterday by several hundred attacking bank's credit and them withdraw their accounts. Reports the agitawas the either munists Wall bears are under investigation the State Bureau of Securities punishby assistant general in charge declared he would prosecute all such cases are brought to his tion. The men arrested for creating disturbance front the bank Monday night will also BANK APPARENTLY SOUND Weight was given the theory that the closing the Chelsea Bank was brought almost entirely false by the Broderick that far knew there nothing wrong with the condition institution. banking superintendent said that he took bank because that step seemed necessary to conserve its assets for stockholders depositors. The of the bank's caused reaction bankers unanimous declaring if its closing was interpreted affecting banks would simply case founded spreading. The Chelsea relatively small about 40,000 depositors. neither member the FedReserve System of the New York Clearing House. The deposits the bank have shown marked recent weeks. Oct. they amounted to on Dec. 19 to only over More and more depositors, was learned, have recently withdrawn money rumors bank's condition gained headway. At conference between Mr. banking ficials night was tide the its difficulties, but midday the runs its had that close its that he ready discuss plans for STORM BROOKLYN BRANCH The only branch of the on Bedford avenue near Crowds made appearance line until the doors were shut Meanwhile the plan devised the Banking per cent. lcans defunct Bank of United States function smoothly Lines of depositors who applied for week again front the designated Brooklyn branches morning. About persons in borough eligible receive their loans all the 8,000 depositors the made their branches the bank. figures, howavailable what the original loan cants applied for and cevied their money. The Brooklyn Depositors and

5. December 24, 1930 Times Union Brooklyn, NY

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BANK WHISPERING (Continued from page 1) city spread rapidly after the circumstances surrounding the bank's closing became known. "False reports, which amount attacks on the soundness of some strongest institutions, are being spread daily," the New York Merchants' Association declared meeting yesterday. duty volves the general public of haltthe activities of those who are lack of confidence." While investigation into the source of underground rumors was taken to-day by city, State and national authorities, Joseph Broderick, banks, prepared carry inquiry into the affairs the ChelBank and the Bank United States, the latter which been working for two weeks BRODERICK USES CAUTION "One thing and one thing only brought about the present situadeclared Broderick, closed the Chelsea Bank at yesterday. He refused comment further, understood he ferring "whispering campaign' the Chelsea closing the Bank United States weeks earlier. Before closed the bank yesterday the had belief that an under concerning the bank's and liabilities the time yesterday will issued later, Broderick He nounced that auditors are going books to-day. Two alleged arrested during disturbance main bank yesterday were questioned this afternoon attaches Attorney General's office. They identified as Michael 1631 Mermaid Coney and Thomas Lodge, West street, David the bank, he had been that phone calls had been received Monday yesterday by several hundred depositors, bank's credit urging them withdraw their accounts. Reports the agitation the either Communists Wall Street bears are under investigation to-day. malicious rumors, the State Bureau ties pointed crime Watson assistant attorney general charge. declared he would prosecute such that are brought to his attenThe two men arrested for creating disturbance front of the bank Monday night also be prosecuted, learned. BANK APPARENTLY SOUND Weight was given the theory that the of the Bank brought on entirely by false the Broderick that far as he there was the condition of the banking said took the that its assets for stockholders and The of the caused no in Wall Street, unanimous declaring its closing affecting other banks would simply another founded and malicious rumorspreading. Chelsea relatively small about 40,000 depositors. neither member the Fed Reserve System nor of the New York Clearing House. The deposits the bank have shown shrinkage weeks. Oct. amounted to little over More and was learned, have recently money bank's condition gained headway. conference between Mr. and various banking ficials Monday night decided try tide the bank ficulties, midday yesterday runs its such that necessary close doors. Mr. this morning that he was not ready discuss any plans for rehabilitation STORM BROOKLYN BRANCH The only Brooklyn of the Chesisea on Bedford near Crowds made their appearance there early until the doors were shut in afternoon. Meanwhile the plan devised by Banking the of per cent. loans defunct Bank United States continued function smoothly depositors who applied for week again front the designated Brooklyn branches this morning. About persons in borough eligible receive their Nearly all of the 8,000 depositors yesterday, made their branches the No figures, portion original loan actually for their applicawas and

6. January 21, 1931 Brooklyn Eagle Brooklyn, NY

Article from Brooklyn Eagle, January 21, 1931

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Eagle Is Giving Information To Bank of U. S. Depositors Through Attorney Perskin Israel Perskin, of counsel for Bank of United States depositors, will furnish information as to depositors' rights to recover in this column. Address questions to him in care of the Eagle. Q. After seeing your column in today's paper was wondering if you people would be so kind as to answer few questions for me. (1) Is the Bank of United States a shareholders' bank? (2) If so, are the shareholders responsible for the bank's liabilities? (3) Can a bank under the Federal Reserve System fail? (4) Is the condition of the Bank of United States in bad way or is it because of the run on the bank that Mr. Broderick ordered the bank closed for examination? J. H. K. A. (1) The Bank of United States is stockholders bank. (2) The stockholders are responsible for double the amount of the face value of their stock. (4) You will have to inquire of Mr Broderick, the Superintendent of Banks. for his reasons for closing the banks. I cannot answer that question. United States and was told that the bank "stood behind each share. Kindly tell me is there any chance, as have lost all had. E. C. A. can best answer your question by stating that one of the purposes of the investigation which is about to be commenced by Mr. Steuer and his staff is to ascertain whether or not fraud has been committed upon stockholders in the sale of stock to them. Q was a depositor in the Bank of United States. My wife has power of attorney and with that she applied for application on Tuesday, but she was refused same. Do you think depositors will be paid in full and how soon? A. It is difficult for any one to state at this time whether or not depositors will be paid in full and particularly when the payment or distribution will be made to stockQ. Purchased stock of Bank of holders. From present indications it would not appear as though depositors will get 100 cents on the dollar. Q. would appreciate some information regarding a check which issued from the Bank of United States. On Dec. issued a check to my landlord which he returned about a week later, asking for check from bank which is still doing business. Please advise me whether am liable for this check which was given to him one week before the closing of the bank. A. The question that you ask involves question of law as a result of a private negotiation between you and your landlord. As it is not the purpose to give legal advice here. but only information about the Bank of United States, would advise you to consult your private attorney. DAUGHTER BORN Mr. and Mrs. Edwin J. Grant of Floral Park, L. I., annoupnce the birth of daughter on Saturday. at the Samaritan Hospital. Mrs. Grant was formerly Miss Mary E. Collins, daughter of Mr. and Mrs. John J.

7. March 11, 1931 Times Union Brooklyn, NY

Article from Times Union, March 11, 1931

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BRODERICK PLANS $50,000,000 (Continued from page he reserved decision and gave attorneys two days to file briefs. Israel Perskin, special attorney general, this afternoon questioned Morris Dlugasch, of 1304 President street, real estate dealer, the Brooklyn investigation into the affairs the closed bank. Dlugasch testified first became connected with the Municipal Bank & Trust Company 1922 and later with the Bank of United States when the Municipal Bank merged with it in April, 1929. He said he was, for time, member the which passed on loans made by the bank. Perskin went into detail in questioning the merger and then launched into the real loans from the bank. OWES $185,000 ON NOTES Dlugasch said he now owes the Bank United States $185,000, loaned him on his personal note, secured stock in three realty porations which he controls. The stock has value, he said, and only one the realty concerns bank account, totaling 'about branch Bank United States. His loan was $200,000, and he said he had reduced was made ona demand note in July 1929and demand for payment was made on Feb. 1931 Perskin then showed by the records that the $15,000, the sum which Dlugasch said the loan had been reduced was notes receivable series of notes for $700 each. some of which have not yet been paid. Actually, therefore, Dlugasch owes the bank $192,104.60, he mitted. NO INVESTIGATION MADE Simon Gasner, of 805 St. Marks avenue, another director of the Municipal Bank & Trust Company, testified was "informally" decided that the merger should be effected because Samuel Barnett, president of the Municipal Bank, was ill, and "there was no responsible person to run the bank." Gasner admitted under questioning that no attempt was made, before the was voted, to ascertain whether the condition of the bank of United States was correct; that no examination was made learn the physical assets or liabilities of the bank, and that the directors did not know whether there were any "frozen' assets. Immediate trial of Isidor J. Kresel, magistrates and four of his for their part in the crash of the Bank of United was expected to-day, as District Attorney Crain prepared to before Judge Charles Nott, the Court General Sessions and make motion for selection of special panel 100 talesmen from which to pick Mr. Crain's action, which came as surprise. because was thought and Max D. Steuer, special prosecutor, had tacit agreement not to start the trials until next month, was interpreted as gesture directed Samuel Seabury, has been appointed by Governor Roosevelt investigate charges against the attorney. Recent ports had Mr. Seabury preparing investigate Mr. Kresel's indictment, construed in some parts consclous blow the inquiry into magistrates' courts.