by Sam Roberts
Growing up in Coney Island, the novelist Joseph Heller inherited a legacy of local lore, which he wrote about in his biography in 1998:
We learned early on that a boiled frankfurter anywhere is not as good as one broiled on a grill to the point of splitting—you only had to ingest a boiled one in a stadium at a professional baseball game to know you were tasting only hot water and mustard; that the Wonder Wheel with its rolling, swaying gondolas, which is one of the two mechanical attractions from our antiquity still in operation, was obviously superior to George C. Tilyou’s Ferris wheel in Steeplechase Park, but that both were for sightseeing squares or for adults with children who were squares and still too young to be exposed to the terror of anything but height; that the Cyclone, which is the second old-timer still extant, was far and away the best of all roller coasters; and that it was futile to search anywhere in the universe for a tastier potato knish than Shatzkin’s when they were still made by hand by old women who were relatives or friends of the family.
By the late 1930s, Robert Moses, the city’s parks impresario, was advising Mayor Fiorello La Guardia that “there is no use bemoaning the end of the old Coney Island fabled in song and story” and that the city should instead exorcise the ghosts of anachronistic carnivals and replace the weed-strewn lots and derelict rides and bathhouses with a massive urban renewal program. High-rise housing did, in fact, alter Coney Island’s century-old character, delivering middle-class families to beachfront apartments and low-income households to utilitarian publicly subsidized projects that stubbornly thwarted gentrification. Holocaust survivors flocked to Brighton Beach after World War II, and, later, Russian immigrants revitalized the run-down neighborhood into a booming Little Odessa.
Not even Robert Moses could kill Coney Island, though. The New York Aquarium was transplanted there in 1957 and was recently renovated and expanded. A seven-thousand-seat stadium (now MCU Park) for the New York Mets–affiliated Brooklyn Cyclones, a minor-league baseball team, opened in 2001 on the site of Steeplechase Park. The city has periodically repaired and rebuilt the boardwalk itself, most recently initiating a thirty-million-dollar reconstruction from 2009 to 2016, which included repairing the devastation from Hurricane Sandy in 2012. While iconic wooden planks remain between West Tenth and Fifteenth Streets, gone is much of the rest of the weather-worn wooden boardwalk, replaced with concrete paving and recycled plastic lumber (the wood timbers were salvaged and eclectically reincarnated by architects in projects ranging from the renovated Ruby’s Bar and Grill on the boardwalk to the entrance hall of the Cézanne-and-Picasso-filled Barnes Foundation museum in Philadelphia).
The boardwalk may no longer be wooden, but crowds still flock to Coney Island, where the beach and the hot dogs can’t be beat. (George Samoladas)
Coney Island remains an obligatory campaign stop for candidates in New York, and in 2018 the city officially declared it a scenic landmark. It wasn’t the first and isn’t the longest. But as Joseph Heller wrote, “Coney Island still presents a boardwalk that seemed then, and probably still does, the widest, and most splendid boardwalk in the whole world. It has a wide beach of fine sand its entire length, a beach that continues well beyond Coney Island into Brighton Beach and Manhattan Beach. One has only to stumble with shock and lacerated arches upon the shorefronts of Nice or the English Brighton—and remember with a sense of affront that these are also called beaches,” Heller wrote, “to begin to fully appreciate the spacious shorefront of Coney Island as a truly distinguished national treasure.”
22
BANK OF UNITED STATES
Its name could have fooled anyone—to paraphrase Bill Clinton, it depended on what the meaning of the word “the” is. (Bronx County Historical Society Collections)
Joke all you want about money laundering, but the modest, one-story Neoclassical limestone building at 1254 Southern Boulevard Street in the South Bronx that is now a faceless laundromat was originally a bank branch. What happened there on one otherwise unremarkable Wednesday morning put its depositors through the wringer.
Joseph S. Marcus had purchased the fifty-by-one-hundred-foot plot for his first branch in the Bronx, which, by the early 1920s, was billing itself as New York’s fastest-growing borough. Only two decades earlier, at the turn of the twentieth century, parts of Foxhurst (a community within the Crotona Park East section) still resembled the prim estate that had belonged to H. D. Tiffany, whose son-in-law was descended from George Fox, a seventeenth-century founder of the Quakers. But development proliferated. Old dairy farms were plowed under as immigrants and first-generation Americans fled Manhattan’s tenements for more affordable neighborhoods in other boroughs, made newly accessible by the subway. The IRT Second Avenue El station was conveniently located at the intersection of Freeman Street and Southern Boulevard. The bank opened beneath it in 1921, and within just a few years, business was so brisk that the branch expanded. Growth was abetted by the sixteen-hundred-seat Freeman Theater, featuring its lobby fish tank and indispensable Wurlitzer organ (“We sell tickets to theaters, not movies,” the motion picture pioneer Marcus Loew famously said), which made its debut just around the branch’s chamfered corner.
Joseph Marcus was born in Telz, Lithuania, left school when he was twelve to take a job, and, when he was seventeen, joined his parents in New York, where he started out in 1884 as a tailor on Canal Street. He also dabbled in real estate. In 1906, he bought several tenements on Orchard Street, including No. 107, which, when Delancey Street was widened, was transformed into a corner building. (In 1913, he would build his six-story bank headquarters around the corner, where it still stands at 77 Delancey.)
While he was buying real estate, he also decided to become a banker. He began by setting up a cashier’s desk in his clothing store at 102 Broadway and advertising in the Yiddish press. In 1906, he founded the Public Bank of New York and installed himself as its president. Six years later, he disposed of his interest in the Public, and in 1913 established the even more pretentiously named Bank of United States, with headquarters at Orchard and Delancey Streets. He wasn’t merely saving money on sign-painting. More likely, there were complaints that “the” too suggestively implied as an article of faith that the bank was officially a federal agency (the practice of using such canonical names was outlawed for financial institutions in 1926, but not retroactively). State Senator Henry W. Pollock, who chaired the Banking Committee in Albany, vouched for Marcus as a reputable banker and for the name as a redoubtable brand that would steer immigrants to a creditable bank. Marcus had cut corners but had not abridged too far. State banking superintendent George C. Van Tuyl hesitated, but ultimately agreed to go along and grant a charter if that one single word—“the”—was deleted from the name (just in case the remaining four words were too subtle, a picture of the U.S. Capitol was prominently displayed in the bank’s headquarters). In return, Pollock was named a vice president of the bank; Van Tuyl was elected a director.
The bank was first organized in the office of another director, Joshua Lionel Cowen, the namesake of the model train company and Marcus’s brother-in-law. Years later, Max Steuer, the lawyer who represented the bilked investors and account holders (and, earlier, the owners of the Triangle factory), suggested that Marcus and the others had deliberately chosen the name because of its ambiguity. Invoking the phrase, “As solid as the Bank of England,” Steuer grilled another director during one of many legal interrogations:
“The Government of the United States, since 1913, has been regarded as a pretty substantial sort of institution, hasn’t it?”
“Yes, it was.”
“And a person would be pretty safe, almost as safe in trusting his money with the Government of the United States as with the Government of Great Britain, wouldn’t he?”
“Yes.”
“And it never occurred to any of you gentlemen,” Steuer asked incredulously, “while that name was being thought over, that the bank, being located on Delancey Street, that those people seeing th
e name, Bank of United States, might be misled, that never occurred to any of you?”
When the first Bronx branch of the Bank of United States opened, Jewish immigrants were still surging into New York from eastern Europe, a flow that would abruptly slow to barely a trickle once the Johnson-Reed Act imposed strict quotas in 1924. (By 1950, an estimated 40 percent of all America’s Jews lived in the city, where they constituted about a quarter of the population, a share that later declined to about half that, but which has been rising again in recent years because of an influx from Russia and high birth rates among the Orthodox). Like other newcomers, Jews were assimilating. A few jobs and professions were more welcoming to them. Banking was not one of them.
Marcus’s bank “stood as a celebrated symbol of Jewish economic success” and “embodied immigrant faith in the promise of American life,” Beth S. Wenger wrote in New York Jews and the Great Depression (1996). “America’s banking industry offered few opportunities; even German Jews rarely attained high-ranking positions in U.S. banking, making the success of an immigrant endeavor particularly striking,” Wenger wrote. “The Bank of the United States grew into a thriving financial institution, carrying a name that boldly asserted that Jews belonged in America.” Marcus had begun modestly enough, with one hundred thousand dollars in capital. He promoted the new bank primarily in the Yiddish press, and drew his depositors and small-business borrowers mostly from among Jewish immigrants and the garment center. Five years after Joseph founded the bank, he ceded the presidency to his thirty-seven-year-old son, Bernard, who became one of the youngest bank presidents in the country. Compared with his father Bernard rapidly developed a reputation as a flamboyant Roaring Twenties risk-taker. By the time Joseph Marcus died in 1927, the bank’s assets had ballooned to one hundred million dollars, and Bernard had proudly transplanted its headquarters uptown to 320 Fifth Avenue, on the fringe of the garment shops and showrooms, a block south from where the Empire State Building would soon rise. Bank of United States still had only seven offices, though, including the branch in Foxhurst.
Bernard, joined by Saul Singer, a former two-dollar-a-week garment worker who had risen to head the National Cloak, Suit, and Shirt Manufacturers’ Protective Association, expanded the business exponentially. From its modest beginnings, Marcus wrote to shareholders in early 1930, “the Bank of United States has, within a period of 16 years, grown to a position of prominence among the greater banking institutions of the United States.” This was no idle boast. BUS, as it was known in shorthand, had become the biggest retail bank in New York. The number of branches had mushroomed to more than sixty all over the city. The bank boasted more than four hundred thousand depositors. While their accounts averaged a few hundred dollars each, for many of their customers that represented their life savings. On paper, at least, the bank’s assets totaled $300 million; deposits surpassed $250 million. Marcus boasted that the number of stockholders had more than doubled, from 8,500 to 18,500, by December 31, 1929. But while he cited that statistic as a vote of confidence in the bank’s credit, it would instead prove to be his undoing. BUS had loaned a third of its capital to its own officers and their relatives in order for them to buy stock in the bank, which it also peddled in an aggressive sales pitch to depositors in mid-1929. Moreover, the bank accompanied the appeal with what appeared to be a money-back guarantee: a promise to buy back the shares at their purchase price of $198 within a year.
A few months after the stock market crashed in October 1929, the share price had plunged to sixty dollars. In addition, due to merging with or buying a half dozen other banks in 1928 and 1929, BUS’s real estate investments had entangled the bank in a bewildering network of sister corporations. “Whenever they needed money for the enterprises in which they indulged,” the historian M. R. Werner wrote, “Marcus and Singer pulled corporations out of drawers and borrowed for them.” The officers of those phantom corporations were typically minor officials of the bank. Half of its loan portfolio was invested in real estate development, including the construction of luxury buildings like the Beresford and the San Remo on Central Park West, which was roaring in the twenties, but just a few years later was threatened with default. (One consequence of the default was that the bank was forced to settle its debt to HRH Construction by turning over four apartments at 15 West Eighty-First Street to the firm’s owners, which included Saul Ravitch, who raised his family, including his son, Richard, the developer and civic leader, there.)
The frenzied expansion was worrying state regulators, who were beginning to think that under the existing management, the bank was getting too big not to fail. Between October and December 1930, its cash reserves dropped by 20 percent, from $200 million to $160 million. On Monday, December 8, 1930, Cole Porter’s ribald musical satire The New Yorkers debuted at the B. S. Moss Broadway Theater, where audiences inhaled the lines (including the description of Park Avenue as “the street where bad women walk with good dogs” and the reflection that “there are only two kinds of girls: those who do and those who say they don’t.” The titles of two songs by Jimmy Durante would prove to be particularly apt: “Money” and “Sing Sing for Sing Sing.”) Earlier that day, another previously announced merger between the Bank of United States and several other financial institutions fizzled. Two days later, on December 10, an account holder confronted a teller at the Foxhurst branch and demanded to redeem his stock in the bank at his purchase price, as promised. When he was advised to retain it as a sound investment—or, rather, strongly discouraged from redeeming it—he left and, as the Times reported, “apparently spread a false report that the bank had refused to sell his stock.” A rumor went viral, at warp speed by 1930 standards, that the bank was reneging on its mid-1929 commitment. By midafternoon, the police estimated that as many as twenty-five thousand spectators had swarmed to the branch, where up to three thousand panicky depositors had already withdrawn more than two million dollars. Quick-thinking tellers persuaded several thousand people to leave their accounts untouched, but one man waited on line for two hours, and, finally past the great bronze torchieres flanking the front door, prudently removed all two dollars from his savings account. Bank officials, dispatching armored cars laden with cash to the branch in a last-ditch attempt to restock depleted supplies, promised that account holders who arrived before closing time would be paid in full.
That night, New York City’s biggest bankers gathered on the twelfth floor of the Federal Reserve Bank downtown. Their immediate goal was to stanch the hemorrhaging at the Bank of United States. But they were motivated more by self-interest than conscience, more concerned about insulating themselves from any taint of insolvency or a liquidity crisis and maintaining the integrity—“integrity” as in soundness, rather than morality, necessarily—of the New York Clearinghouse banks (which had banded together in the mid-nineteenth century to streamline transactions and stabilize the monetary system). The bankers figured it would take about thirty million dollars to get through the crisis. They all but agreed to pony up that much. They prepared a press release to reassure the public, which was growing more apprehensive with each hour of indecision. And then, after keeping Lieutenant Governor Herbert H. Lehman and Joseph A. Broderick, New York’s superintendent of banks, waiting past midnight, they sheepishly reported that several of their colleagues had balked: there would be no bailout for the Bank of United States, though in the past they had provided infusions for other wobbly financial institutions. Broderick was stunned. “I was afraid that it would be that spark that would ignite the whole city,” he said.
“I reminded them that only two or three weeks before they had rescued two of the largest private bankers of the city and had willingly put up the money needed,” he later recalled. “I asked them if their decision to drop the plan was still final. They told me it was. Then I warned them that they were making the most colossal mistake in the banking history of New York.” That morning, Broderick ordered Marcus not to reopen any of his branches. “The ruin of the Bank of The
United States,” the historian William E. Leuchtenburg wrote, “which held the life savings of thousands of recent immigrants, affected a third of the people of New York City and was the worst bank failure in the history of the republic.”
Max Steuer subjected the directors to withering interrogation about the risky loans and real estate investments that drove their financial institution to the brink of bankruptcy. Steuer asked one of the directors, John F. Gilchrist, the president of Consolidated Indemnity and Insurance Company (and a childhood friend of Governor Al Smith’s), “Now, what did you know of the building operations in which the Bank of United States was engaged?”
“Practically nothing,” Gilchrist replied.
“Mr. Gilchrist, I think you know that I do not want to be insulting or anything of that sort, but would it be fair to say that you knew practically nothing about the bank?”
“Personally,” Gilchrist asked and answered, “yes.”
That Steuer even asked the question was answer enough.
He confronted another director whose company had $100,000 on deposit with the bank when it went bust, but also $750,000 in outstanding loans.