Charles E. Mitchell
Encyclopedia
Charles Edwin Mitchell was an American banker whose incautious securities policies facilitated the speculation
which led to the Crash of 1929. National City Bank's (now Citibank
) abuses under his leadership brought an end to ownership of investment affiliates by commercial banks.
, where his father, George E. Mitchell, worked for a produce dealer and served as mayor
from 1887 until 1888. Mitchell graduated from Amherst College
in 1899, after which he got a job with the Western Electric Company in Chicago. In 1903, he became assistant to its president. After 3 years he left the firm and moved to New York City
, where he became assistant to the president of The Trust Company of America. Between 1911 and 1916, he ran his own investment house, C. E. Mitchell & Company. In 1916, he became vice-president of National City Company, which he reorganized into a private investment banking firm. Shortly after he relocated to Tuxedo Park
, NY.
Nicknamed "Sunshine Charley", Mitchell was elected president of National City Bank (now Citibank
) in 1921, and in 1929 was appointed chairman. Also in 1921, he was elected president of National City Company, which became the largest security issuing entity in the world. Under his leadership, the bank expanded rapidly and by 1930 had 100 branches in 23 countries outside the United States. His salesmen sold millions of shares in the bank totaling $650 million, much of which would be lost in the Crash of 1929. Indeed, while the Federal Reserve Bank
was attempting to curb speculation earlier in 1929, Mitchell flaunted a $25 million advance to traders.
Mitchell remained chairman until 1933, when he was arrested and indicted for tax evasion by then Assistant U.S. Attorney Thomas E. Dewey. Defended by attorney Max Steuer
, he was found not guilty of all criminal charges, but the government won a million dollar civil settlement against him. In 1933, the Senate's
Pecora Commission
investigated Mitchell as its first witness for his part in tens of millions dollars in losses, excessive pay and tax avoidance. In November 1929, Senator
Carter Glass
said of him, "Mitchell more than any 50 men is responsible for this stock crash."
Mitchell made a comeback and died a respected Wall Street banker, leaving his heirs a fortune. His townhouse on Fifth Avenue, built for him by Walker & Gillette
in 1926, with a rusticated facade
in the manner of a 16th-century Roman palazzo, now houses the French consulate.
Speculation
In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum...
which led to the Crash of 1929. National City Bank's (now Citibank
Citibank
Citibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...
) abuses under his leadership brought an end to ownership of investment affiliates by commercial banks.
Biography
Mitchell was born in Chelsea, MassachusettsChelsea, Massachusetts
Chelsea is a city in Suffolk County, Massachusetts, United States directly across the Mystic River from the city of Boston. It is the smallest city in Massachusetts in land area, and the 26th most densely populated incorporated place in the country.-History:...
, where his father, George E. Mitchell, worked for a produce dealer and served as mayor
Mayor
In many countries, a Mayor is the highest ranking officer in the municipal government of a town or a large urban city....
from 1887 until 1888. Mitchell graduated from Amherst College
Amherst College
Amherst College is a private liberal arts college located in Amherst, Massachusetts, United States. Amherst is an exclusively undergraduate four-year institution and enrolled 1,744 students in the fall of 2009...
in 1899, after which he got a job with the Western Electric Company in Chicago. In 1903, he became assistant to its president. After 3 years he left the firm and moved to New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, where he became assistant to the president of The Trust Company of America. Between 1911 and 1916, he ran his own investment house, C. E. Mitchell & Company. In 1916, he became vice-president of National City Company, which he reorganized into a private investment banking firm. Shortly after he relocated to Tuxedo Park
Tuxedo Park
Tuxedo Park may refer to:*Tuxedo Park, Missouri, a community now merged with Webster Groves, Missouri*Tuxedo Park, New York, U.S.**Tuxedo Park , listed on the National Register of Historic Places in Orange County, New York...
, NY.
Nicknamed "Sunshine Charley", Mitchell was elected president of National City Bank (now Citibank
Citibank
Citibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...
) in 1921, and in 1929 was appointed chairman. Also in 1921, he was elected president of National City Company, which became the largest security issuing entity in the world. Under his leadership, the bank expanded rapidly and by 1930 had 100 branches in 23 countries outside the United States. His salesmen sold millions of shares in the bank totaling $650 million, much of which would be lost in the Crash of 1929. Indeed, while the Federal Reserve Bank
Federal Reserve Bank
The twelve Federal Reserve Banks form a major part of the Federal Reserve System, the central banking system of the United States. The twelve federal reserve banks together divide the nation into twelve Federal Reserve Districts, the twelve banking districts created by the Federal Reserve Act of...
was attempting to curb speculation earlier in 1929, Mitchell flaunted a $25 million advance to traders.
Mitchell remained chairman until 1933, when he was arrested and indicted for tax evasion by then Assistant U.S. Attorney Thomas E. Dewey. Defended by attorney Max Steuer
Max Steuer
Max David Steuer was one of the most effective American trial attorneys in the first half of the 20th century.-Personal life:Steuer was born on September 16, 1870 , in the town of Homino, then in Austria-Hungary . In 1876 he arrived in the United States with his father and mother. He attended the...
, he was found not guilty of all criminal charges, but the government won a million dollar civil settlement against him. In 1933, the Senate's
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
Pecora Commission
Pecora Commission
The Pecora Investigation was an inquiry begun on March 4, 1932 by the United States Senate Committee on Banking and Currency to investigate the causes of the Wall Street Crash of 1929...
investigated Mitchell as its first witness for his part in tens of millions dollars in losses, excessive pay and tax avoidance. In November 1929, Senator
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
Carter Glass
Carter Glass
Carter Glass was a newspaper publisher and politician from Lynchburg, Virginia. He served many years in Congress as a member of the Democratic Party. As House co-sponsor, he played a central role in the development of the 1913 Glass-Owen Act that created the Federal Reserve System. Glass...
said of him, "Mitchell more than any 50 men is responsible for this stock crash."
Mitchell made a comeback and died a respected Wall Street banker, leaving his heirs a fortune. His townhouse on Fifth Avenue, built for him by Walker & Gillette
Walker & Gillette
Walker & Gillette was an architectural firm based in New York City, the partnership of A. Stewart Walker and Leon N. Gillette , active from 1906 through 1945.- Biography :...
in 1926, with a rusticated facade
Rustication (architecture)
thumb|upright|Two different styles of rustication in the [[Palazzo Medici-Riccardi]] in [[Florence]].In classical architecture rustication is an architectural feature that contrasts in texture with the smoothly finished, squared block masonry surfaces called ashlar...
in the manner of a 16th-century Roman palazzo, now houses the French consulate.