1929: Inside the Greatest Crash in Wall Street History--and How It Shattered a Nation - 46

After nearly six weeks of testimony, the jurors in the United States v. Charles Mitchell case made their way to the jury room. It was 11:25 a.m. on June 21, and deliberations were about to begin.

Along with about a hundred spectators, Mitchell and Steuer remained in the dimly lit courtroom, restlessly waiting for any hint of when the verdict might come. Mitchell occasionally left the courtroom to pace the marble-floored corridors, puffing on cigarettes. His nervous energy and anxiety had ruined his appetite. His weight had dropped from 180 pounds to 156. He looked gaunt and unsteady.

There was little indication of which way the jury was leaning. Observers were almost evenly split about whether the prosecutors had proven their case. Many of Mitchell’s friends who had gathered daily to watch the trial were preparing themselves for a guilty verdict.

By 10:30 p.m. that evening, with no decision reached yet, the judge sent the jury, under guard, to Hotel McAlpin on Broadway and Thirty-Third Street in the middle of Herald Square. Mitchell went home to contemplate his fate.

The next day, the jury returned to the jury room at 8:58 a.m., escorted by two U.S. marshals.

At about noon, the foreman sent a question to the judge, providing the first glimpse of what the jury might be thinking. Some jurors wanted to know how far they should “submerge” their personal opinions in order to reach a unanimous verdict.

What exactly were they asking? Were they suggesting that some jurors did not like Mitchell?

This appeared to be an ominous sign for Mitchell.

The jurors emerged from the jury room on the third floor of the federal courthouse to hear the judge’s reply.

Judge Goddard instructed them that their private views should not preclude them from listening with open minds to their fellow jurors.

The jurors again left the courtroom, and when the judge called a recess for lunch, many of the spectators left to find a place to eat. The prevailing view was that the deliberations could go on for days.

Suddenly, however, the twelve members of the jury returned, some with their hats in hand.

“ It must be a conviction!” some spectators whispered excitedly.

A reporter for one of the evening papers rearranged his notes, with plans to race out of the courthouse the moment the verdict was read to get the story to his editors. He placed a page on top that read: “Mitchell—convicted.”

Everyone hurried back into the courtroom, stunned by the speed with which everything was happening. Spectators pressed against the doors, shouting and jostling for seats.

Judge Goddard made his way to the bench.

“All rise. All rise!” the clerk called out.

Mitchell stood, looking haggard, staring into the eyes of the jurors, darting from one to the other, hoping to ascertain his fate.

“ Gentlemen, have you reached a verdict?” the clerk asked.

Mitchell strained to hear the foreman.

“On both counts in the indictment, we find the defendant Charles E. Mitchell,” the foreman said in a soft voice, with an almost purposeful pause for effect as Mitchell stared directly at the judge. “Not guilty.”

Mitchell leaped to his feet, almost losing his balance, his face flushed red, a smile emerging as he started to cry, weeping with joy. He was free. The months of headlines, of sleepless nights, of contemplating prison, were over.

Stepping past the defense table, he made his way to the jury box to shake their hands as if they were his customers. “ Thank you, sir, thank you, sir…” Then he returned to the defense table, where Steuer was still standing. Placing an arm around his shoulder, he whispered, “ Thanks, Max, thanks.”

Medalie, the U.S. attorney, sat at the prosecutors’ table in a state of bafflement.

In the hallway, Mitchell was peppered with questions from reporters. In a trembling voice he said, “ I can’t say anything now. I’m too moved.”

Steuer moved in front of the scrum of reporters. “ This verdict proves that in the State of New York justice can still be had by the verdict of a jury,” he proclaimed. “That neither mob psychology nor emotion will enter the final determination. Mr. Mitchell was absolutely innocent of the accusations made against him as a result of what was deemed popular demand.”

The prosecution team remained in shock. Medalie announced he was going away for “a rest.” Attorney General Homer Cummings, appalled by the verdict, said, “Nevertheless I still believe in the jury system.”

In the end, Steuer had been able to convince the jury that Mitchell had followed the advice of lawyers, utilizing practices like wash sales that were fully legal, however unseemly. “ Conviction would have branded one of America’s leading bankers a criminal for having done exactly what hundreds of other men were doing at the time,” the Muskegon Chronicle wrote, contending that the legal advice Mitchell had relied on “was bad, but that does not constitute a crime.” Mitchell, still shaking with relief and adrenaline after the verdict, walked to the Bankers Club on Broadway for a celebratory lunch with his attorney and friends. They then walked all the way uptown to his home on Fifth Avenue, serenaded by hundreds of supporters yelling, “Hurrah for Charlie Mitchell!”

He was greeted at home by Elizabeth, where friends gathered to celebrate. Mitchell’s victory was a kind of salvation—a fleeting absolution from the political and economic forces that demanded a reckoning in the aftermath of the crash.

To much of the country, Mitchell’s acquittal landed not as relief but as a provocation to a wounded and disillusioned public. That Sunday, Reverend F. Marion Smith gave a sermon at his small church in Springfield, Massachusetts, trying to provide some moral guidance to his congregation about the headlines they had read about Mitchell’s acquittal. The title of his sermon was “Moral people who burlesque morality are the worst enemies of our modern morals.”

Capturing the mood of the country, he spoke these words: “Charles Mitchell could not be found guilty, according to the letter of the law, but an outraged public sentiment will not excuse him for lack of moral judgment and business ethics.”

He told his congregants, “The people of our day need a keener sense of moral direction to keep them from drifting,” decrying the oft-cited explanation “Most everybody does it, therefore it must be all right.”

The reverend, a slender man who spoke deliberately, concluded with a message: “Many of us achieve self-approval by cheap and superficial methods, concocting clever excuses to make what we want to do seem admirable,” he said, “so that we can condone our actions and like ourselves.”