Charles Mitchell Testifies Before Pecora Commission, Resigns in Disgrace

Charles E. Mitchell, chairman of National City Bank (predecessor to Citigroup), began testimony before the Senate Banking Committee’s Pecora investigation after receiving a subpoena on January 24, 1933. Under Ferdinand Pecora’s meticulous questioning, Mitchell confessed that his 1929 income totaled $1,206,195.02 in salary and bonuses, yet he had avoided paying income taxes by selling National City stock to a family member at an artificial loss. The committee scrutinized National City Bank’s securities activities through its affiliate, National City Company, revealing systematic conflicts of interest including underwriting unsound securities to pay off bad bank loans. Mitchell admitted to unethical personal financial dealings that, while not illegal at the time, shocked the American public suffering through the Great Depression. On February 26, 1933, Mitchell resigned as chairman of National City Bank and director of National City Company. The board accepted his resignation on February 27. Mitchell returned for additional testimony on June 6-7, 1933. The revelations destroyed Mitchell’s reputation and exemplified the corrupt practices that had precipitated the financial crash. The spectacle of a powerful banker forced to publicly account for exploiting his position galvanized support for banking reform and demonstrated that financial elites could be held accountable for their actions.