The next time you go to a Penguins game, take a stroll up Fifth Avenue until you find the old Merchants Savings & Trust Company. Beside its two big, bronze signs, you’ll find a smaller plaque quoting the Sept. 24, 1931 edition of the Pittsburgh Press.
The plaque reads: “The Merchants Savings & Trust Company failed to open for business today. I. C. Swigert, state bank examiner, took over the bank at 1410 Fifth Avenue to protect depositors, he announced. While a few days ago the bank was believed able to continue business, continual withdrawals since closing of three other Pittsburgh banks Monday caused today’s action. The bank has 2,000 accounts.”
The Rauh Jewish History Program & Archives recently acquired a letter bearing the same date as the plaque and concerning the same subject. “I didn’t expect to be writing again quite so soon or to have to give you more bad news,” Elsie Goldberg wrote to her little sister, Sylvia, in New York. “The Merchants bank closed down today. You can imagine what a blow it was to Papa. He came home sick and cried like a baby. Momma has been carrying on also. You can’t blame either. Papa has been working for that bank for 30 years and had $50,000 invested in stock, all of which is completely lost.”
“Papa” was Abram Goldberg, who had immigrated to Western Pennsylvania from present-day Belarus in 1891 as a teenager. He peddled around the region before opening Washington Hosiery on lower Fifth Avenue about 1907. He sold the business in 1926 to become a full-time financial investor and invested heavily in Merchants Savings & Trust.
Goldberg was one of hundreds of Jewish wholesalers and businessmen who occupied that stretch of “the Avenue” in Uptown throughout the first half of the 20th century. Cash flow could be challenging for wholesalers. Factories released new lines each spring and fall. Wholesalers placed their initial orders before making any sales.
Merchants Savings & Trust was founded in 1902 and quickly vied for this business. The bank appointed three Jewish merchants to its initial 15-member board: dry goods dealer Jacob Bernstein; shoe wholesaler James Cohen; and liquor retailer Herman Obernauer. (Our archive has materials on both Cohen and Obernauer.) The bank also employed Jewish professionals, including its first real estate broker, H.M. Berman.
Merchants Savings & Trust regularly advertised in the Jewish Criterion and explicitly sought Jewish patronage from both individuals and organizations. Its appeals worked. The bank was the trustee for a bond issued in 1922 to help Kether Torah Congregation pay the contractor of its synagogue on Webster Street in the Hill District.
The bank also supported Jewish communal activities. It donated $200 (almost $3,000 today) to the Jewish Relief Fund in 1922. In early 1931, it contributed to a campaign to pay for more Jewish educational articles published in the Jewish Criterion.
The run on Merchants Savings & Trust was part of a panic among smaller Pittsburgh banks in September 1931. That month, 84 percent of deposits from suspended banks in the Cleveland District of the Federal Reserve came from Pittsburgh, according to historian Elmus Wicker.
Similar panics hit Chicago and Philadelphia in September and October 1931 and followed a series of regional banking crises during the previous year.
Experts disagree on the role regional banking panics played in exacerbating the Great Depression. But bank runs became an iconic feature of the time, a symbol of the economic uncertainty that spread all over the world. A letter like the one Elsie Goldberg sent to her little sister helps bring the global crisis down to an immediate human scale.
It is unclear what impact the Pittsburgh banking panic of 1931 had on the health of Fifth Avenue. The number of businesses in the district fell by one third between 1934 and 1940, but slow-paying customers could have been as much to blame as ailing financial institutions.
Merchants Savings & Trust spent years repaying its depositors and never reopened. Competitors such as the Washington Trust Co. served Fifth Avenue going forward and also found success by understanding the communal aspects of banking. PJC
Eric Lidji is director of the Rauh Jewish History Program & Archives at the Heinz History Center. He can be reached at 412-454-6406 or email@example.com.