Federal judge explores Detroit banking crises that unfolded in 1933
By Tom Kirvan
Legal News
For a jurist who has made his share of legal history during a storied 38-year career on the bench, U.S. District Judge Avern Cohn – fittingly enough – has been a lifelong student of the subject.
His current interest in “The Detroit Banking Crises of 1933,” which serves as the title of a treatise he has written on the Depression-era financial meltdown, stems in part on a vivid childhood memory of his.
“I remember when the banks closed in 1933, I was 9 years old and my mother was in tears, crying that she wouldn’t be able to get to her money,” recalled Cohn, who grew up in the Russell Woods neighborhood of Detroit. “It was one of the big shocks of the time.”
The Detroit banking troubles, which engulfed the First National Bank of Detroit and the Guardian Bank of Commerce, spawned a grand jury investigation to determine if “management misbehavior was behind the insolvencies,” according to Judge Cohn. A one-man grand jury was “appointed on petition of the Michigan Attorney General, Patrick H. O’Brien, to examine the management of the two failed banks,” Cohn wrote.
The choice as grand juror was Harry B. Keidan, then-chief judge of the Wayne County Circuit Court. Coincidentally, Keidan and the Cohn family attended the same synagogue.
“As a kid, I sat four rows behind him,” said Cohn, whose father, Irwin, was a prominent Detroit attorney and one of the principals in the renowned firm of Honigman, Miller, Schwartz & Cohn.
Keidan, whose investigation would absolve the management of banks of any legal wrongdoing, died in 1943, a decade after his grand jury service. His presence, however, is still felt in the 3rd Circuit Court of Wayne County today, according to Robert Colombo Jr., the current chief judge of the Detroit-based court.
In a recent e-mail to Cohn, Chief Judge Colombo told of an effort to restore Keidan’s legacy in a pictorial sense.
“When I discovered around September 2016 that the Building Authority for the CAYMC (Coleman A. Young Municipal Center) had Judge Keidan’s portrait in storage, I went to inspect it,” Colombo wrote. “It was in very poor shape. The Building Authority and the Court agreed to have it sent out and repaired.”
The restoration project cost $5,600 with the Building Authority picking up the bulk of the expense, Colombo indicated. The portrait now hangs in Judge David Groner’s courtroom at the Coleman A. Young Municipal Center.
Keidan’s role in sorting out the facts surrounding the banking crises is the subject of scholarly debate, as noted in the book “Breaking the Banks in Motor City,” a 170-page overview written in 2009 by Darwyn H. Lumley, a past president of the Society of Automotive Historians. Yet, however history judges his work, Keidan was, according to a Detroit News headline of the day, “Fitted by Experience For Job,” which only hinted at the difficulty of the task he faced.
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