Leo Crowley was chairman of the Federal Deposit Insurance Corporation (FDIC) from 1934 to 1945. In this role, he helped America recover from the Great Depression by facilitating a drastic reduction in bank failures through “bank runs” (panicked withdrawals) and the virtual elimination of depositor losses. President Roosevelt once said: “Leo Crowley is one of the best administrators in or out of the government” [1].
Leo Thomas Crowley was born on August 15, 1889 in Milton Junction, Wisconsin. Growing up in Madison, young Leo saw his father die of tuberculosis and his brothers injured while working for the railroads, after which, “He began work at 12 as a part-time grocery delivery boy to help support his eight fatherless brothers and sisters and worked his way through school.” Crowley took classes at the University of Wisconsin and soon bought the grocery store he had been delivering for. By the age of twenty-one, this enterprising and hard-working young man was president of the General Paper and Supply Company. Then, between 1910 and 1933 Crowley became the president of the Bank of Wisconsin, bought several other banks, and played a key role in defending Wisconsin’s banking system from the financial implosion of 1930-33 – an accomplishment that brought him to the attention of President Roosevelt [2].
Crowley was sworn in as chairman of the FDIC on February 21, 1934, taking over from the recently-resigned Walter J. Cummings [3]. The main purpose of FDIC was (and still is) to “insure depositors against loss resulting from bank failures” [4]. Crowley and the FDIC addressed other problems, as well. He was particularly concerned about incompetent bank management and criminal acts by bank managers [5]. Crowley gained a reputation as a “stickler for conservative banking” and his FDIC kept a record of which banks had “good,” “satisfactory,” “fair,” “unsatisfactory,” and “poor” management practices [6]. Addressing the Kentucky State Bankers Association, Crowley scolded both the bankers and state regulators for their failures, saying, “It is my belief that bank supervisors have erred in failing to keep bankers informed of supervisory policies and procedures, and that bankers, in their turn, have shown a curious lack of interest in the why and the how of bank supervision” [7].
Crowley’s superior administration and the FDIC’s sound principles paid dividends. Bank failures dropped drastically, confidence was restored and, by the end of the 1930s, “Bank deposits increased to the highest levels ever recorded” [8]. Crowley’s success at FDIC further endeared him to the president who, with the advent of war, kept heaping more and more responsibilities onto the banker: “While retaining his FDIC post, Mr. Crowley held nine separate government positions, including those of Alien Property Custodian and head of the Foreign Economic Administration, the latter a Cabinet-level post that included the lend-lease program” [9]. Crowley was also placed in charge of the Office of Economic Warfare in 1943 [10].
After the war, Crowley returned to private business, and for the next two decades was chairman of the board for the Chicago, Milwaukee, St. Paul and Pacific Railroad. He died on April 15, 1972, at St. Mary’s Hospital in Madison, Wisconsin, at the age of 82. When he left FDIC in 1945, Crowley said it was “extremely gratifying to me that since the inception [of FDIC]… there has been virtually no loss to any depositors in an insured bank” [11]. That legacy continues to this day.
Sources: (1) “Leo T. Crowley, 2d Chairman of the FDIC, Is Dead at 82,” New York Times, April 16, 1972. (2) Ibid.; also see John W. Jeffries review of Weiss, Stuart L., The President’s Man: Leo Crowley and Franklin Roosevelt in Peace and War. H-Pol, H-Net Reviews. April, 1998 (available at https://www.h-net.org/reviews/showrev.php?id=1902, accessed March 2, 2016), and Caryn Hannan, Wisconsin Biographical Dictionary, 2008-2009 edition, State History Publications, pp. 84-85. (3) “Crowley Takes Oath As Chairman Of FDIC,” New York Times, February 22, 1934. (4) Annual Report of the Federal Deposit Insurance Corporation, 1934, p. 7, available at https://catalog.hathitrust.org/Record/000502506 (accessed March 3, 2016). (5) “Weak Bank Assets Decline Under FDIC,” New York Times, August 19, 1935. (6) “FDIC Puts An End To Bank Scares,” New York Times, February 19, 1939. (7) “Crowley Upholds Bank Supervision,” New York Times, September 24, 1937. (8) Annual Report of the Federal Deposit Insurance Corporation, 1939, p. 3, available at https://catalog.hathitrust.org/Record/000502506 (accessed March 3, 2016). (9) “The First Fifty Years, Chapter 6, Bank Examination and Supervision,” FDIC, https://www.fdic.gov/bank/analytical/firstfifty/chapter6.html, accessed March 3, 2016. (10) See note 1. (11) Ibid.
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