This book is based on my dissertation at the University of South Carolina. In 1983, when I started this research project, the topic seemed primarily of historical and academic interest, as one episode in financial history that has often been cited but never really investigated. At that time, banking crises, supervisory failures, and similar financial problems were not making the headlines of the press – not yet. As my work progressed, the shape of the financial world changed quite dramatically, especially so – but not exclusively – in the United States. Many of the problems that were central to the crisis of the Credit-Anstalt in 1931 suddenly reappeared in the world of present-day finance, haunting banks and their supervisors and endangering the stability of the financial system. Although some of the underlying reasons for the present banking troubles might be quite different from those of the 1930s, others are rather similar. Since some of the mistakes committed in the 1980s are the same as those of sixty years ago, a look back to the financial crisis as it unfolded in 1931 seems warranted and instructive. This is what the present book tries to do by focusing on the causes and consequences of history's biggest bank collapse.

This book could have never been finished without the help and assistance of several people and institutions. I owe a special debt to Michael D. Bordo for his encouragement and his many useful suggestions.