For one thing, Cagney's brilliant performance as Rocky won him his first major film award - the 1938 New York Film Critics Award for best actor. It is frequently forgotten that Cagney won this award four years before his Oscar winner in "Yankee Doodle Dandy", but in actuality the performance was the high point of the work he did (up to that time) as a gangster (his performances in "White Heat" and "Love Me Or Leave Me" were way in the future). It drives home how much of a struggle it was for Cagney to get out of the gangster mode, and why his George M. Cohan was such a striking change for his fans.
Secondly it was the sequel (the first sequel) of the Bowery Boy feature films after their introduction in "Dead End". Oddly enough, in that film, Humphrey Bogart was the out and out gangster "Baby Face" Martin, who was the villain in the film. Baby Face enjoyed his following with the gang of boys in that film. Here, though, Bogart was playing a weaselly lawyer named Jim Frazier, who is cowardly - quite a different type from Baby Face, who is angry at the state of his world and how ugly it has become. But Baby Face, at least, had guts.
The Bowery Boys are again a gang of street kids, who Father Jerry Connelly (Pat O'Brien) is trying to keep on the straight and narrow. Here, however, they worship Rocky, the local punk who did rise in the underworld and made a name for himself. But Rocky is Jerry's oldest friend, and he is also willing to help the priest with the boys.
The story deals with how Bogart and his new boss, Mac Keefer (the unjustly forgotten George Bancroft) have gotten control of over 100,000 dollars (1930 style dollars - about twenty million in buying power today), that belongs to Cagney. Cagney wants it back, and when Bogart and Bancroft keep putting him off he uses strong arm methods to force them into line. Eventually things blow up, and Cagney ends up in a gun battle that leaves a dead cop. He is tried and found guilty for this murder, and goes to the death house. This leads to one of the most frightening moments in Cagney's film career - when we see his final moments when being taken to the electric chair to be strapped in. I guarantee once seen you will never forget it.
There are one or two interesting points of a historical nature about Cagney's performance as Rocky. First, that massive gun battle that is shown (where he kills the cop and battles the police department from a building. It actually happened! In about 1931 there was an incident in Manhattan when a young hood, "Two Gun" Crowley, held off police after a homicide in a battle that lasted nearly an entire afternoon. Crowley (like Rocky) was defeated by tear gas. Like Rocky, he too died in the electric chair.
It has been pointed out that Cagney based some of Rocky's mannerisms on a drug addict character he knew in his old Hell's Gate/Yorkville area when he was a kid. Cagney mentions this in his memoir CAGNEY. But there is a curious second source. In his youth, Jimmy Cagney came from a family that struggled but managed to have food on the table and clothes on their back. But some of his playmates were not so lucky. One was a fellow nicknamed "Bootah" (because of the oversize boots he was forced to wear) whose real name was Peter Heslin. Cagney always was friendly with Peter, but their lives drifted apart. On April 5, 1926, Heslin was engaged in an armed robbery when an off-duty police officer, Charles H. Reilly, tried to stop him and was shot and killed. But Heslin (who was also wounded in the encounter) was captured shortly afterward. He was tried and convicted, and finally executed on July 21, 1927. That same night, a star was born on Broadway where Jimmy Cagney made a name for himself as a singer and dancer in the show "Broadway". Cagney was aware of the tragedy playing out with his friend at Sing Sing that night. He mentions Bootah's execution in his memoirs. Newspaper accounts of Heslin's electrocution do not mention anything unusual, but one wonders if (when Cagney was doing the scene) he thought of his unfortunate friend and added a bit more power to those last moments of the film.