The Dow took a nosedive yesterday. Colbert called it "Watership Dow." Drudge referred to it as a "Nightmare on Wall Street." And while I'm not sure whether to smile or grimace at the headlines (I have to commit to one, so I don't look A.D.D. about being bipolar), the news did give me reason to look up some corporate histories. Here's some dirt I pulled straight from Wikipedia. And unless this jokester's been messing with the entries, I'm guessing they're accurate.
There's no doubt that Charles Merrill was a genius. Not only did the Amherst and Michigan Law alum foresee the Great Depression (he divested many of his holdings before the crash), he also begged Calvin Coolidge- a fellow Amherst alum- to speak out against the stock market speculation. The Merrill Lynch group, which went through numerous name and line-up changes (Charles E. Merrill & Co., Merrill, Lynch & Co., Merrill Lynch, E. A. Pierce, and Cassatt, Merrill Lynch, Pierce, Fenner & Beane) made some of their first big money by investing in what would become RKO Pictures (in 1921), and in purchasing a controlling share of Safeway grocery stores in 1926.
A week ago, I would have thought Goldman Sachs was the gold standard in investment banking, but apparently, that hasn't always been the case. In fact, they got into quite a bit of trouble in the late 1920's. Founded in 1869 by Marcus Goldman, a Jewish immigrant from Germany, the company started off in the paper business. When Goldman's son-in-law joined the company it added the Sachs to the banner, and the company made it's first big money when it got into the Initial Public Offering game. They managed the Sears, Roebuck and Company IPO in 1906, the biggest to date. Apparently, things were humming for a while. They hired a ton of MBA's (giving more credence to the degree). Unfortunately, they severely marred their reputation when they offered a "closed end fund" to investors. It ended up working much like a Ponzi scheme, and the whole thing came to a head in the big stock market crash of '29. According to Wikipedia, it took years to fix the damage to the brand. In fact, it wasn't until 1956, when they managed the Ford Motor Company's IPO that they earned their reputation back.
Who knew that AIG started out in Shanghai? The company was the brainchild of Cornelius Vander Starr, a clever American who became the first Westerner to offer insurance to the Chinese. Wikipedia lists him as the son of a Dutch railroad engineer who started an ice cream business at 19, moved to California and sold car insurance while studying for the bar the next year, then took a job as a clerk for the Pacific Mail Steamship company where he (maybe) sorted mail and (definitely) found himself in Japan. In any case, he started AIG in 1919, sold insurance to other foreign markets once he'd established himself in Asia, and moved the company to New York City after the Communist Party took over in 1949.
Perhaps the strangest of the origins to me was that of Lehman Brothers. I'd always just assumed that the (formerly) prestigious firm was a New York institution, and had been started by Yankee elites in the last 60 or 70 years. Apparently, the story begins in Montgomery, Alabama! The 20-something Henry Lehman moved to southern state straight from Bavaria, and set up a dry-goods store. Slowly, Lehman's two brothers moved to the states, and joined him, and together they started realizing the value of cotton. They even began to accept cotton as payment in their store. When Henry passed away from Yellow Fever in 1855, the remaining brothers Lehman moved their operations to New York, where they continued to capitalize on the cotton market, teamed up with Goldman on his Sears IPO deal, and underwrote hundreds of gigantic IPO's- from Macy's to Woolworth's to Studebaker's to B.F. Goodrich's. Clearly, it's been an institution for for quite a while. The company stopped being a family-only firm in 1924, and they survived the Great Depression by making smart venture capital investments.
Special thanks to Bill Pearson for sparking the interest!