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Dave P.

Jul 4, 2021, 3:46:10 PM7/4/21
Lehman Brothers Holdings Inc. was a global financial svcs
firm founded in 1847. Before filing for bankruptcy in 2008,
Lehman was the 4th-largest investment bank in the US
(behind Goldman Sachs, Morgan Stanley, & Merrill Lynch),
with about 25,000 employees worldwide. It was doing biz in
investment banking, equity & fixed-income sales & trading
(esp. US Treasury securities), research, investment
management, private equity, & private banking.

In 1844, 23-year-old Henry Lehman, the son of a Jewish
cattle merchant, emigrated to the US from Rimpar, Bavaria.
He settled in Montgomery, Alabama, where he opened a dry-
goods store, "H. Lehman". In 1847, following the arrival
of his brother Emanuel Lehman, the firm became "H. Lehman &
Bro." With the arrival of their youngest brother, Mayer
Lehman, in 1850, the firm changed its name again & "Lehman
Brothers" was founded.

During the 1850s, cotton was one of the most important crops
in the US, & was Alabama's highest-grossing cash crop. Until
the Civil War, nearly all U.S. cotton was produced by slave
labor, & by the 1860 census, slaves constituted nearly 45%
of Alabama's total population.

Capitalizing on cotton's high market value, the 3 brothers
began to routinely accept raw cotton from slave plantations
as payment for merchandise, eventually beginning a 2nd biz
trading in cotton. Within a few years this business grew to
become the most significant part of their operation.
Following Henry's death from yellow fever in 1855, the
remaining brothers continued to focus on their
commodities-trading/brokerage operations.

The Lehman brothers, slave owners, were Confederate Army
volunteers who grew their wealth profiteering during the
Civil War, subverting the cotton blockade, buying cotton at
a depressed price in the Confederacy & selling it overseas
at a premium.

By 1858, the center of cotton trading had shifted from the
South to New York City, where factors & commission houses
were based. Lehman opened its first branch office at
119 Liberty St., & 32-year-old Emanuel relocated there to
run the office. In 1862, facing difficulties as a result of
the Civil War, the firm teamed up with a cotton merchant
named John Durr to form Lehman, Durr & Co. Following the
war the company helped finance Alabama's reconstruction.
The firm's HQ were eventually moved to New York City, where
it helped found the NY Cotton Exchange in 1870, commodifying
the slave crop; Emanuel sat on the board of governors until
1884. The firm also dealt in the emerging market for
railroad bonds & entered the financial-advisory business.

Lehman became a member of the Coffee Exchange as early as
1883 and finally the NY Stock Exchange in 1887. In 1899,
it underwrote its first public offering, the preferred and
common stock of the International Steam Pump Co.

Despite the offering of Int'l Steam, the firm's real shift
from being a commodities house to a house of issue did not
begin until 1906. In that year, under Emanuel's son Philip
Lehman, the firm partnered with Goldman, Sachs & Co., to
bring the General Cigar Co. to market, followed closely
by Sears, Roebuck & Co. Among these were F.W. Woolworth Co,
May Dept Stores Co, Gimbel Bros, R.H. Macy & Co, Studebaker
Corp, B.F. Goodrich Co., & Endicott Johnson Corp.

Following Philip Lehman's retirement in 1925, his son
Robert "Bobbie" Lehman took over as head of the firm.
During Bobbie's tenure, the company weathered the capital
crisis of the Great Depression by focusing on venture capital
while the equities market recovered.

In 1924, John M. Hancock became the first non-family member
to join the firm, followed by Monroe Gutman & Paul Mazur,
who became partners in 1927. By 1928, the firm had moved
to its One William St. location.

In the 30s, Lehman underwrote the initial public offering
of the first TV manufacturer, DuMont Labs, and helped fund
the Radio Corp of America (RCA). It also helped finance the
rapidly growing oil industry, including the companies Halli-
burton & Kerr-McGee. In the 50s, Lehman underwrote the IPO
of Digital Equipment Corp. Later, it arranged the
acquisition of Digital by Compaq.
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