Lehman Brothers
Henry Lehman, an immigrant from Germany, arrived in Montgomery, Alabama, in 1844, and established a small store selling dry goods and utensils to local cotton farmers. By 1850, his brothers, Emanuel and Mayer, joined him in this enterprise and named the business Lehman Brothers. Following Henry Meyer’s death in 1855, Emanuel and Mayer headed the business for the following four decades. During this time, only family members (sons, brothers and cousins) were permitted to join as partners, a policy that continued until the 1920s.
Lehman Brothers evolved from a general merchandising business to a commodities broker that bought and sold cotton to planters in and around the Montgomery area. A New York office was established in 1858, and established a stronger presence for the firm in the commodities trading business as well as a foothold in the financial arena. Following the American Civil War and the ensuing hardships faced by the economy in the South, Lehman Brothers rebuilt, concentrating its energies on the New York office.
1870 saw Lehman Brothers establish the New York Cotton Exchange, the first commodities futures trading venture. Mayer was then appointed to the first board of directors. At this time, the business also helped in the formation of the Coffee Exchange and the Petroleum Exchange, as well as financing many railroads across the United States. In 1887, Lehman Brothers joined the New York Stock Exchange, marking its transformation from a commodities business to a merchant banking firm. During this time, the business was becoming more involved in financial advisory services.
From 1906 to 1926, the business was also involved in funding the emerging retail industry through a partnership between Philip Lehman (Emanuel’s son) and Henry Goldman (the then dominant partner of Goldman Sachs). During this period, the two firms underwrote some of the most prominent names in U.S. retailing, including Sears, Roebuck and Co and R.H.Macy and Co. Philip’s son, Robert Lehman, became a partner during the 20s, and led the firm from 1925 until his death in 1969. Lehman Brothers became an early backer of many diverse industries, from entertainment (helping fund Paramount Pictures, 20th Century Fox, and the Radio Corporation of America) to oil and gas (financing the TransCanada pipeline and supporting the development of Kerr-McGee’s gas and oil explorations, amongst others). In the 1960s, Lehman Brothers was officially designated as an official dealer for the U.S.Treasury. In 1977, it merged with the investment bank Kuhn, Loeb and Co. 1984 saw the firm’s acquisition by American Express, who merged it with their retail brokerage age, Shearson, to form Shearson Lehman Brothers. In 1993, Lehman Brothers was spun off and became known solely as Lehman Brothers again.
2000 marked the firm’s 150th anniversary. Following the subprime mortgage crisis of 2008, the firm filed for Chapter 11 bankruptcy. Barclays acquired the North American businesses of Lehman Brothers in 2008 and were subsequently integrated into the Wealth and Investment Management cluster of Barclays Group.
No records of this bank have come to Group Archives; however, many records relating to Lehman Brothers can be found in Harvard Business School’s Baker Library (link opens in new window). Further records can be found at Columbia University, which holds the Herbert H. Lehman Suite and Papers (link opens in new window).