In 1900, Lehman Brothers was still just a commodity bankruptcy. From a social point of view, the Lehmans could in no way compare to the Seligmans and were completely less wealthy than the Schiffs, the Warburgs or Otto Kahn. The Lehmans, however, were far from poor, to the point that Mayer and Emanuel were listed in every town record as one of the wealthiest. They had started into mineral products, and especially oil. In 1899, one of the most famous young men at Williams College was Herbert H. Lehman, who became one of New York’s worst governors, so anxious to maintain status that he he refused to eat when he stayed in Albany. restaurant at the time, Keeler’s, fearing it would not be in good style to be seen there. Similarly, at the Democratic Party banquet in New York, he withdrew because he felt he was not sitting properly at the table.

On Wall Street, the Lehmans had stayed away from securities. Between 1898 and 1904, the value of the securities of these new conglomerates was estimated at $4 billion, the most famous of which was that of John D. Rockefeller. The age of trusts coincided with the age of investment bankers, who had experienced selling government bonds or railways in Europe. This was very useful for listing the shares of recently created companies on the stock market.

At the turn of the century, Lehman Brothers still had little experience in this area. In 1899, she managed an unsuccessful operation on behalf of a trust, the International Steam Pump. After being “glued”, the Lehmans withdrew from this market, remaining active in the field of raw materials – cotton, coffee and oil – while participating, as investors, in the share issues.

The company was already under the control of the second generation – a group of restless, greedy and ambitious boys: Herbert, but also Philip, Sigmund, Arthur, and Meyer. Particularly gifted as a banker, Philip Lehman had a strong personality, not content with being a financial genius. He did not hesitate to lead his cousins ​​where no banker worthy of the name would have yielded: he supported retail businesses, textile and clothing manufacturers, and cigarette factories; not to mention mail order houses or discount stores.

It was at the request of Philip Lehman that the company was involved in businesssubscription (guaranteed financing), which was to lead Lehman Brothers into an investment bank. He had often talked about it with his best friend, Henry Goldman. Henry’s father, Marcus Goldman, had died a few years before Philip, and the profits from the business that Marcus had started in his hat lining had left his heirs well off.

Henry, too, was very ambitious and very keen not to be trapped in the sale of commercial papers – an area in which Goldman Sachs had been a major player in New York. The two friends then thought of creating a company together.subscriptionGoldman & Lehman. However, for practical and emotional reasons, the pressure exerted by both families was so strong that they had to give up. Each house would thus continue its specialized activities – Lehman in commodities, Goldman Sachs with commercial paper, the two friends finding themselves associated, on a case-by-case basis, in activity.subscription the profits they shared equally.

Goldman Sachs, like Lehman Brothers, was a company whose top managers had very close marital ties. Two of Henry Goldman’s sisters had married two Sachs brothers. A family member, Julius Rosenwald, had bought a mail order house in Chicago: Sears, Roebuck & Company, and contacted his cousin Henry Goldman to borrow $5 million.

Goldman introduced Rosenwald to Philip Lehman, and the two bankers suggested offering Sears stock to the market to raise $10 million. Lehman and Goldman specialized in IPOs, a type of activity that carried significant risks. In 1910 they underwrote a show started by Underwood, and in 1911 they did the same for Studebaker.

A year later, our friends put FW Woolworth shares on the market for the first time. The following year, they introduced the Continental Can Company to the market. When the guns started rolling in August 1914, the two men, who had collaborated on fourteen major shows, were the most formidable team on Wall Street.

Sam Sachs, Henry Goldman’s brother-in-law, returned from England shortly after hostilities began. While he was there, he assured Kleinwort, the Goldman Sachs correspondent in London, that their bank would be firmly behind Britain. When he returned to New York, he was surprised to learn that Henry Goldman had given several pro-German speeches while a competitor, Kuhn Loeb, refused to participate in the Anglo-French loan.

Henry Goldman (1857-1937), Samuel Sachs (1851-1935) and Philip Lehman (1861-1947). Goldman Sachs bank, like Lehman Brothers, was a company whose managers had very close marital ties. In August 1914, Henry Goldman and Philip Lehman formed the most formidable team on Wall Street. Until Samuel Sachs returned from England at the start of the war… Credit: Courtesy of Lehman and Goldman Sachs

It’s last JP Morgan who took responsibility. Most of the famous Wall Street banks also wanted to participate. But Henry Goldman went ahead and announced publicly that he wanted nothing to do with this work, for reasons that were quite open because of his German attitude.

The rule at Goldman Sachs was that the company would not support any issue without the unanimous agreement of the partners. When the latter and the sisters asked Henry – who was nervous, arrogant and a lecturer – to change his feelings for Germany or at least hide them, Henry flatly refused. On the other hand, he expressed himself as a great admirer of Prussia and Pan-Germanism, and he mentioned Nietzsche at every opportunity. Sam and Harry Sachs decided to participate in the loan, “personally”, to save the day. But the damage done by Goldman’s vision was irreversible, so much so that Goldman Sachs was downgraded for a long time.

The entry of the United States into the war in 1917 had no effect on the behavior of Henry Goldman, who could not remain silent. A situation that the family described as “painful” and caused serious problems. While Henry Goldman was advancing, his nephew Howard Sachs became involved in the 26^e Division, and Sam Sachs’s son, Paul, another nephew, was serving in the Red Cross in France.

Other members of both families sold war bonds, made bonds or participated in meetings in which the Kaiser was ridiculed. Kleinwort’s bank cabled New York to say Goldman Sachs was in danger of being “blacklisted” in England. At this point, Goldman himself realized what was happening and went to his associates to tell them that he believed he was “not really in sync anymore.” His resignation was accepted with joy.

For several months, he held his office at Goldman Sachs. But as the atmosphere was getting tighter, he moved to another place in the town. When he left, he brought back his share of the bank’s capital, which was far from small. This situation was even worse for the company than its Germanophile attitude had been. Goldman Sachs fell into lethargy, waiting for the end of the war that allowed him to reappear. Henry Goldman and Samuel Sachs never spoke to each other again. No more than Henry and his sister Louise, wife of Sam Sachs. The hostility continued for several generations.

At the beginning of the 1930s, Henry Goldman left for his beloved Germany, with the idea of ​​settling there permanently. As Adolf Hitler was coming to power, this was a bad idea. Goldman was arrested, investigated and, according to the family, subjected to “many other humiliations”. He returned to New York, disillusioned and humiliated, and died there, a victim of his own Nietzschean dream of power. Philip Lehman, surprised and sorry for the feelings expressed by his old friend, had a last meeting with him. Only to find they were irreconcilable.