Collapse of Lehman Brothers
Collapse of Lehman Brothers
Lehman Brothers was an investment bank that went back to the 1850s, surviving the Civil War, two World Wars, the Great Depression and any other great misfortune that this 160 year old company’s history had gone bankrupt. Lehman brothers were an important part in the financial and commercial industries in the United States. People may have thought that leverage was a bad thing; they should have realized that a dry-goods store turned into a huge investment bank then years later bringing attention to the whole world. Lehman brothers began when an immigrate by the name Henry Lehman came from Germany and settled in Montgomery, Alabama where he started a small shop selling groceries, dry-food and utensils to local farmers. By the late 1840s early 1850s both of his brothers Emanuel and Mayer joined him in the business and named the company Lehman Brothers. After the death of their brother Henry the two younger brothers took over the business for the next forty years. During that policy only family members were allowed as partners whom continued until the 1920s. Lehman brothers grew from being regular merchandising business to a commodities broker which bought and sold cotton to planters around the area of Montgomery, Alabama. The business grew and formed a small partnership with John Wesley Durr to build a warehouse which helped Lehman brothers to take on larger sales. Lehman brothers opened a New York office giving them a stronger presence in commodities. Lehman brothers had to rebuild their firm due to the civil war, but wanted to focus on their operations in the New York office. Mayer Lehman was the first person appointed as the board of directors. Lehman Brothers commodities and trading business grew that they help establish the Coffee and Petroleum Exchange. Robert Lehman became a partner in the firm during the 1920s and he moved to the leadership role. He led the firm from the 1929 to 1969 which that time there was a
Lehman Brothers was an investment bank that went back to the 1850s, surviving the Civil War, two World Wars, the Great Depression and any other great misfortune that this 160 year old company’s history had gone bankrupt. Lehman brothers were an important part in the financial and commercial industries in the United States. People may have thought that leverage was a bad thing; they should have realized that a dry-goods store turned into a huge investment bank then years later bringing attention to the whole world. Lehman brothers began when an immigrate by the name Henry Lehman came from Germany and settled in Montgomery, Alabama where he started a small shop selling groceries, dry-food and utensils to local farmers. By the late 1840s early 1850s both of his brothers Emanuel and Mayer joined him in the business and named the company Lehman Brothers. After the death of their brother Henry the two younger brothers took over the business for the next forty years. During that policy only family members were allowed as partners whom continued until the 1920s. Lehman brothers grew from being regular merchandising business to a commodities broker which bought and sold cotton to planters around the area of Montgomery, Alabama. The business grew and formed a small partnership with John Wesley Durr to build a warehouse which helped Lehman brothers to take on larger sales. Lehman brothers opened a New York office giving them a stronger presence in commodities. Lehman brothers had to rebuild their firm due to the civil war, but wanted to focus on their operations in the New York office. Mayer Lehman was the first person appointed as the board of directors. Lehman Brothers commodities and trading business grew that they help establish the Coffee and Petroleum Exchange. Robert Lehman became a partner in the firm during the 1920s and he moved to the leadership role. He led the firm from the 1929 to 1969 which that time there was a
Cited: http://www.library.hbs.edu/hc/lehman/history.html http://www.investopedia.com/articles/economics/09/lehman-brothers-collapse.asp http://www.newsweek.com/2010/09/14/was-the-great-panic-of-2008-preventable.html http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4761892.ece http://www.time.com/time/business/article/0,8599,1923197,00.html http://www.foxbusiness.com/markets/2010/10/07/sec-focusing-lehmans-approval-repo-use/ http://www.washingtonpost.com/wp-dyn/content/article/2010/03/17/AR2010031704047.html