Lehman Brothers

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  • Topic: Lehman Brothers, American Express, Shearson Lehman Hutton
  • Pages : 3 (851 words )
  • Download(s) : 264
  • Published : March 6, 2013
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Summary: Lehman Brothers through predecessor entities began in 1850. From founding the New York Cotton Exchange in 1868, the Lehman Brothers Company became the fourth largest investment bank on Wall Street, with a network of offices in North America, Europe, Latin America, the Middle East and the Asia Pacific region. In 2008, the U.S. financial system was in a state of crisis and Lehman Brothers went from a major Wall Street investment bank to an insolvent institution History of Lehman Brothers linked to the US economy

Henry Lehman immigrated from Rimpar, Germany to Montgomey, Alabama in 1844, and he established a small grocery shop in the town. By 1850, his two elder brothers, Emanuel and Mayer, joined the business and rename it to “Lehman Brothers”. Soon after its founding, Lehman Brothers evolved from a general merchandising business to a commodities broker, focusing particularly on cotton, which played a central role in the US economy in this period."King Cotton” dominated the economy of the southern United States in the 1850s, and open headquarters in New York City giving the firm a stronger presence in the commodities trading business. As the business grew, a brief partnership was formed with cotton merchant John Wesley Durr to build a cotton storage warehouse, enabling Lehman Brothers to engage in larger sales and trades. Although their operations where halt for several years due to the civil war, in 1870 the firm was successfully rebuilt heading the formation of the New York Cotton Exchange, the first commodities futures trading venture, which also includes coffee, sugar, cocoa and petroleum exchange. The rapid development of the railroads in the years following the civil war, helped transform the country from an agrarian to an industrial economy, which resulted in tremendous activity on Wall Street as companies turned to financial markets to raise funds for expansion. Rail securities, primarily in the form of bonds,...