In 1844, 23-year-old Henry Lehman, the son of a cattle merchant, emigrated to the United States from the town of Rimpar, in the German state of Bavaria. He settled in Montgomery, Alabama, where he opened a dry goods store, "H. Lehman". In 1847, following the arrival of Emanuel Lehman, the Firm became "H. Lehman and Bro." With the arrival of their youngest brother, Mayer Lehman, in 1850, the Firm changed its name again and "Lehman Brothers" was founded.
In the 1850s Southern United States, cotton was one of the most important crops. Capitalizing on cotton's high market value, the three brothers began to routinely accept raw cotton from customers as payment for merchandise, eventually beginning a second business 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 and brokerage operations.
By 1858, the center of cotton trading had shifted from the South to New York City, where factors and commission houses were based. Lehman Brothers opened its first branch office there at 119 Liberty Street, and thirty-two year
old Emanuel relocated to New York 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 headquarters were eventually moved to New York City, where they helped found the New York Cotton Exchange in 1870; Emanuel would sit on the Board of Governors until 1884. The firm also dealt in the emerging market for railroad bonds and entered the financial advisory business.
Lehman Brothers became members of the Coffee Exchange as early as 1883 and finally the New York Stock Exchange in 1887. In 1899 they underwrote their first public offering, the preferred and common stock of the International Steam Pump Company.
Despite the 1899 offering of International 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 Philip Lehman, the Firm partnered with Goldman, Sachs & Co., to bring the General Cigar Co. to market, followed closely by Sears, Roebuck and Company. During the following two decades, almost one hundred new issues were underwritten by Lehman Brothers, many times in conjunction with Goldman, Sachs. Among these were F.W. Woolworth Company, May Department Stores Company, Gimbel Brothers, Inc., R.H. Macy & Company, The Studebaker Corporation, The B.F. Goodrich Co. and Endicott Johnson Corporation.
Official U.S. Senate PhotoFollowing 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. By 1928, the firm moved to its now famous One William Street location.
In the 1930s Lehman Brothers underwrote the initial public offering of the first television manufacturer, DuMont and helped fund the Radio Corporation of America (RCA). They also helped finance the rapidly growing oil industry, including the companies Halliburton and Kerr-McGee. In the 1950s, Lehman Brothers underwrote the IPO of Digital Equipment Corporation. Later, they would arrange the acquisition of Digital by Compaq.
In 1924, John M. Hancock became the first non-family member to become a partner, followed by Monroe C. Gutman and Paul Mazur in 1927.
Robert Lehman died in 1969 and since that time, no member of the Lehman family has led the company. Robert's death left a void in the company, which coupled with a difficult economic environment, brought hard times to the firm. In 1973, Pete Peterson, Chairman and Chief Executive Officer of the Bell & Howell Corporation, was brought in to save the firm.
Under Peterson's leadership as Chairman and CEO, the firm acquired Abraham & Co. in 1975, and two years later merged with the venerable, but struggling, Kuhn, Loeb & Co., to form Lehman Brothers, Kuhn, Loeb Inc., the country's fourth largest investment bank, behind Salomon Brothers, Goldman Sachs and First Boston.  Peterson led the Firm from significant operating losses to five consecutive years of record profits with a return on equity among the highest in the investment banking industry.
However, hostilities between the firm's investment bankers and traders (who were driving most of the firm's profits) prompted Peterson to promote Lewis Glucksman, the firm's President, COO and former trader, to be his co-CEO in May 1983. Glucksman introduced a number of changes that had the effect of increasing tensions, which when coupled with Glucksman’s management style and a downturn in the markets, resulted in a power struggle that ousted Peterson and left Glucksman as the sole CEO.
Upset bankers, who had soured over the power struggle, left the company. Steve Schwarzman, chairman of the firm's M&A; committee, recalled in a February 2003 interview with Private Equity International that "Lehman Brothers had an extremely competitive internal environment, which ultimately became dysfunctional." The company suffered under the disintegration, and Glucksman was pressured into selling the firm to Shearson, an American Express backed electronic transaction company, in 1984, for $360 million. On May 11, the combined firms became Shearson Lehman/American Express. In 1988, Shearson Lehman/American Express and E.F. Hutton & Co. merged as Shearson Lehman Hutton Inc.
In 1993, under newly appointed CEO, Harvey Golub, American Express began to divest itself of its banking and brokerage operations. It sold its retail brokerage and asset management operations to Primerica and in 1994 it spun off Lehman Brothers Kuhn Loeb in an initial public offering, as Lehman Brothers Holdings, Inc.
We currently have the following pieces in our inventory that were issued to this historic firm: