the beginnings of brokerage firms -- 8/23/21

Today's selection -- from An Illustrated Business History of the United States by Richard Vague.

"After their start in merchandising, the Seligman family began banking operations in the 1860s in New York as well as Frankfurt, London, and Paris under the name J. & W. Seligman and Company. They offered Europeans the opportunity to invest in American government and railroad bonds. 

"In the 1880s, Seligman provided financing for French and American efforts to build a canal in Panama and in the following years supported businesses in rail transportation, steel, wire, shipbuilding, bridges, bicycles, mining, and more. William C. Durant gave control of the General Motors Corporation to the Seligmans and Lee, Higginson and Company in 1910 in exchange for their underwriting of $15 million in General Motors corporate notes. 

"Twenty-three-year-old Bavarian immigrant Henry Lehman, who had opened a dry-goods store in Montgomery, Alabama, in 1844, was soon joined by his brothers Emanuel and Mayer, and the firm became Lehman Brothers. Since cotton dominated Alabama’s economy, the firm entered the cotton trading business. The brothers moved their headquarters to New York when that city became the center of cotton trading and expanded into other commodities, such as coffee, as well as bond trading. In 1887 the firm joined the New York Stock Exchange and in 1899 underwrote its first public offering in the stock of the International Steam Pump Company.

Women-Owned Brokerage Firms

"The investment bank Kuhn, Loeb and Company featured prominently in railway finance. At the end of the nineteenth century, the company president was Jacob Schiff, a Jewish banker regarded by many as [John Pierpont] Morgan’s peer in influence. He financed the Pennsylvania Railroad and the Louisville & Nashville Railroad, and played a hand in the reorganization of the Baltimore & Ohio Railroad. He helped finance the Westinghouse Electric Company and the Western Union Telegraph Company. His tenure, and especially his leadership on issues in the Jewish community, has been referred to as the Schiff era. Internationally, he helped finance the Japanese in the Russo-Japanese War. 

"Women investors date back to the nation’s founding, when Abigail Adams invested in government and war bonds. The world of finance expanded rapidly in the late 1800s, but there were few opportunities for women. A survey published in 1863 noted that there were no women stockbrokers anywhere in the country. The first woman-owned stock brokerage was opened in 1870 by Victoria Woodhull, the noted feminist and free thinker, and her sister Tennessee Claflin, pictured. 

"Woodhull, Claflin & Company opened on Wall Street, thanks to help from Cornelius Vanderbilt, and Woodhull became wealthy advising clients on the New York Stock Exchange. More woman-owned brokerage firms arose in the 1880s, including those opened by Mary Gage and M. E. Favor. However, none of these was located on Wall Street or at the famed New York Stock Exchange. It was not until 1967 that Muriel Siebert would become the first woman to own a seat at that famed stock exchange."



Richard Vague


An Illustrated Business History of the United States


Penn Press


Copyright 2021, University of Pennsylvania


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