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The Lehman Legacy: Family Bonds and the Evolution of a Financial Empire



Family relations play a critical role in defining who we are and shaping our lives. The history of the Lehman Brothers, a global financial services firm, provides an intriguing example of the complex interplay between family relationships and business success. This narrative delves into the story of the Lehman Brothers, exploring the ways in which family ties both helped and hindered their growth and development.

The Lehman Brothers, a company established by three German-Jewish immigrant brothers – Henry, Emanuel, and Mayer Lehman, began as a modest general store in Montgomery, Alabama, in 1850. The brothers' close-knit relationship and shared aspirations laid the foundation for what would eventually become a financial powerhouse. The bond between the siblings was instrumental in their ability to navigate the early years of the company. They relied on each other's strengths and covered for each other's weaknesses, working together to grow the business. In 1858, the Lehman Brothers moved to New York City and transformed their enterprise into a commodities brokerage firm, eventually transitioning to investment banking in the early 20th century.

As the company grew, so did the Lehman family. The second and third generations of the Lehman family became increasingly involved in the business, contributing to its continued success. However, with the influx of family members, tensions began to rise. Conflicting interests and differing visions for the company's future generated discord within the family, which eventually led to divisions in the business.

One personal story involves Philip Lehman, the son of Emanuel Lehman, who played a significant role in expanding the company's banking activities. Under his leadership, Lehman Brothers became involved in financing the emerging railroad industry. His foresight and determination in investing in this sector helped to establish the firm as a prominent player in the financial world. Another personal story revolves around Herbert Lehman, the son of Mayer Lehman. Herbert pursued a career in politics, eventually becoming the Governor of New York and later, a U.S. Senator. His political influence and connections proved to be an asset for the company, especially when it came to financing large-scale projects such as the Panama Canal. The Lehman Brothers played a key role in raising funds for this ambitious endeavor, which significantly impacted global trade and transportation.

In the mid-20th century, the family's influence in the company began to wane. By the 1960s, the last of the direct Lehman descendants, Robert Lehman, served as chairman. His death in 1969 marked the end of the family's involvement in the company, and non-family members took over the management. The Lehman Brothers continued to grow and establish itself as a global financial giant until its eventual collapse in 2008, triggering the largest bankruptcy in US history and contributing to the global financial crisis.

The story of the Lehman Brothers exemplifies the power of family relations in shaping a business. Their collaborative efforts in the early years propelled the company to success, but the very same family ties that initially brought them together later became a source of discord and fragmentation. The rise and fall of the Lehman Brothers serves as a reminder of the intricate nature of family relationships and their influence on the trajectories of our lives and businesses. “

When a black screen at the Park Avenue Armory rose to reveal a stark glass box, a stripped-down version of Lehman’s emptied offices hours before the bankruptcy filing. As it turns out, the firm’s actual disbandment occupies just a few minutes of the script. The central story focuses on the original Lehman brothers — three immigrants from Bavaria who came to this "magical music box called America" in the mid-19th century — and their offspring. After opening a tiny fabric store in Montgomery, Ala., the men turned to brokering cotton between the slave-producing plantations in the South and industrial manufacturers in the North. After the Civil War, they expanded to other commodities before concentrating on financial services and later metamorphosing into the nation’s fourth-largest investment bank. Along the way, the firm invested in tobacco and the Panama Canal, Hollywood’s original "King Kong," and Intel microprocessors.

The action at the Park Avenue Armory unfolds within a stark glass box, tracing the firm’s evolution from an Alabama fabric store to a financial colossus. The play follows the ferocious and glittering financial locomotive they rode through American capitalism for more than a century and a half before being roughly dumped off. But that momentous collapse serves as the story’s frame, bracketing its start and its finish.

The play’s narrative arc makes Lehman Brothers’ hubristic fall seem inevitable. "The state will let the first banks fail, won’t lift a finger," Bobbie, a Lehman grandson, explains in the play, standing in the same glass cube of an office that serves as a stage for the 21st-century action. "They need to look like they aren’t helping." "That’s why we shouldn’t help the other banks in crisis: If they ask for loans, we should say no. The state will do the same. After that first moment, the state will need strong banks and they’ll help us. If we can survive the first month, they won’t let us fail." When Fed officials asked the heads of competing major banks if they could survive a Lehman bankruptcy. "That probably had a significant impact on the decision to let Lehman go," he maintained. Soon, those institutions were receiving the same kind of government assistance denied to Lehman. The rise and fall of the Lehman Brothers serves as a reminder of the intricate nature of family relationships and their influence on the trajectories of our lives and businesses. The play's portrayal of the Lehman family story underscores the complexities and challenges faced by a family-run business, highlighting both the advantages and pitfalls of maintaining family ties within the corporate world.

Bibliography:

  1. Chernow, R. (1990). The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance. New York: Atlantic Monthly Press.

  2. Cohan, W. D. (2010). House of Cards: A Tale of Hubris and Wretched Excess on Wall Street. New York: Doubleday.

  3. McDonald, L. G., & Robinson, P. (2009). A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers. New York: Crown Business.

  4. Sorkin, A. R. (2009). Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves. New York: Viking.

  5. The Lehman Trilogy. (2018). Play by Stefano Massini, adapted by Ben Power, directed by Sam Mendes. National Theatre, London.

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