Kuhn, Loeb & Co. was an American multinational

investment bank Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...

founded in 1867 by Abraham Kuhn and his brother-in-law

Solomon Loeb Solomon Loeb (June 29, 1828 – December 12, 1903) was a German-born American banker and businessman. He was a merchant in textiles and later a banker with Kuhn, Loeb & Co. Biography His father, a devout Jew, had been a small corn- and wine ...

. Under the leadership of Jacob H. Schiff, Loeb's son-in-law, it grew to be one of the most influential

s in the late 19th and early 20th centuries, financing America's expanding railways and growth companies, including

Western Union The Western Union Company is an American multinational financial services company, headquartered in Denver, Colorado. Founded in 1851 as the New York and Mississippi Valley Printing Telegraph Company in Rochester, New York, the company cha ...

and Westinghouse, and thereby becoming the principal rival of J.P. Morgan & Co. In the years following Schiff's death in 1920, the firm was led by

Otto Kahn Otto Hermann Kahn (February 21, 1867 – March 29, 1934) was a German-born American investment banker, collector, philanthropist, and patron of the arts. Kahn was a well-known figure, appearing on the cover of ''Time'' magazine and was sometime ...

and

Felix Warburg Felix Moritz Warburg (January 14, 1871October 20, 1937) was a German-born American banker. He was a member of the Warburg banking family of Hamburg, Germany. Early life Warburg was born in Hamburg, Germany, on January 14, 1871. He was a grandso ...

, men who had already solidified their roles as Schiff's able successors. However, the firm's fortunes began to fade following

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposing ...

, when it failed to keep pace with a rapidly changing investment banking industry, in which Kuhn, Loeb's old-world, genteel ways, did not seem to fit; the days of the gentleman-banker had passed. The firm lost its independence from the Bulge Bracket in 1977 when it merged with

Lehman Brothers Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, a ...

, creating Lehman Brothers, Kuhn, Loeb Inc. The combined firm was itself acquired in 1984 by American Express, forming

Shearson Lehman/American Express Shearson was the name of a series of investment banking and retail brokerage firms from 1902 until 1994, named for Edward Shearsoninvestment bank Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...

located in

New York City New York, often called New York City or NYC, is the most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the most densely populated major city in the Un ...

. It was founded in 1867, by Abraham Kuhn and

. Kuhn and Loeb had created a successful merchandising business in

Cincinnati Cincinnati ( ) is a city in the U.S. state of Ohio and the county seat of Hamilton County. Settled in 1788, the city is located at the northern side of the confluence of the Licking and Ohio rivers, the latter of which marks the state line wit ...

Ohio Ohio () is a state in the Midwestern region of the United States. Of the fifty U.S. states, it is the 34th-largest by area, and with a population of nearly 11.8 million, is the seventh-most populous and tenth-most densely populated. The sta ...

, when they decided to move east, to New York, to take advantage of the country's burgeoning economic expansion. Company records indicate that by the time Kuhn and Loeb established their partnership, they were able to capitalize it at $500,000 (equivalent of about $ million in ). On January 1, 1875,

Jacob Schiff Jacob (; ; ar, يَعْقُوب, Yaʿqūb; gr, Ἰακώβ, Iakṓb), later given the name Israel, is regarded as a patriarch of the Israelites and is an important figure in Abrahamic religions, such as Judaism, Christianity, and Islam. Ja ...

(1847–1920), Solomon Loeb's son-in-law, joined the firm. He eventually became its leader and grew the firm into the second most prestigious investment bank in the United States behind J. Pierpont Morgan's J.P. Morgan & Co. JacobSchiff

The firm grew to prominence during the railroad era in the United States. Americans saw great hope and promise in railroads and investors saw great opportunities to profit. Kuhn, Loeb, like all investment banks, brought capital together with commercial opportunity. Its first meaningful entry into railroad financing was in 1877 when it raised funds for the

Chicago and North Western Railroad The Chicago and North Western was a Class I railroad in the Midwestern United States. It was also known as the "North Western". The railroad operated more than of track at the turn of the 20th century, and over of track in seven states befor ...

, and several years later, in 1881, for the Pennsylvania Railroad and the Chicago, Milwaukee & St. Paul Railroad. Schiff was instrumental in the reorganization of the

Union Pacific The Union Pacific Railroad , legally Union Pacific Railroad Company and often called simply Union Pacific, is a freight-hauling railroad that operates 8,300 locomotives over routes in 23 U.S. states west of Chicago and New Orleans. Union Pac ...

in 1897, helping to place the firm on sound financial footing. In 1901, with Kuhn, Loeb's financial support,

E. H. Harriman Edward Henry Harriman (February 20, 1848 – September 9, 1909) was an American financier and railroad executive. Early life Harriman was born on February 20, 1848, in Hempstead, New York, the son of Orlando Harriman Sr., an Episcopal clergyman ...

famously battled

James Jerome Hill James Jerome Hill (September 16, 1838 – May 29, 1916) was a Canadian-American railroad director. He was the chief executive officer of a family of lines headed by the Great Northern Railway, which served a substantial area of the Upper Midwe ...

and J.P. Morgan to acquire control of the

Northern Pacific Railroad The Northern Pacific Railway was a transcontinental railroad that operated across the northern tier of the western United States, from Minnesota to the Pacific Northwest. It was approved by Congress in 1864 and given nearly of land grants, whi ...

. The firm was long associated with many of America's emerging industrial giants, providing financial backing for Westinghouse and

, as well as innovative consumer giants like the

Polaroid Corporation Polaroid is an American company best known for its instant film and cameras. The company was founded in 1937 by Edwin H. Land, to exploit the use of its Polaroid polarizing polymer. Land ran the company until 1981. Its peak employment was 21,0 ...

. The firm also enjoyed respect as a trusted adviser overseas, providing services to numerous foreign governments, including the governments of Austria, Finland, Mexico and Venezuela. It also acted as the leading investment house for

John D. Rockefeller John Davison Rockefeller Sr. (July 8, 1839 – May 23, 1937) was an American business magnate and philanthropist. He has been widely considered the wealthiest American of all time and the richest person in modern history. Rockefeller was ...

, through the guidance of his investment adviser, Frederick T. Gates. Rockefeller invested in many syndicates with the bank, including major stakes in the prominent railroad companies, as well as contributing to its consolidation of the Chicago meatpackers, which resulted in the formation of a leading trust. Overseas ventures that Rockefeller also got involved with included the bank's loans to the Chinese and Imperial Japanese governments. The firm also joined a partnership with Rockefeller in 1911 to gain control of the Equitable Trust Company, which was later to merge and become the

Chase Bank JPMorgan Chase Bank, N.A., doing business as Chase Bank or often as Chase, is an American national bank headquartered in New York City, that constitutes the consumer and commercial banking subsidiary of the U.S. multinational banking and fin ...

. Famous partners of the firm included

Paul Warburg Paul Moritz Warburg (August 10, 1868 – January 24, 1932) was a German-born American investment banker who served as the 2nd Vice Chair of the Federal Reserve from 1916 to 1918. Prior to his term as vice chairman, Warburg appointed as a member o ...

, Mortimer Schiff, Benjamin Buttenwieser, Abraham Wolff,

Lewis Strauss Lewis Lichtenstein Strauss ( "straws"; January 31, 1896January 21, 1974) was an American businessman, philanthropist, and naval officer who served two terms on the U.S. Atomic Energy Commission (AEC), the second as its chairman. He was a major ...

, and Sigmund Warburg, founder of

S.G. Warburg S. G. Warburg & Co. was a London-based investment bank. It was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index. The firm was acquired by the Swiss Bank Corporation in 1995 and ultimately became a part of UB ...

. In its early years, intermarriage among the German-Jewish elite was common. Consequently, the partners of Kuhn, Loeb were closely related by blood and marriage to the partners of J & W Seligman, Speyer & Co., Goldman, Sachs & Co.,

and other prominent German-Jewish firms. Prior to the Second World War, a particularly close relationship existed between the partners of Kuhn, Loeb and M. M. Warburg & Co. of Hamburg, Germany, through Paul and Felix, who were Kuhn, Loeb partners. Later on, following World War II, their cousin Sigmund Warburg would briefly continue this relationship as a partner and Executive Director of the firm. The firm's fortunes began to fade in the years following World War II. Wall Street was changing and shifting away from relationship banking. Kuhn, Loeb's world of gentlemen bankers was gradually being replaced by a more aggressive, transaction-oriented Wall Street, with underwriters entering the trenches and selling securities directly to the public—territory Kuhn, Loeb stubbornly refused to enter. When asked how many people worked at Kuhn, Loeb, one partner famously quipped, "about half". Such was life at Kuhn, Loeb, resting on its laurels, while Wall Street passed it by. In 1977, facing a capital crisis, the firm succumbed and merged with

, to form Lehman Brothers, Kuhn, Loeb Inc. Internationally, the merged firms were known as Kuhn Loeb Lehman Brothers Inc., in recognition Kuhn Loeb's superior international reputation. The merger did not, however, prove to be the panacea to what ailed Kuhn, Loeb. Indeed, as detailed more closely in the

history, a period of bitter internal strife ended in 1984 when the firm sold itself to Shearson/ American Express, itself the product of a recent merger between American Express and Sandy Weill's, Shearson Loeb Rhoades. The combined firms then dropped the Kuhn, Loeb name and became known as Shearson Lehman/American Express, ending Kuhn, Loeb's almost 120 years on Wall Street. Later, the combined firm purchased

E.F. Hutton EF Hutton was an American brokerage firm, stock brokerage firm founded in 1904 by Edward Francis Hutton and his brother, Franklyn Laws Hutton. Later, it was led by well known Wall Street trader Gerald M. Loeb. Under their leadership, EF Hutton b ...

, becoming Shearson Lehman Hutton. Ultimately, however, American Express could not make the pieces of its financial services supermarket work. In 1993, under then newly appointed CEO,

Harvey Golub Harvey Golub (born April 16, 1939) is an American businessman. Biography Born to a Jewish family, Golub attended Cornell University and received a Bachelor of Science from the New York University. He worked as a senior partner with McKinsey ...

, the firm sold its retail brokerage operations to

Primerica Primerica, Inc. (NYSE: PRI) is a company that provides insurance, investment and financial services to middle income families in the United States and Canada. Primerica is the parent company of National Benefit Life Insurance Company, Prime ...

. In 1994, it spun off a beleaguered Lehman Brothers as Lehman Brothers Holdings Inc., in an initial public offering. Although the Kuhn, Loeb name is probably gone forever, the firm's legacy is not. Former Kuhn, Loeb employees remain in senior positions throughout Wall Street, and until recently, at Lehman Brothers. Vestiges of the firm survived in the form of Lehman Brothers' extensive fixed income capabilities, including many of their bond indices, such as the Government/Credit index. This index, originally created in 1973 by Kuhn, Loeb, as the Government/Corporate index, was among the first generation of bond index data to measure the fixed income market. It is still the preeminent benchmark in its class.

Successors

The following is an illustration of the company's mergers and its role in later successor firms, notably Lehman Brothers Kuhn Loeb,

Shearson Lehman Brothers Shearson was the name of a series of investment banking and retail brokerage firms from 1902 until 1994, named for Edward ShearsonLehman Brothers Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, a ...

(this is not a comprehensive list):"Salomon Smith Barney" from Gambee, Robert.
Wall Street
'. W. W. Norton & Company, 1999. p.73

Partners of the Firm

General Partners

* Abraham Kuhn (1867–1887) *

^ (1867–1899) * Samuel Wolff (1867–1872) * Samuel Kuhn (1868–1869) * Jacob Netter (1867–1869) * Jacob H. Schiff^ (1875–1920) * Abraham Wolff (1875–1900) * Michael Gernsheim (1875–1881) * Lewis S. Wolff (1884–1891) * James Loeb (1894–1901) * Louis A. Heinsheimer (1894–1909) * Felix M. Warburg (1897–1937) * Otto H. Kahn^ (1897–1934) * Mortimer L. Schiff (1900–1931) * Paul M. Warburg (1903–1914) * Jerome J. Hanauer** (1912–1932) * Gordon Leith (London) (1927–1930) * George W. Bovenizer (1929–1961) * Lewis L. Strauss (1929–1946) * Sir William Wiseman, Bart. (1929–1960) * John M. Schiff^ (1931 – ?) *

Frederick M. Warburg Frederick Marcus Warburg (October 14, 1897 – July 10, 1973) was a Jewish-American banker from New York. Life Warburg was born on October 14, 1897, in New York City, the son of banker Felix M. Warburg and Frieda Schiff. A member of the Jewish ...

(1931 – ?) * Gilbert W. Kahn (1931 – ?) * Benjamin J. Buttenwieser (1932–1949) * Hugh Knowlton (1932 – ?) * Elisha Walker (1933–1950) * Percy M. Stewart (1941 – ?) * Robert F. Brown (1941 – ?) * Robert E. Walker (1949–1958) * J. Emerson Thors (1949 – ?) * J. Richardson Dilworth (1952–1958) * Jonas C. Andersen (1955–1956) * Sir Siegmund G. Warburg (London) (1956–1964) * David T. Miralia (1957 – ?) * Kenneth N. Hall (1956 – ?) * Henry Necarsulmer (1956–1977) * Charles J. Ely (1956 – ?) * Bernard Einhorn (1965–1967) * Nathaniel Samuels^ (1955–1974) * Morris H. Wright * John M. Leonard * Alvin E. Friedman (1962 – ?) * John S. Guest (1962 – ?) * Jerome S. Katzin (1962–1977) * John T. Monzani (1962–?) * H. Spottswood White (1962–?) * Thomas E. Dewey Jr. (1966–1975) * Andre Istel (1964–1966) * Harvey M. Krueger^ (1965–1977) * Anthony M. Lund * William H. Todd * Yves-Andres Istel (1966 – ?) * John K. Libby (1967–1977) * James H. Manges (1967 – ?) * David T. Schiff (1967 – ?) * Sydney S. Netreba (1968 – ?) * Sidney J. Sauerhaft (1968 – ?) * Joseph F. Schwartz (1968 – ?) * John Barry Ryan III (1969 -) * Edgar R. Koerner (1969 – ?) * Archie E. Albright (1969 – ?) * Mark C. Feer (1969–1977) * W. Richard Bingham (1970 – ?) * James A. Favia (1970 – ?) * William M. Kearns Jr. (1970 – ?) * Norman W. Stewart (1970 – ?) * Clifford W. Michel (1972 – ?) * Robert M. Shepard (1973–1977) ** First non-family member to be admitted to the partnership.
^ Indicates status as former managing partner

Partnership Summary Data

* 67 General Partners * Longest Serving Partners: Jacob H. Schiff (45 years), Felix M. Warburg (40 years)

Clients of the Firm

* American Smelting and Refining Company *

Anheuser-Busch Anheuser-Busch Companies, LLC is an American brewing company headquartered in St. Louis, Missouri. Since 2008, it has been wholly owned by Anheuser-Busch InBev SA/NV ( AB InBev), now the world's largest brewing company, which owns multiple ...

* Automatic Data Processing, Inc. * Bank Leumi * Bayer *

Bethlehem Steel The Bethlehem Steel Corporation was an American steelmaking company headquartered in Bethlehem, Pennsylvania. For most of the 20th century, it was one of the world's largest steel producing and shipbuilding companies. At the height of its succe ...

CIT Group CIT Group (CIT), a subsidiary of First Citizens BancShares, is an American financial services company. It provides financing, including factoring, cash management, treasury management, mortgage loans, Small Business Administration loans, le ...

* Chemical Bank * The Dreyfus Corporation * Eastern Air Lines *

Endicott Johnson Corporation The Endicott-Johnson Shoe Company ("E-J") was a prosperous manufacturer of shoes based in New York's Southern Tier, with factories mostly located in the area's Triple Cities of Binghamton, Johnson City, and Endicott. An estimated 20,000 people ...

Erie Lackawanna Railway The Erie Lackawanna Railway , known as the Erie Lackawanna Railroad until 1968, was formed from the 1960 merger of the Erie Railroad and the Delaware, Lackawanna & Western Railroad. The official motto of the line was "The Friendly Service Route" ...

* European Coal and Steel Community (forerunner of the E.U.) *

Ford Foundation The Ford Foundation is an American private foundation with the stated goal of advancing human welfare. Created in 1936 by Edsel Ford and his father Henry Ford, it was originally funded by a US$25,000 gift from Edsel Ford. By 1947, after the death ...

The Great Atlantic and Pacific Tea Company The Great Atlantic & Pacific Tea Company, better known as A&P, was an American chain of grocery stores that operated from 1859 to 2015. From 1915 through 1975, A&P was the largest grocery retailer in the United States (and, until 1965, the lar ...

* ITT Corporation *

Israel Discount Bank Israel Discount Bank, Ltd. is a retail bank, commercial bank, private bank and financial services company headquartered in Tel Aviv with 112 branches throughout Israel. Discount Bank is a public company traded on the Tel Aviv Stock Exchange und ...

* Kingdom of Denmark *

Kingdom of Norway Norway, officially the Kingdom of Norway, is a Nordic country in Northern Europe, the mainland territory of which comprises the western and northernmost portion of the Scandinavian Peninsula. The remote Arctic island of Jan Mayen and the ...

Ericsson (lit. "Telephone Stock Company of LM Ericsson"), commonly known as Ericsson, is a Swedish multinational networking and telecommunications company headquartered in Stockholm. The company sells infrastructure, software, and services in informa ...

, Sweden *

Metromedia Metromedia (also often MetroMedia) was an American media company that owned radio and television stations in the United States from 1956 to 1986 and controlled Orion Pictures from 1988 to 1997. Metromedia was established in 1956 after the DuMon ...

* Metropolis of Tokyo, Japan *

Power Authority of the State of New York The New York Power Authority (NYPA), officially the Power Authority of the State of New York, is a New York State public-benefit corporation. It is the largest state public power utility in the United States. NYPA provides some of the lowest-co ...

RKO RKO Radio Pictures Inc., commonly known as RKO Pictures or simply RKO, was an American film production and distribution company, one of the "Big Five" film studios of Hollywood's Golden Age. The business was formed after the Keith-Albee-Orpheu ...

Republic Aviation The Republic Aviation Corporation was an American aircraft manufacturer based in Farmingdale, New York, on Long Island. Originally known as the Seversky Aircraft Company, the company was responsible for the design and production of many important ...

Republic of Austria Austria, , bar, Östareich officially the Republic of Austria, is a country in the southern part of Central Europe, lying in the Eastern Alps. It is a federation of nine states, one of which is the capital, Vienna, the most populous ci ...

Republic of Finland Finland ( fi, Suomi ; sv, Finland ), officially the Republic of Finland (; ), is a Nordic country in Northern Europe. It shares land borders with Sweden to the northwest, Norway to the north, and Russia to the east, with the Gulf of B ...

* Republic of Peru *

Republic of the Philippines The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no), * bik, Republika kan Filipinas * ceb, Republika sa Pilipinas * cbk, República de Filipinas * hil, Republ ...

Republic of Venezuela The Republic of Venezuela was a democratic republic first established in 1958, and replaced in 1999 by the Bolivarian Republic of Venezuela. Venezuela saw ten years of military dictatorship from 1948 to 1958. After the 1948 Venezuelan coup ...

Reynolds Metals Company Reynolds Group Holdings is a New Zealand based packaging company with roots in the former Reynolds Metals Company, which was the second-largest aluminum company in the United States, and the third-largest in the world. Reynolds Metals was acquire ...

* Rockwell Manufacturing Company * Rockwell-Standard Corp. * Southern Pacific Transportation Company *

Stouffer's Stouffer's is a brand of frozen prepared foods currently owned by Nestlé. Its products are available in the United States and Canada. Stouffer's is known for such popular fare as lasagna, macaroni and cheese, meatloaf, ravioli, and salisbury ...

Uniroyal The company formerly known as the United States Rubber Company, now Uniroyal, is an American manufacturer of tires and other synthetic rubber-related products, as well as variety of items for military use, such as ammunition, explosives, chemical ...

Mexico Mexico (Spanish: México), officially the United Mexican States, is a country in the southern portion of North America. It is bordered to the north by the United States; to the south and west by the Pacific Ocean; to the southeast by Guatema ...

(United Mexican States) * Wagner Electric Corporation *

Western Union Telegraph Company The Western Union Company is an American multinational financial services company, headquartered in Denver, Colorado. Founded in 1851 as the New York and Mississippi Valley Printing Telegraph Company in Rochester, New York, the company chang ...

Westinghouse Electric Corporation The Westinghouse Electric Corporation was an American manufacturing company founded in 1886 by George Westinghouse. It was originally named "Westinghouse Electric & Manufacturing Company" and was renamed "Westinghouse Electric Corporation" in ...

Operating Entities

* Kuhn, Loeb & Co. Incorporated * Kuhn, Loeb Asia Limited * Kuhn, Loeb Government Securities Incorporated * Kuhn, Loeb International Limited

Office Locations

Kuhn, Loeb & Co., had a number of homes throughout its existence: * 31 Nassau Street, New York, NY (1867) * 30 Nassau Street, New York, NY (1884) * 27 Pine Street, New York, NY (1894) * 52 William Street, New York, NY (1903) * 30 Wall Street, New York, NY, (May 31, 1955) * 40 Wall Street, New York, NY *

55 Water Street 55 Water Street is a skyscraper on the East River in the Financial District of Lower Manhattan, New York City. The 53-story, structure was completed in 1972. Designed by Emery Roth and Sons, the building was developed by the Uris brothers ...

(as Lehman Brothers Kuhn Loeb)

Value of a Dollar

In 1867 Kuhn, Loeb & Co., was reputed to have been capitalized at $500,000.00. In today's dollars, versus various benchmarks, this would be equal to: * $7,029,288.70 using the Consumer Price Index * $6,321,583.51 using the GDP deflator * $55,096,551.72 using the unskilled wage * $98,870,892.13 using the GDP per capita * $791,998,799.52 using the United States Gross Domestic Product MeasuringWorth.com
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Law Firms Representing Kuhn, Loeb & Co.

* Guthrie, Cravath & Henderson L.L.P. * Dewey, Ballantine, Bushby, Palmer & Wood L.L.P.

References

Books

* Auletta, Ken. ''Greed and Glory on Wall Street: The Fall of the House of Lehman''. Random House, 1985 * Birmingham, Stephen. '' Our Crowd: The Great Jewish Families of New York''. Pocket Books, 1977 * Chernow, Ron. ''The Warburgs''. Random House, 1993 * Collins, Theresa M. ''Otto Kahn: Art, Money & Modern Time''. The University of North Carolina Press, 2002 * Kuhn, Loeb & Co. ''Kuhn, Loeb & Co.: A Century of Investment Banking''. New York: privately printed, 1967 * Kuhn, Loeb & Co. ''Kuhn Loeb & Co.: Investment Banking Through Four Generations''. privately printed, 1955 * Strauss, Lewis L. ''Men and Decisions''. Doubleday, 1961 * Williams, Iain Cameron. ''The KAHNS of Fifth Avenue'', iwp publishing, February 17, 2022,

Articles

The Gilded Age – Investment Bankers

External links

Citigroup's ancestor companies 1812 – 2000
{{DEFAULTSORT:Kuhn, Loeb and Co. Lehman Brothers Banks based in New York City Defunct financial services companies of the United States Former investment banks of the United States Financial services companies established in 1867 Banks established in 1867 Rockefeller family Defunct companies based in New York (state) Loeb family Shearson Lehman/American Express