Kuhn, Loeb & Co.

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Kuhn, Loeb & Co.
legal form Partnership
founding 1867
resolution 1977
Reason for dissolution Merger with Lehman Brothers
Seat New York City , NY , USA
management John M. Schiff
Chairman
Harvey M. Krueger
President and CEO
Number of employees 550 (1977)
Branch Investment bank

Kuhn, Loeb & Co. was an American investment bank headquartered in New York City . It was founded in 1867 by Abraham Kuhn and Salomon Loeb , with Loeb's $ 500,000 fortune forming the starting capital. Initially, the company mainly traded in government bonds .

Rise of the banking house

With the growing economic success, other partners soon joined the bank, including Jakob Heinrich Schiff from Frankfurt am Main . Due to his knowledge and network in the German financial market , Schiff was able to attract considerable capital for aspiring American companies. This fact made him the undisputed head of Kuhn, Loeb & Co. until 1885. Under Schiff's leadership, the bank grew to become one of the most influential investment banks in the USA at the turn of the 19th and 20th centuries . This was mainly due to the close business relationship between Kuhn, Loeb & Co. and the rapidly expanding American railway industry.

The bank gained fame in the banking world in 1897 when it managed to end the Union Pacific Railroad's bankruptcy proceedings and give EH Harriman control of the railroad company. Loeb, Kuhn & Co. also assisted Harriman in 1901 in his fight against the Great Northern Railway ruled by JP Morgan and James J. Hill for the takeover of Northern Pacific Railroad . In 1902 the bank finally arranged a merger of the counterparties and the merger of their shares in the Great Northern Railway and the Northern Pacific Railroad in a trust , the Northern Securitics Company .

Kuhn, Loeb & Co. also financed rapidly growing companies in other areas of the economy, e. B. Western Union , Westinghouse Electric and Polaroid Corporation . In corporate bonds, it became one of the most important competitors of JP Morgan & Co.

Kuhn, Loeb & Co. also issued government bonds , both for the USA and for many foreign countries. In this context, the sale of Japanese bonds to finance the Russo-Japanese War 1904–05 became particularly well known .

During the First World War, Kuhn, Loeb & Co. only issued loans to finance humanitarian tasks on the instructions of Jacob Schiff. After Schiff's death in 1920 the bank was run by Otto Hermann Kahn and Felix M. Warburg . Both men had already proven themselves capable of successors under Jacob Schiff.

The time after World War II and its decline

After the Second World War , the bank's competitive position gradually deteriorated as it could no longer keep up with the rapidly changing investment industry. Ever tougher business practices increasingly displaced the traditional “ gentleman banker”. In 1977 Kuhn, Loeb & Co. was finally forced to merge with the investment bank Lehman Brothers . The new company was called "Lehman Brothers, Kuhn, Loeb Inc.". This bank was again acquired by American Express in 1984 and merged with its investment banking division "Shearson". Since American Express called its new investment bank subsidiary "Shearson Lehman", the name "Kuhn, Loeb" was lost forever.

literature

  • Kuhn, Loeb & Co. A Century of Investment Banking. New York, self-published, 1967 [company publication].
  • Naomi Wiener Cohen: Jacob H. Schiff: A Study in American Jewish Leadership . In: Brandeis series in American Jewish history, culture, and life . University Press of New England, Hanover, NH 1999, ISBN 0-87451-948-9 , pp. 5 (English, 320 pp., Limited preview in Google Book Search).
  • Charles R. Geisst: The Last Partnerships: Inside the Great Wall Street Dynasties . McGraw Hill Professional, New York 2001, ISBN 0-07-136999-6 , pp. 55 (English, 338 p., Limited preview in Google book search).
  • Elinor Slater; Robert Slater: Great Jewish Men . 2nd Edition. J. David, Middle Village, NY 1996, ISBN 0-8246-0381-8 , pp. 274 (English, 400 p., Limited preview in Google book search).

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