When Money Was in Fashion
By June Breton Fisher
2010, $27.00, pp. 256
It's not often that a sentimental memoir tells the story of Wall Street's early days. But June Breton Fisher begins hers with an account of how her great-grandfather, a poor German-Jewish immigrant, quickly figured out that he could make money by helping small-time merchants in lower Manhattan get short-term loans. That great-grandfather was Marcus Goldman, patriarch of Goldman Sachs.
A century and a half before multi-million dollar bonuses--made possible in part by secret bets against its own clients (and other forms of financial wizardry or chicanery, depending on one's perspective)--turned Goldman Sachs into a post-bailout symbol of Wall Street excess, Marcus opened a tiny office "in a basement next to a coal chute on Pine Street." Conducting his business on foot, he borrowed money from banks and made loans every morning to local tanners and jewelers so they could fund their day's operations. Marcus collected their payments in the afternoon, including a commission for himself, when he repaid the banks. He hid die cash in the band of his tall top hat.
Fisher reports that within just a year of hanging out his shingle in 1869, Marcus "carried" as much as $5 million. It's an impressive figure--even in today's dollars, which is presumably what she means. She doesn't explain whether the number refers to his commissions or total lending, or exactly how Marcus was able to pull such a vast sum out of his hat, as it were. But Fisher isn't much interested in the workings of the Goldman money magic. Rather, she is an heiress now in her early 80s who wants to share family lore and, especially, ensure that die Goldmans, and not their hated rivals die Sachses, get credit for the success of America's most powerful Wall Street firm.
Here's one of her early stories: After blowing out the candles at his 60th birthday dinner in 1882, Marcus delivers "a crushing blow" to his son Henry, Fisher's paternal grandfather, by announcing that his son-in-law Samuel Sachs would instead be his principal partner. "One side of the table beamed, the other looked stunned" Fisher writes. She describes Sam as undeserving, "a worrywart ... never known for having an original streak" and Henry as a budding genius who was humiliated solely because he was physically weak and very nearsighted. The book's citations are spotty, so it's hard for a reader to assess where all this is coming from, but it's clear whose side she's on.
According to Fisher, it was over Sam's objections that Henry--who started as a junior partner and eventually made full partner--pushed Goldman Sachs into the business that it has dominated ever since, investment banking, and championed the world's first public stock offering for a retail company, Sears, Roebuck & Co. …