Shearson, Hammill & Co.

Last updated
Shearson, Hammill & Co.
Type Private partnership
Industry Financial services
Founded1902
Founder Edward Shearson
Defunct1974
FateAcquired in 1974 by Hayden, Stone & Co.
SuccessorShearson Hayden Stone, Shearson/American Express (1981)
Headquarters New York, New York, United States
Products Investment banking, Brokerage

Shearson, Hammill & Co. was a Wall Street brokerage and investment banking firm founded in 1902 by Edward Shearson and Caleb Wild Hammill. The firm originally built its business as a stock broker as well as a broker of various commodities, particularly grain and cotton. The firm was a member of the New York Stock Exchange, the Chicago Stock Exchange and the Chicago Mercantile Exchange. [1]

Contents

The firm was originally headquartered in the Empire Building at 71 Broadway in New York City and maintained another main office in Chicago. [1]

Shearson was acquired in by Hayden Stone & Co. to form Shearson Hayden Stone in 1974.

History

Edward Shearson (c. 1904), founder of Shearson, Hammill & Co. Edward Shearson c.1904.png
Edward Shearson (c. 1904), founder of Shearson, Hammill & Co.

Shearson, Hammill & Co. was founded by Edward Shearson and Caleb Wild Hammill in 1902. Before forming the firm, Shearson had served as comptroller of U.S. Steel and of Federal Steel Company before that. Shearson, who was raised in Ontario, Canada began his career as an auditor for the Wisconsin Central Railroad before taking a position in the steel industry in 1898. Shearson was an active member of New York society. [2] Hammill, who was raised in Albion, Michigan, moved first to Chicago and subsequently to New York in 1890.

By the end of World War I, Shearson Hammill had six branch offices and seven correspondents. [3]

In the 1960s Shearson, Hammill became well known for its commercials that suggested "If You Want To Know What’s Going On On Wall Street, Ask Shearson Hammill." [4] The firm had 63 offices in the US and internationally supported by a well-regarded securities research department. [5]

Shearson logo from 1978 Shearson 1978 logo.png
Shearson logo from 1978

In the early 1970s, Shearson faced financial difficulties as did many of the venerable Wall Street firms in the midst of the 1973–1974 stock market crash. In response to the crisis, Shearson laid off a large portion of its staff in 1973. [6] Meanwhile, through the 1960s and 1970s, Sanford I. Weill, the chairman of the up-and-coming Cogan, Berlind, Weill & Levitt, had been acquiring many of Wall Streets oldest and most venerable investment banking and brokerage firms. By 1973, Weill's firm was known as Hayden Stone, Inc. following the acquisition of Hayden, Stone & Co. Despite its strong retail brokerage business, Shearson's capital reserves were diminished and by 1974, it was clear that Shearson did not have sufficient capital to survive as an independent firm, opting to merge with Weill's better capitalized Hayden Stone, Inc.. The combined firm was renamed Shearson Hayden Stone, as Weill retained the Shearson brand, which was widely recognized as a major underwriter and brokerage. [7]

Weill's next major target in 1979 was another prominent investment bank, Loeb, Rhoades, Hornblower & Co., which like Shearson had been suffering financial difficulties and was looking for a potential acquiror. During Mothers Day Weekend 1979, Shearson and Loeb agreed to an $83 million all-stock merger to form Shearson Loeb Rhoades, with Weill assuming the position of CEO of the combined firm. At the time of the merger, Shearson Loeb Rhoades, with $260 million of combined assets and approximately $550 million of revenue, was among the largest investment banking houses. By most measures, Shearson became the second largest Merrill Lynch as the second largest brokerage firm in the U.S. although the merger with Loeb Rhoades was more notable for introducing a stronger investment banking business to Shearson. [8] [9]

In 1981, Weill sold the combined Shearson Loeb Rhoades to American Express to form Shearson/American Express. In 1984, American Express would acquire the investment banking and trading firm, Lehman Brothers Kuhn Loeb, and added it to the Shearson family, creating Shearson Lehman/American Express.

The Shearson name was finally abandoned in 1994 following Primerica's acquisition of Shearson from American Express. Although initially Primerica had intended to brand its retail brokerage business as Smith Barney Shearson, the Shearson name was dropped. [10]

Acquisition history

The following is an illustration of the company's major mergers and acquisitions and historical predecessors (this is not a comprehensive list): [11]


Shearson Lehman Hutton
(merged 1988)
Shearson Lehman Brothers
(merged 1984)
Shearson/American Express
(merged 1981)

American Express
(est. 1850)

Shearson Loeb Rhoades
(acquired 1981)
Shearson Hayden Stone
(merged 1973)
Hayden Stone, Inc.  (formerly CBWL-Hayden Stone, merged 1970)

Cogan, Berlind, Weill & Levitt
(formerly Carter, Berlind, Potoma & Weill, est. 1960)

Hayden, Stone & Co.

Shearson, Hammill & Co.
(est. 1902)

Loeb, Rhoades, Hornblower & Co.
(merged 1978)
Loeb, Rhoades & Co.
(merged 1937)

Carl M. Loeb & Co.
(est. 1931)

Rhoades & Company
(est. 1905)

Hornblower, Weeks, Noyes & Trask
(merged 1953-1977)

Hornblower & Weeks
(est. 1888)

Hemphill, Noyes & Co.
(est. 1919, acq. 1963)

Spencer Trask & Co.
(est. 1866 as Trask & Brown)

Paul H. Davis & Co.
(est. 1920, acq. 1953)

Lehman Brothers Kuhn Loeb
(merged 1977)

Lehman Brothers
(est. 1850)

Kuhn, Loeb & Co.
(est. 1867)

Abraham & Co.
(est. 1938, acq. 1975)

E. F. Hutton & Co.
(est. 1904)

See also

Related Research Articles

EF Hutton was an American 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 became one of the most respected financial firms in the United States and for several decades was the second largest brokerage firm in the country.

American Express American multinational financial services corporation

The American Express Company (AmEx) is a multinational corporation specialized in payment card services headquartered at 200 Vesey Street in the Battery Park City neighborhood of Lower Manhattan in New York City. The company was founded in 1850 and is one of the 30 components of the Dow Jones Industrial Average. The company's logo, adopted in 1958, is a gladiator or centurion whose image appears on the company's well-known traveler's cheques, charge cards, and credit cards.

Sanford I. Weill

Sanford I. "Sandy" Weill is an American banker, financier and philanthropist. He is a former chief executive and chairman of Citigroup. He served in those positions from 1998 until October 1, 2003, and April 18, 2006, respectively.

Morgan Stanley Wealth Management is an American multinational financial services corporation specializing in retail brokerage. It is the wealth & asset management division of Morgan Stanley. On January 13, 2009, Morgan Stanley and Citigroup announced that Citigroup would sell 51% of Smith Barney to Morgan Stanley, creating Morgan Stanley Smith Barney, which was formerly a division of Citi Global Wealth Management. The combined brokerage house has 17,646 financial advisors and manages $2 trillion in client assets. Clients range from individual investors to small- and mid-sized businesses, as well as large corporations, non-profit organizations and family foundations.

Lehman Brothers Holdings Inc. was a global financial services firm founded in 1847. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States, with about 25,000 employees worldwide. It was doing business in investment banking, equity and fixed-income sales and trading, research, investment management, private equity, and private banking. Lehman was operational for 158 years from its founding in 1850 until 2008.

Kuhn, Loeb & Co. was an American multinational investment bank founded in 1867 by Abraham Kuhn and his brother-in-law Solomon Loeb. Under the leadership of Jacob H. Schiff, Loeb's son-in-law, it grew to be one of the most influential investment banks in the late 19th and early 20th centuries, financing America's expanding railways and growth companies, including Western Union and Westinghouse, and thereby becoming the principal rival of J.P. Morgan & Co.

A. G. Becker & Co. was an investment bank based in Chicago, Illinois, United States.

Hayden, Stone & Co. was a major securities firm founded in 1892 by Charles Hayden and Galen L. Stone. The firm was acquired by Cogan, Berlind, Weill & Levitt in 1972 and, after its name disappeared in 1979, was part of what would become Shearson/American Express in 1981.

H. J. Meyers & Co, Inc. of Rochester, New York is a defunct investment banking and brokerage firm that specialized in small cap and micro cap financings. It was originally known as Thomas James Associates, Inc before they acquired H.J. Meyers & Co, Inc. The firm had a reputation of being a boiler room that operated within the realm of unscrupulous policies, stock manipulation, fraudulent, high pressure sales tactics and excessive markups were common.

L.F. Rothschild was a merchant and investment banking firm based in the United States and founded in 1899. The firm collapsed following the 1987 stock market crash.

Shearson

Shearson was the name of a series of investment banking and retail brokerage firms from 1902 until 1994, named for Edward Shearson and the firm he founded, Shearson Hammill & Co. Among Shearson's most notable incarnations were Shearson / American Express, Shearson Lehman / American Express, Shearson Lehman Brothers, Shearson Lehman Hutton and finally Smith Barney Shearson.

Loeb, Rhoades & Co. was a Wall Street brokerage firm founded in 1931 and acquired in 1979 by Sanford I. Weill's Shearson Hayden Stone. Although the firm would operate as Shearson Loeb Rhoades for two years, the firm would ultimately be acquired in 1981 by American Express to form Shearson/American Express and three years later Shearson Lehman/American Express.

Cogan, Berlind, Weill & Levitt, originally Carter, Berlind, Potoma & Weill, was an American investment banking and brokerage firm founded in 1960 and acquired by American Express in 1981. In its two decades as an independent firm, Cogan, Berlind, Weill & Levitt served as a vehicle for the rollup of more than a dozen brokerage and securities firms led by Sanford I. Weill that culminated in the formation of Shearson Loeb Rhoades.

Shearson was a well-known brand in the financial services industry from 1901 through 1993, related to the following:

Edward Shearson

Edward Shearson was a banker, millionaire and founder of Shearson, Hammill & Co., which was among the largest brokerage and investment banking firms in the United States.

Hornblower & Weeks was an investment banking and brokerage firm founded by Henry Hornblower and John W. Weeks in 1888. At its peak in the late 1970s, Hornblower ranked eighth among member firms of the New York Stock Exchange in number of retail offices, with 93 retail sales offices located in the United States and Europe.

Peter A. Cohen is the chairman and CEO of Andover National Corporation, a public holding company. He was formerly the chairman and CEO of Cowen Inc., also known as Cowen & Company. Prior to his current role, Cohen founded Ramius Capital Management in 1994, a $13 billion investment firm, which he merged with Cowen Inc. in 2009. Prior to this, Cohen was the chairman and chief executive officer of Shearson Lehman American Express from 1983 through 1991.

Hammill is a surname. Notable persons with that surname include:

Alger "Duke" Chapman Jr. was the President and CEO of Shearson, Hammill & Co. and Chairman and CEO of the Chicago Board Options Exchange from 1986 to 1997.

John Langeloth Loeb Sr. was an American investor and executive who served as president of Loeb, Rhoades & Company.

References

  1. 1 2 Investment bankers and brokers of America. 1922. p.247
  2. A thousand American Men of Mark of Today. 20th Edition, 1917. p.323
  3. Markham, Jerry W. A financial history of the United States, Volume 3. 2002, p. 86
  4. Commercial Classics: Shearson Hammill Commercial
  5. Benn, Alec. The unseen Wall Street of 1969-1975: and its significance for today. 2000, p.48
  6. WALL STREET: A Private Depression. TIME, Apr. 16, 1973
  7. Shearson Lehman Brothers Company History. Funding Universe
  8. The Urge to Merge. New York Magazine, May 28, 1979, p. 13
  9. Loeb Capital Partners timeline Archived 2012-02-27 at the Wayback Machine
  10. Shearson Name may Disappear. New York Times, November 10, 1993
  11. "Salomon Smith Barney" from Gambee, Robert. Wall Street . W. W. Norton & Company, 1999. p.73