When Money Was In Fashion, my book released on April 27th, is both a biography of Henry Goldman, the son of the founder of Goldman Sachs and a memoir. I'm his only surviving granddaughter.
The book deals with Goldman Sachs at a time when its morality was unquestioned and the preservation of its pristine reputation was considered a top priority by its most senior partners, warring brothers-in-law who could agree on little else. It was a time when investment banking was a gentlemen's game; you played hard, but you played by the rules.
Although zealously shielding his private life from public view, Henry Goldman was one of the giants of Wall Street at a time when Jews were generally not accepted into the inner circle of financiers. He reshaped the world of finance in 1904 by visualizing and initiating the first public offerings of retail and manufacturing concerns, creating the financial base from which they were able to grow. Today they are known as IPOs. He also formulated the price-to-earnings (P/E) equation, which is still used today to determine the value of stocks.
He was responsible for the original underwriting of more than fifty of our country's most successful publicly owned corporations including Sears Roebuck, FW Woolworth, Studebaker, BF Goodrich and the Brown Shoe Company. A patron of the arts, he had a renowned collect ion of Renaissance art, supported classical musicians, and was a friend and adviser to famed physicists Albert Einstein and Max Born. Remarkably, many of his most notable achievements occurred while he was losing his sight.
My grandfather would not recognize the firm as it exists today, a publicly held bank holding company which has been charged with civil fraud by the SEC for selling their clients questionable securities, and whose multitude of partners receive salaries and bonuses exceeding the treasuries of many foreign countries. I think he would have been pleased and proud that its current earnings are the largest in the history of Wall Street, but would also have wondered how all that money was going to be spent. A philanthropist to his core, he was often quoted as saying that he liked to make money, but he liked even more to see that money used to make the world a better place.
In writing the book, I came to understand my grandfather and his contemporaries on Wall Street very well. Success was important, but it was by no means the high-stakes game it appears to be for many today. The financial world would do well to turn back the pages of history and emulate some of "the street's" most famous founders.