Finance History | Morgan Stanley — Thirteen People at 2 Wall Street After Glass-Steagall
· 1935-9
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Finance History | Morgan Stanley — Thirteen People at 2 Wall Street After Glass-Steagall
kevin
People treat Morgan Stanley as the Times Square tower that always ran a wealth book and an underwriting desk from an S and P 500 listing.
The first book was a statutory split of the House of Morgan.
The Banking Act of 1933, remembered as Glass-Steagall, barred a single firm from taking deposits and underwriting corporate securities.
J.P. Morgan and Company at 23 Wall Street chose the deposit bank.
On the afternoon of 5 September 1935 Thomas Lamont read a statement in the partners' room under the portrait of J. Pierpont Morgan.
Partners and staff who had run the securities side were leaving to form Morgan Stanley and Company, Inc.
Henry S. Morgan, grandson of Pierpont, and Harold Stanley headed the new house.
Capital was set at $7,500,000 in 1935 dollars, most of it preferred stock taken by remaining Morgan partners.
The office opened on 16 September 1935 at 2 Wall Street, a short walk from the parent.
Thirteen people sat at eighteen roll-top desks facing Trinity Church.
There was no ceremony.
The New York Times recorded that Stanley arrived at 9:31 a.m., declined to speak, and hung up his hat.
The mechanism was the statute itself.
A commercial bank could no longer place a steel or railroad issue.
The new corporation existed to do that work and nothing else.
In its first year the firm handled public offerings and private placements of $1.1 billion in 1935 dollars.
Bankers still walked down the block to 23 Wall Street to close a deal.
The later combination with Dean Witter and the Times Square campus are later books.
Glass-Steagall is the reason a Morgan name sits on two separate listed companies.
Photo: J.P. Morgan and Company Building at 23 Wall Street, the house that chose deposits, Irving Underhill, public domain, via Wikimedia Commons.
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