Brown Brothers Harriman history

A private banking firm founded in Baltimore in 1800 by Alexander Brown, an Irish immigrant, as a trading company specializing in textiles. His sons opened more branches of the house in other eastern cities and gradually moved into banking. The first branch was John A. Brown & Co., opened in Philadelphia in 1818. A New York office, Brown Brothers, was opened several years later and became the flagship for the other houses, which eventually closed down, leaving Brown Brothers as the premier private bank in New York before the Civil War.

A keen student of economics, Alexander Brown died in 1834. As a sign of respect for his efforts in keeping Baltimore and Maryland solvent in the wake of Andrew Jackson’s refusal to extend the charter of the Second BANK OF THE UNITED STATES, all ships in Baltimore harbor lowered their flags to half-mast upon learning of his death. The firm remained under the control of family members well into the 20th century. Alex. Brown & Sons remained in Baltimore as a brokerage and is today a subsidiary of Deutsche Bank, which bought it in 1997.

The Liverpool branch of the bank was in financial difficulties in 1837 as a result of a panic in the United States, which severely affected British-American trade, and had to be bailed out by the Bank of England, with guarantees from Peabody & Co. in London, the predecessor of J. S. Morgan & Co. During another panic 20 years later, Brown Shipley, as the British firm became known, returned the favor and made a loan to allow Peabody to remain afloat after falling upon hard times.

Brown Brothers became the major private bank in the country in the 19th century until the emergence of Drexel Morgan & Co. in the 1880s. It engaged in banking, securities, and trade finance. Before the Civil War, it helped finance North Atlantic shipping, becoming principal owner in the Collins Line, a major North American shipping company sailing the North Atlantic. Several family members perished with the Artic, a transatlantic steamship that sank off Newfoundland in 1854, the greatest passenger shipping disaster prior to the sinking of the Titanic. After the war, Brown Brothers became the target of the muckraking efforts of Elizabeth Cady Stanton and Parker Pillsbury, who charged the Browns with mismanagement of the line. The firm also became involved in railroad financing after the war.

Need for additional capital required it to merge with Harriman banking interests in 1930, and it became known as Brown Brothers Harriman. The Glass-Steagall Act of 1933 forced the bank to give up its securities operations, which were spun off to Brown Harriman & Co., later to become Harriman Ripley & Co. One of its partners at the time was Prescott Bush, father of future president George H. W. Bush and grandfather of George W. Bush. But it remained a private bank and as such was able to retain its seat on the NEW YORK STOCK EXCHANGE. It remains one of the few private banks existing today, specializing in investment management and international finance in addition to private banking.