Lehman Hall on the Williams campus is named after Herbert H. Lehman ’99, the son of Meyer Lehman, who, along with his brothers Emmanuel and Henry, founded Lehman Brothers. The building bearing the Lehman name was completed in 1928, at the very height of a prolonged stock market boom. The Lehman Community Service Council is also, I think, named after Herb Lehman – along with a college, a couple of high schools, numerous buildings at other colleges, and a library and professorship at Columbia. Herbert Lehman ’99 was one of those people that get many things named after them.

He worked at Lehman Brothers after graduating from Williams, but spent most of his adult life in public service. He was part of the General Staff Corps in Washington during World War I; after the end of the war, he worked for Al Smith’s gubernatorial and presidential campaigns, and served as Lt. Governor to FDR. After Roosevelt’s election to the Presidency in 1933, he became the Governor of New York, and was a very popular chief executive, with a reputation for nonpartisanship.

As Governor, Herbert Lehman was heavily involved in trying to mitigate the banking crisis of the 1930’s, shutting New York’s banks to try to avert a panic in March 1933. In an eerie premonition of this weekend’s meetings, he also tried, unsuccessfully, to organize a Wall Street rescue of the Bank of the United States in 1930; the failure to reach an agreement caused the largest bank failure in US history up to that point, one of the first large commercial bank failures of the Depression; depositors were not made whole, and the ensuing fear and hysteria led to thousands of other banks collapsing over the next few years (cf: Ron Chernow’s The House of Morgan, pp. 320-360).

During World War II, Herbert Lehman resigned his governorship to head the United Nations Relief and Rehabilitation Administration (UNRRA), an agency set up to assist citizens of nations that had been occupied by the Axis powers. He became a Senator from New York in 1949; in the Senate, he was a vocal critic of McCarthyism, voting for McCarthy’s censure, and was a strong supporter of Truman’s liberalism.

Towards the end of his life, he continued to work as an activist and reformer within New York’s Democratic party, alongside Eleanor Roosevelt. He was awarded the Presidential Medal of Freedom in 1963, but died the day before the award ceremony, which took place on December 6 – just two weeks after JFK’s assassination. This was the citation that was read for Herbert Lehman in absentia by President Johnson: “Citizen and statesman, he has used wisdom and compassion as the tools of government and has made politics the highest form of public service.”

No one can hope for a better epitaph.

This weekend, the firm that Herbert’s father and uncles founded went out of business. American finance is being shaken to its core, and fear and foreboding have Wall Street in their grip. Lehman Brothers started as a dry-goods store in Montgomery, Alabama, and rose to become a storied investment bank. In partnership with Goldman, Sachs and Kuhn, Loeb (which it absorbed in the 1970s), it helped to finance many nascent industries over its 158-year history. The three Jewish banks did banking work for unglamorous and risky companies in retail, oil, and broadcasting; they promoted up-and-coming stocks, like Macy’s and RCA, that the Anglo half of Wall Street (the Morgans in particular) would not touch. They were risk-takers in the very best sense of the term. On 9/11/2001, Lehman Brothers survived a direct hit to its headquarters at the World Trade Center. Exactly seven years later, it was destroyed by the natural processes of the market and by its own derivatives and leverage. There is a crude analogy to be drawn here, but I won’t go there.

It is a near certainty now that Lehman’s 26,000 employees (including a significant number of Ephs) will lose their jobs. The impact on the financial system will be extremely serious (though you wouldn’t know it from watching the evening news, which has spent more time covering political nonsense). Many employees will lose both their jobs and their savings, because they were compensated in stock. This is the toughest, most challenging situation the financial system has seen in a very long time – if we are to believe Alan Greenspan, it is the worst financial crisis since the Great Depression.

We’ll reckon the wider economic fallout from this in due time; now, however, I’d just like to wish good luck to all Lehman employees, and goodbye to the Lehman name. One might be tempted to say, sic transit gloria mundi, were it not for the buildings and schools named after Herbert. Those will continue to stand, at least for the time being.

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