Pine and William Sts.

Pine & William Sts.

Fire engines sirened their way up to the Kuhn, Loeb building at Pine and William Streets, Manhattan, last week. People went running. There was a fire in the building basement. Firemen on trucks swore at the pedestrians. The smoke was very thick. It smelled catastrophic. Firemen on foot, carrying extinguishers elbowed/- passage through the crowds. Policemen were angry. Gum-chewers gaped. There were at least 15,000 Wall Street clerks there, crowded so thickly that they forced Kuhn, Loeb & Co.'s employes to fight their way out of the smoked banking offices to watch their own fire.

60th Anniversary. The fire damage was trivial (old boxes, rubbish and wastes in a fireproof sub-basement). Yet it caused more excitement in Kuhn, Loeb & Co.'s marbled offices than did the celebration, the same week, ef the firm's 60th anniversary. Bankers of the neighborhood, had sent in some flowers; there were felicitations; and that was all. Kuhn, Loeb & Co. employes are trained to show no emotions. They treated the $3,000,000 of South African gold their company bought last week (the largest purchase of gold from London in several months) as a bookkeeping item. Nor did they consider any more important the $95,000,000 they loaned to the Missouri Pacific Railroad.

That is the largest amount of money that any U. S. railroad has ever borrowed through a single banking house. But in the 60-year history of Kuhn, Loeb & Co., it represents but a hundredth part of their money transactions. In 1867 Abraham Kuhn and Solomon Loeb left the Jewish community in Cincinnati where they had become prosperous commission men. They realized better than most men that the Civil War meant a change to U. S. civilization, that the railroads --then grimy, haphazard affairs, spattered with tobacco juice--would become a great factor in that civilization. They went to Manhattan where Jay Gould (1836-92), James Fisk (1834-72) and Daniel Drew (1797-1879) were forcing from Commodore Cornelius Vanderbilt (1794-1877) control of the Erie, and where Commodore Vanderbilt himself was forcing his way to the control of the New York Central. When the Fisk-Gould machinations around President Grant brought on the "Black Friday" panic of 1869, Abraham Kuhn and Solomon Loeb had money. They loaned it out, and their firm has continued to loan out money. Kuhn, Loeb & Co. on its own account and in combination with other banking houses has loaned $10,000,000,000 during 60 years. Much of the money went to these railroads, among others:

B. & O. Internat. & Gt. Nor.

C. & O. L. A. & Salt Lake

Chi. & Alton Mo. Pac.

Chi. & East. Ill. N. Y. Ont. & W.

Chi., Mil. & St. P. N. O. Tex. & Mex.

Chi. & N. W. Norfolk & West.

Del. & Hud. Nor. Pac.

Denver & R. G. Pennsylvania

Gulf, Mobile & N. Sou. Pac.

Hud. & Man. Tex. Pac.

Ill. Cent. Union Pac. Wabash

And Kuhn, Loeb & Co. have been the bankers for these corporations, among others:

American Smelting & Refining

American Telephone & Telegraph

Central Leather

Inland Steel

Republic Iron & Steel

U. S. Rubber

Consolidated Coal

Famous Players-Lasky

Western Union

Westinghouse

But Kuhn, Loeb & Co.'s greatest contribution to U. S. finance has been its pioneering in great international loans. It sold U. S. securities to its European customers and European securities to its U. S. customers, when other U. S. investment dealers had no understanding of such commerce. When Japan was fighting Russia in 1905, Jacob Schiff (1847-1920) then senior partner of Kuhn, Loeb & Co. was in London. The Japanese Government wanted $50,000,000. London bankers said they would risk $25,000,000. Jacob Schiff said that his firm would take the other $25,000,000. Subsequently, Kuhn, Loeb & Co. sold $200,000,000 of bonds to finance Japan through the Russo-Japanese War.

Kuhn, Loeb & Co. has loaned money to other governments-- Sweden, Holland, Austria, Argentina, Cuba, Chile, Germany, Czechoslovakia; to foreign municipalities --Paris, Antwerp, Bordeaux, Lyons, Marseille, Tokyo, Prague, Christiania, and the Department of the Seine (France). This international banking, since the War. had become of high importance to the U. S. More money is available here for investment than can be absorbed by domestic corporations and municipalities; and to place money abroad, investors must rely upon the expertness and knowledge of reliable international banking houses. Knowing this, the Governors of the New York Stock Exchange are seeking to list foreign stocks on the Exchange (TIME, Feb. 7).

Abraham Kuhn and Solomon Loeb had faith in U. S. railroads when they began their Manhattan partnership in 1867. But their vision might have remained national, had not Jacob Henry Schiff come over from Germany and married Mr. Loeb's daughter, Teresa. The partners made a partner of the son-in-law (1875), and at the same time took into the firm another young man of financial perspicacity--Abraham Wolff. It was not long before Jacob Schiff dominated the partnership, and it was due largely to him that Kuhn, Loeb & Co. has made its close connections with European bankers. He, too, it was who fought with Edward Henry Harriman (1848-1909) against James Jerome Hill (1838-1916) and John Pierpont Morgan (1837-1913) for control of Northern Pacific in 1901. That created the great "corner" in Northern Pacific, whose shares rose to $1,000 each. But Jacob Schiff and J. P. Morgan, foreseeing panic, let the "shorts" settle for $150 a share.

Recently Kuhn, Loeb & Co. have revived their interests in the railroads of the northwest. They represented the buyers, at auction, of the $750,000,000 Chicago, Milwaukee & St. Paul (TIME, Dec. 6) and have been one of the agents for Arthur Curtiss James, greatest railroad stockholder, in his gaining control of the Great Northern and the Northern Pacific.

The men who head the firm now constitute the smallest partnership of any important Wall Street House, and continue the tradition of a closed group. James Loeb, Solomon Loeb's son, joined the firm in 1888, withdrew in 1901, to give his time to classical literature. He has been having Latin and Greek works translated into English, and has been paying all publication losses. For this activity, Cambridge University gave him its degree as Doctor of Laws (TIME, March, 23, 1925). He has long lived in Munich, Germany.

Paul Moritz Warburg is another partner who withdrew. He married Nina J. Loeb and became a partner in 1902. In 1914 President Wilson made him a member of the Federal Reserve Board, and he resigned every corporate and financial connection.

But his brother, Felix M. Warburg, who married Frieda Schiff, has remained a partner since 1897. His forte is the philosophy of money--economics. Otto Hermann Kahn, who became a partner in 1897, after his marriage to Addie Wolff, is the star salesman of the firm, the "front window." Jerome J. Hanauer might be called the mathematical genius. Few minds can match his when it is applied to railroad financing. He--a partner since 1912, and the last to be admitted--is the only one not a son-in-law or a son of earlier partners.

Mortimer Leo Schiff is the only "son"--Jacob Henry Schiff's--and he is the youngest (born 1877) of the present four partners. Like President Coolidge, Dwight Whitney Morrow, Arthur Curtiss James, Frank Waterman Stearns, Herbert Lee Pratt, Bruce Barton, Alexander Meiklejohn, the late Henry Ward Beecher, Harlan F. Stone, Frederick H. Gillett, Robert Lansing, Charles E. Mitchell, Joseph B. Eastman, Henry C. Hall, Frank J. Goodnow, he is an Amherst man. Unlike them, he was never graduated, because in his sophomore year he decided he did not want to be just a "rich man's son." He left college; got a job in a railroad office. Later Amherst gave him its Master of Arts degree. That was after he had become a partner of Kuhn, Loeb & Co., and had shown himself a master of finance.

/- Thuggish method of forcing passage through a throng. The hands are held clenched close to the chest, the elbows flexed and projected stiffly to each side of the torso. To move forward one jabs bystanders with the elbows and, as they wince, sidles through the opening.