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The Partnership

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The Partnership

The Making of Goldman Sachs

Penguin,

15 min read
10 take-aways
Audio & text

What's inside?

A commitment to excellence was always Goldman Sachs’s wisest investment as it grew and prospered.

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Editorial Rating

8

Qualities

  • Analytical
  • Scientific
  • Background

Recommendation

Every great company invariably encounters crises that can cripple its growth or propel it to greatness. Goldman Sachs, the biggest name in investment banking, has survived, though other titans, such as Bear Stearns, have fallen. However, Goldman Sachs became a traditional bank holding company amid 2008’s tumult on Wall Street and is no longer an investment bank. Charles D. Ellis, a strategic consultant to Goldman Sachs and other financial firms for more than 30 years, has written an exhaustive company history. He analyzes the firm’s numerous triumphs and notable missteps. He shines a spotlight on the powerful personalities who shaped the firm’s development over 140 years, including several men who went on to play major roles in the U.S. government. This detailed portrayal of pivotal individuals includes revealing anecdotes, and provides insight into the formation of Goldman Sachs’s unique culture and philosophy. At more than 700 pages, including extensive notes, the book requires a serious commitment, but getAbstract believes this absorbing history will reward you amply for your time.

Summary

The Founder

Marcus Goldman came to the U.S. from Bavaria at 27 years old in 1848 “as part of the first major Jewish immigration to America.” He purchased “paper” (mercantile promissory notes) from stores and sold it to commercial banks. In 1882, with annual profits around $50,000, Goldman made his son-in-law, Samuel Sachs, a junior partner, and renamed the firm M. Goldman and Sachs. Marcus’s son, Henry, and Samuel’s son, Walter, succeeded the firm’s leaders.

“By the 1890s, Goldman Sachs was already the nation’s largest dealer in commercial paper, with $67 million in sales in 1894.” The firm entered the investment banking business, and underwrote both United Cigar and the fledgling Sears Roebuck. Goldman Sachs developed a mutually beneficial relationship with Lehman Brothers, which had money to invest and benefited from Goldman Sachs’s ability to provide clients.

World War I marked the end of the relationship between Walter Sachs’s son, Samuel, and Henry Goldman, who shockingly supported Germany despite his family’s efforts to convince him to tone down his public pronouncements. America entered the war in 1917, and Goldman abruptly ended his 35-year tenure “the...

About the Author

Charles D. Ellis, a longtime Goldman Sachs strategy consultant, is the author of 14 books.

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