The early days of Goldman Sashs

Goldman Sashs is a 120 plus year firm, started by a Jewish European immigrant.

In 1848, Marcus Goldman, a 27-year old teacher, left Bavaria for America among the first major Jewish migration. He had no connection in financial world in New Jersey, where he first settled. He started as an itinerant merchant peddler. Later he married Bertha Goldman, no relation, then they moved to New York in 1869.

After the Civil War ended in 1865, interest rates were high. Goldman developed a mercantile paper business, similar to today's commercial papers, in amount ranging upward from $2,500. His role was a middleman between commercial banks, the lenders, and the merchants, the borrowers. Because commercial banks didn't have their loan distribution branches. Goldman spot this opportunity to begin his proprietary commercial paper business. Goldman's customers were jewelers in lower Manhattan and leather merchant congregated on John Street. These groups did their business with minimum capital, so money lending at high turnover was profitable for Goldman. His business would was either bought the merchant's promissory paper at a discount of 8 to 9 percent per annum or worked on a consignment fee of half a one percent. Then he would sell these papers to commercial banks with some profits.

In 1870, he had developed enough business to hire a part-time bookkeeper and an office boy.

In 1882, his annual profit approached $50,000. Goldman brought in Samual Sashs, his son-in-law as his junior partner and named the firm M. Goldman and Sashs. In the first 50 years all partners were members of a few intermarrying families and businesses were conducted by consensus.

By 1890s, Goldman was already the largest dealer in commercial papers with sales doubled from $31 million in 1890 to $67 million in 1894. Two years later, Goldman joined the NYSE. They changed their name to Goldman & Sashs Co.