it is a dangerous supplement. >> roger you are the one that knows he is mendacious. >> i am judging his words and his actions. >> we will have a cocktail and take it outside. [laughter] maybe take it outside in the rest of us will have a cocktail. i will close by saying first of all thank you to both of you and we can continue a discussion at another time about -- hold on, hold on. we can continue the discussion discussion another time about the motives and manifestations that you all to both agree on this political system of ours that is very problematic. so you say the big thing that is hard to move. and you say it is the hopelessly

corrupt political system so i think all of us want to do something to fix that. so leaving the motive etc. out of this particular presents you say organize, you say organized and right and it seems like something all of us can together try to move the whole system and is the agenda projects as politicians are the least important part of politics that we do need to take that whole playing field and move it in a different direction. thank you all for your guidance and your insight. thank you very much. [applause] >> you roger hodge is a former editor-in-chief of "harper's magazine." for more information visit his web site, r hodge.wordpress.com. >> up next june breton fisher granddaughter of henry goldman co-founder of henry sachs talks about mr. goldman's life, the ration of the investment firm and founding of wall street.

ms. fisher spoke at the beverly hills hotel in california. this is just under a half hour. >> thank you very much, vinyl and thank you all for joining me today. my name is june breton fisher as she just told you, but i once was june goldman and i am the granddaughter of henry goldman. if you were expecting to hear a see all, tell tell-all about how goldman sachs makes all that money and until recently appeared to keep its hands clean, i am afraid you will be disappointed. maya book, "when money was in fashion," which i have somewhere here, was recently published by palgrave macmillan. it is a biography and memoirs my grandfather who was the son of the founder, marcus, and a farmer from the chinese village

in bavaria who came to the states in and the great immigration wave of 1848. henry goldman and revolutionize the financial world by developing a modern method of financing for congress and industry which today is known as the ipo. in a day when there were no pcs, no internet, no e-mail or even adding machines, when business was developed solely with talent, imagination and brains, he became america's first investment banker. and yet he guarded his private life so jealously that he remained remained an enigma to the thousands of people whose lives he influenced and enriched and many of the hedge fund managers and traders who work at the farm today cannot even place his name. he was responsible for the initial underwriting of more than 50 of our countries most successful publicly owned

corporations including general sigar, sears roebuck, the underwood typewriter company, studebaker, fw walworth, bfgoodrich and the brown shoe company and served on all of their boards of directors without except in recompense. few today know he was also a collector of major renaissance art. the patron of outstanding classical musicians including menuhin, a sponsor and friend of groundbreaking physicist, among them albert einstein, auto stern and max born, and adviser to the bagging world in both the u.s. and germany before and after world war i and the philanthropist who rescued many intellectuals and jewish from nazi germany and the 1930s.

remarkably, many of the achievements for which he was notable occurred while he was losing his sight. henry was 28 when he was invited to join goldman sachs. 10 years have passed since his father marcus dropped out of harvard due to his failing eyesight and hired his sister louisa's husband sam sacks as his assistant. marcus' father a schoolmaster had been friends since their school days in germany and this was the second marriage which had taken place between sons and daughters of the two families. henry had undoubtedly anticipated if anyone were to be offered the job, it would be he. hurt and disappointed he decided to accept an offer to join a firm as a salesman.

as it turned out the experience provides him with an education far beyond what he might have attained at harvard. for the first time since he was a traveling salesman, he was able to see the mom-and-pop stores, the small-town banks, the little machine shops that that.the countryside and perhaps even visualize a financial structure that would transform them into the building blocks of the economy. a year and a half later, marcus goldman had virtually accrued over $100,000 in capital and was turning over 30 million a year. he was so overloaded with work and so pleased with sam's performance that he offered to let him buy a partnership for $25,000. from then on the business was known as goldman sachs ann and for almost 50 years of the partners are members of the intermarried families.

the major force of their assets was tied up in the firm, providing working capital as well as savings. marcus also agreed that no one was allowed to withdraw money from the firm without making a formal petition to the senior partners and all the partners needed to be in agreement before making investments on behalf of the firm. and so it remained when joe goldman went public 100 years later and totally changed its face. when henry joined the firm he was named the junior partner. sam but then had risen to the position of the sole senior partner and adding insult to injury hired his brother, harry, and then his three sons as roker's. soon afterward he meant them junior partners. this infuriated henry who was by now married and the father of three small children.

he viewed the imbalance of power and money has thoroughly unjust they believe to which he held fast until marcus died and he became coleader with his brother-in-law. by that time he was 43. there were signs of trouble brewing from the non-before he and sam were polar opposites in every way and couldn't reach agreement on anything except the preservation of the firm's good name. rather than having civilized compositions in an attempt to reconcile their differences, they were confident -- there were heated arguments, name-calling and shouting matches all day long. it is surprising that the firm survive let alone that it thrived. but thrived it did with sam frequently traveling to london seeking to expand goldman's trading currency exchange and henry becoming an extremely successful speculator and go road bonds. so successful that he wanted

goldman sachs to underwrite new railroad issues themselves. he never foresaw that the firms which held a virtual lock on the railroad finances would resent his intrusion into their territory and offered to buy out his investments instead. henry's brother julius, the goldman sachs attorney, recommended henry investigate other avenues for building business and avoid rocking the boat. the firm in fact all of wall street owes julius a vote of thanks for the turndown resulted in henry identifying a groundbreaking new investment opportunity in the small manufactures and retailers who were turning to wall street for capital to expand. he persuaded his good friend phillip lehman whose family were the countries leading cotton brokers, to join him in underwriting issues in these firms and turning them into the

first publicly owned companies in america. goldman sachs would come up with the clients and lehman would divert some of the family's fortune from a commodities market to provide the money. the potential was immense. they sealed the deal with a handshake. once the agreement was finalized they still needed to figure out how to price the new securities. henry thought they should be valued at their earning power, the rate at which they turned over inventory and generated cash rather than their physical assets like steel and railway shares. this was an entirely new concept of financing commerce and probably the only way that start up companies long on goodwill but short on material holdings could be marketed to an uninitiated public. can recall that the price earnings ratio and determined it

by dividing the company's closing market price by its per-share earnings. all me now due to the ascendance of rapidfire computer-driven training has a relevance of the pe ratio which parse the track record of public traded companies for a century been challenged as leverage long and short-term preferred stock and free cash flow factored into their forecasts for the future. can i have my iced tea please? in 1904 when united sigar the largest independent tobacco company in the country came to goldman sachs for a bridge loan of $20 million to build more factories and enlarge their sales force, henry decided to make them the guinea pigs for testing his new theory. in less than an hour he sketched

out on a lined yellow pad the basic elements of issuing common and preferred stock. marketing took a little more time. a great deal of the preferred was sold in europe through sam's banking contacts abroad and subsequently resold to american subscribers. goldman and lehman retained 5% of the common as a commission. their next project was sears roebuck. sears and his partner julius rosenwald who were turning over 50 million a year with their catalog business were in the midst of constructing the largest business building in the world, covering a million square feet of floor space on chicago's west side. it had originally been funded by goldman sachs commercial papers and now they came back to goldman for a 5 million-dollar

loan. but henry had different ideas. he recommended selling sears on the open market, making it the first publicly owned retail operations in existence. the gamble doubled the firm's investment netting a 10 million-dollar profit and turned both goldman sachs and sears into a household name. during the next 11 years, goldman and lehman underwrote a number of great companies, but the one which excited henry the most which he knew would be a new landmark in the firm's drive to the top with studebaker, which became the first automobile manufacture owned by the public. even has contentious partner was impressed by that one. as the firm's fortune assented and all the things the old-line bankers had pooh-poohed became the hot issues everyone wanted to get in on, the personal

animosities between the two brothers in law continued to deteriorate and to spread amongst their families. they came to a head in 1914 when war broke out in europe. sam sent these were emphatically pro-allied at henry who had always admired the german people's efficiency and culture felt otherwise and spoke vehemently against the british and the french, who he felt were showing their muscles to maintain their commercial supremacy. goldman sachs refrained from participating in the anglo-french bonds drive, one of only two wall street houses to do so. the other weeding being -- headlines castigated the firm and became a pariah in england. when the london press quoted henry's remarks and warned that

goldman sachs was in danger of being blacklisted in the city henry realized it was not just voicing his personal opinions but placing the firm's future in jeopardy and in 1917 he tendered his resignation and cleared out his desk, taking with him 15 of the corporate clients for whose fortunes he had been responsible, along with his considerable share of the firms funds. although professing release and reiterating how embarrassed they were by henry's pro-german stance the sex family never forget him. henry and sam never spoke again nor did he and his sister louisa the sex' told everyone he withdrawn from the world of finance has was living in disappointed retirement in germany which could not have been further from the truth. and then they began to applaud every trace of him from goldman

sachs' records. almost 100 years had passed when i try to interview members of the sex family for this book. some profess they didn't know they were related to the goldman's. others retreated to a newly adopted mantle of protestantism, rejecting their roots in judaism along with their family tree. one great grand niece living -- such ill will against henry said she kept a scrapbook full of newspaper clippings chronicling tape it's at this daily life from the over-the-top wages he paid his domestics to the amount he paid for the god he gave albert einstein on his 50th birthday. she also referred to a sighting of henry marching in a pro-german parade at the beginning of world war i which he was unable to substantiate. in actuality henry was surprisingly believed to be

released from the pandora's box that the office and spend his time on other interests dear to his heart. he began to indulge a long-held passion for assembling what was arguably one of the finest small collections of renaissance and early flemish art in the country. unlike the collectors of today, he had no interest in buying the auction galleries flavor of the month and selling them at a huge profit. once he made a purchase it was his for keeps and it was displayed in his fifth avenue apartment to be enjoyed and admired by his friends and family, period. he felt an emotional as well as an intellectual tied to each of the pieces and was so thrilled by his first major acquisition, rembrandt portrait of the apostle bartholomew, that he couldn't sleep for nights on end. among his purchases were works by franz halls, vandyke,

donatello's madonna and child, and. he particularly treasured a small bronze" by the 16th century sculpture so we need which he kept on his desk to his dying day. my book also tells the story of the convoluted relationship between goldman, his dear friend sir joseph to being who is the most influential art dealer of the 20th century and bernard berenson, the foremost authority on renaissance art who compromise his capability by attributing works of art according to the state of his pocket book. there was of course no buying or selling a fine art during world war i, when the hostilities ended and the versailles treaty had been signed, henry's first priority was to help resurrect the german economy, which had been completely wrecked by the harsh reparations terms.

inflation in germany raged rampant and the mark had no value at all. henry campaigned vigorously amongst the wealthy wall street bankers urging them to invest in german industries, mortgages and construction. his efforts were so successful that president von hindenburg gave him on a rare he german citizenship but they also backfired when small businesses which were virtually wiped off the map. their middle-class owners became amongst hitler's most vocal supporters in the years to come. in 1924, henry made the acquaintance of albert einstein at an elite banquet of bankers held in berlin. goldman and einstein hit it off famously and began a lifelong friendship. henry was fascinated by the professor's description of experiments in quantum mechanics being conducted by max horn.

the future nobel prize winner and some of his students who included robert oppenheimer at the university of cottingham. the subject was very controversial at the time and einstein was unconvinced of its validity. nevertheless goldman gave borne over $1000 to continue his research, which resulted in the development of atomic fission 25 years later. in 1931 when einstein concluded he could no longer live in the hostile atmosphere of nazi germany, henry introduced him to accept a post at the formative institute for learning and princeton, but after a year feeling the controlling president of the institute was enforcing intolerable demands on his personal freedom, the professor threatened to leave. henry attempted to intercede and persuade him otherwise, but his

efforts became pointless as naziismism spreading hitler rose to the presidency of germany ruling out alternative options for einstein. henry was still convinced the nazis were just a passing phase until the night 40,000 ordinary citizens looted libraries in private homes and tossed armlets of books into a huge bonfire facing the berlin opera house. meanwhile, as the world turned totally dark for him, henry became more deeply involved in his passion for music. they attended three times a week in dresden, berlin and new york and were great fans of the opera. their social circle grew to include such luminaries of the concert world as tuscany needs, the great leader singer ellena

gerhardt and the distinguished violinist zimbalist and fritz chrysler. when henry attended the first concert at carnegie hall, he was told that the youngster was playing on a borrowed instruments. he decided on the spot to make the best even better and presented the boy with a $60,000 stradivarius. it was just weeks after black friday when wall street suffered its great collapse, but henry's resources have not been significantly affected. thanks to the conservative investments philosophy. when friends commented on his magnanimity, he responded i like to make money but i like even more to see that money used to make the world a better place. it wasn't until 1932 when he paid what would be his last visit to germany that he

realized how much things have changed there. brownshirts wearing swastikas on their sleeves were posted outside of jewish owned stores. at jewish pharmacies have been forced to close and the civil liberties of jewish and liberals have been totally eliminated. old friends began associating with him and in spite of the fact he carried the white cane of a blind man he was pushed and shoved in the street. to raw anti-semitism made him -- with his own feelings about judaism. he had disassociated himself from formalized religion of any sort since he was a little voice now he began to question the moral obligations that went hand-in-hand with the fortune he had pursued and achieved and the relevance of the world of investment banking it created. he wrote hundreds of letters to

influential contacts at home and abroad, seeking exit visas and immigration papers for scientists, scholars, physicians, artists and authors and especially children attempting to flee the impending holocaust and encouraged other journalists -- jewish bankers who have paid money and political clout to get things done to do the same. his wife babette estill remembered by the q gym m is a phenomenal fund-raiser for the cause collecting many thousands of dollars by personally appealing to the wives of wealthy wall streeters. he died in his fifth avenue apartment in april of 1937 surrounded by the paintings and sculptures he loved so well, leaving instructions for his heirs to destroy his private papers. he had no regrets and felt no sympathy for those who lost over

$10 million in the great depression because they have foolishly followed in the footsteps of others and failed to do their homework. he could only wonder and hope that goldman sachs, his father's creation and the firm he had transformed would regain its lofty heights some day and reestablish the culture with which it had originally been identified. he certainly would never have recognized it as it exists todak holding company which was sued for fraud by the sec and find -1/2 billion dollars for his its complicity in the recent mortgage crash as well as paying $31 million to the u.k. financial services authority conceding the company made a mistake and regulatory disclosures about london traders without a doubt, my grandfather

would never have participated in financial instruments which he did not fully understand himself as coleader of a small closely held partnership consisting largely of family members he would have shaken his head in amazement at today's multitude of hard nurse and their salaries and bonuses which exceed the treasuries of many foreign countries. however, i think you would find it quite amusing that people now refer to the firm is simply goldman, although no goldman has worked there since 1917 and it is unlikely that one never will again. [applause] >> i will be very happy to receive questions from the floor if you have some. yes, sir.

>> are you familiar with the book -- and if so can you just talk about how that relates to you and growing up? was it was like growing up the granddaughter facts be it was a very privileged life. we were brought up is very ordinary kids and we didn't go around flashing our wealth. in fact my schoolmates and a school in new york, never thought of our family is being rich. that it was an interesting book much of which remains on the research on the oral history of walter sachs who was a son of samuel sachs and i also went to the archives at austin university in columbia and gleaned a lot of information from that.

it is an interesting though quite different story than the one i have told. does that answer your question? sort of? anybody else? >> if there are no more questions then let me do a something here and acknowledge something to katherine. june has donated a book, her book, to the rotary club in our private library for rotary, and i have a little presentation. one of the things that polio -- good rotary does is try to eliminate polio in the world and our polio plus program collects funds. we had been instrumental in eliminating polio from all the countries in the world except about four. there are four countries we are

still working on but in recognition of your speech today we are going to make a donation to the polio plus program and here is a little plaque to commemorate. >> very special. thank you area much. [applause] >> "the mendacity of hope" was published by palgrave million. to find out more visit u.s. macmillan.com. >> we are here the national press club talking with author ted gup about his new book a secret gift. can you tell us what is the secret gift? >> the secret gift was a gift made in the depth of the great depression in 1933 i an anonymous donor to 150 families and his identity remained unknown for 75 years. two years ago is the case was handed to me that contained hundreds of letters from that period and the identity of that secret donor who was my grandfather.