.. >> this is just under a half hour. >> thank you very much, lionel, and thank you all for joining me today. my name is june i breton fisher as he just told you, but it once was june goldman, and i am the granddaughter of henry goldman. if you were expecting to hear a see-all, tell-all about i how goldman sachss makes all that

money and until recently appeared to keep its hands clean, i'm afraid you'll be disappointed. my book, "when money was in fashion," which i have somewhere here -- was recently published by paul grave mcmillan. it is a biography and be memoir of my grandfather who is the son of the firm's founder, marcus, a poor farmer from a tiny village in bavaria who came to the states in the great immigration wave of 1848. henry goldman revolutionized the financial world by developing a modern method of financing for commerce and industry. which today is known as the ipo. and in a cay when there were no -- 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 an enigma to the thousands of people whose lives he influenced and enriched, and many of the hedge fund managers and traders who work work at the firm today cannot even place his name. he was responsible for the initial underwriting of more than 50 of our country's most successful publicly-owned corporations including general cigar, searses row buck, the underwood typewriter company, may department stores, studebaker, f.w. wool worth, bf goodrichrich, and the brown shoe company. and served on all of their boards of directors without accepting recompense. few today know that he was also

a collector of major renaissance art. the patron of outstanding classical musicians, a sponsor and friend of ground breaking physicists, among them albert einstein, otto stern and max bourne, and can adviser to the banking world in both the u.s. and germany before and after world world war i. and a philanthropist who rescued many jews and intellectuals from nazi germany in the 1930s. remarkably, many of the achievements occurred while he was losing his sight. henry was 28 when he was invited to join goldman sack. -- goldman sachs. ten years had passed since his father, marcus, had shunted him aside after he dropped out of harvard due to failing eyesight and hired his sister's husband

as his father. marcus' father was the second marriage which had taken place between sons and daughters of the two families. henry had undoubtedly anticipated that if anyone were to be offered the job, it would be he. hurt and disappointed, he decided to accept an offer to join a soft good firm as a salesman. as it turned out, the experience provided 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 tores, the small town banks and perhaps even then to visualize a financial structure that would transform them into the building blocks of the economy. a year and a half later marcus

goldman had personally accrued over $100,000 in the capital and was turning over 30 million a year. he was so overloaded with work and so leaded with sam's performance -- 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 and company, and for almost 50 years all the partners were members of the intermarried families. the major portion of their as is ets was tied up in the firm providing working capital as well as savings. marcus also decreed that no one was allowed to withdraw money from the firm without making a formal we -- petition to the senior partners, and all the partners needed to be in agreement before making investments on behalf of the firm. so it remained until goldman went public 100 years later and totally changed it face.

when henry joined the firm, he was named a junior partner. sam, by then, had risen to the position of sole senior partner and adding insult to injury, hired his brother harry and then his three sons as brokers. soon afterward he made 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 as thoroughly unjust, a belief to which he held fast until marcus died and he became co-leader with his brother-in-law. by that time he was 43. there were signs of trouble brewing from then on. for 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

conversations in an attempt to reconcile their differences, there were constant heated arguments, name calling and apoplectic shouting matches all day long. it is surprising that the firm survived, let alone that it thrived, but thrive it did with sam frequently traveling to london seeking to expand goldman's trade in currency exchange and henry becoming an extremely successful speculator in railroad 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's finances would resent his intrusion into their territory and offer to buy out his investments instead. henry's brother julius, goldman sachs' attorney, recommended that henry investigate other avenues for the new business and be a concern and avoid rocking

the vote. 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 manufacturers and retailers who were turning to wall street for capital to expand. he persuaded his good friend, phillip lehman, whose family were the cup's leading cotton brokers, to join him in underwriting issues 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 the commodities market to provide the money. the potential was immense. and the two houses would share the profit of 50/50. 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 by their earning power, the rate at which they turned over inventory and generating 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. henry called it the price earnings ratio and determined it by dividing the company's closing market price by its per-share earnings. only now due to the ascendance of rapid-fire computer-driven trading has the relevance of the pe ratio been challenged as leverage long and short-term debt, preferred stock and precash flow are factored into

their forecasts for the future. could i have my iced tea, pleasesome concern please? in 1904 when united cigar -- thank you -- the largest independent tobacco company in the country -- thanks. 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 the shares took a little more time. a great deal of the preferred were 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. searses and its partner julius rosen wald 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 paper, and now they came back to goldman for a $5 million loan. but henry had different ideas. he recommended selling shares on the open market, making it the first publicly-owned retail operation in existence. the gamble doubled the firm's investment netting a $10 million profit and turned both goldman sachss and searses into household names -- sears into household names. 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 was studebaker which became the first automobile manufacturer owned by the public. even his contentious partner was impressed by that one. as the firm's fortune ascended and all the things that 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's sympathies were emphatically pro-allied, but 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 muscle to maintain their commercial supremacy. adhering to marcus' bylaws, goldman sachs refrained from participating in the anglo-french bond drive, one of only two wall street houses to do so, the other one being -- [inaudible] headline cast dated the firm -- castigated the firm, and it 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 that he 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 firm's funds.

although professing relief and reiterating how embarrassed they were by henry's pro-german stance, the sachs' family never forgave him. henry and sam never spoke again, nor did he and his sister, luis saw. the sachs' told everyone he had withdrawn from the world of finance and was living in this disillusioned retirement in germany which could not have been further from the truth. and then they began to blot every trace of him from goldman sachss' records. almost 100 years had passed when i tried to interview members of the sachs family for this book. some professed they didn't even know they were related to the goldmans. others rejected their roots in judaism along with their fall hi tree. family tree. one great grand niece living on sutton place still harbored such ill will against heck ri, that

she kept a scrapbook full of newspaper clippings chronicling tidbits of his daily life from the over-the-top wages he paid his domestics to the amount he paid for the yacht he gave albert einstein on his 50th birthday. she also referred to a sighting of henry mar anything a pro- marching in a pro-german parade at the beginning of world war i which she was unable to substantiate. in actuality, henry was relieved to be released and spent 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 rein sans and early -- 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 then 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 tie to each of the pieces and was so thrilled by his first major acquisition -- rembrandt -- that he couldn't sleep for nights on end. among his purchases were works by van dyke, done tell low's madonna and child. he particularly treasured a small bronze ink well by the 16th century sculptor celline 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 levine who was the most influential art dealer of

the 20th century and the foremost authority on renaissance art who compromised his capabilities by attributing works of art according to the state of his pocketbook. there was, of course, no buying or selling of 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 wealthy wall street bankers or urging them to invest in german industries, mortgages and construction. his efforts were so successful that president von hinten berg gave him honorary german citizenship, but they also backfired with small business which were virtually wiped off

the map. their middle class owners became amongst hitler's most vocal supporters in 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 ban a lifelong friendship -- began a lifelong friendship. henry was fascinated by the professor's description of experiments in quantum mechanics being conducted by max bourne. the future nobel prize winner and some-his students who included robert oppenheimer at the university of gottingham. the subject was very controversial at the time, and einstein was uni convince -- unconvinced of its validity. nevertheless, goldman gave bourne over a thousand dollars to continue his research which resulted in the development of atomic fission 25 years later. in this -- in 1931 when einstein

concluded he could no longer live in the hostile atmosphere of nazi germany, henry induced him to accept a post at the formative institute for learning in princeton. but after a year feeling that 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 p otherwise, but his efforts became pointless as nazism spread and can 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 and private homes and tossed armloads 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 this his wife's passion for music. they attended concerts three times a week in dresden, berlin and new york and were great fans of the opera. their social circle included us the ca anyoneny, gearhart and the distinguished violinist ephraim. at carnegie hall he was told that the youngster was playing on a borrowed instrument, he decided on the spot to make the best even better or and presented the boy with a $60,000 separate varian yus. it was just weeks after black friday when wall street suffered

it great collapse, but henry's resources had not been significantly affected. thanks to his conservative investment philosophy. when friends commented on his magnanimity in such tough times, 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 192 3 -- 1932 that he realized how much things had changed in germ think. brown shirts wearing swas cas on their sleeves were posted outside jewish-owned stores. jewish pharmacies had been forced to close, and the civil liberties of jews and liberals had been totally eliminated. old friends avoided associating with him and in spite of the fact that he carried the white cane of a blind man, he was pushed and shoved in the street.

the raw anti-semitism made him come to terms with his own feelings about judahism. he had dissociated himself from formalized religion of any sort since he was a little boy. now he began to question the moral obligations that went hand this hand with the fortune he had pursued and achieved. and the relevance of the world of investment banking he had created. he wrote hundreds of letters to his 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 encourage other german jewish bankers who had the money and the political clout to get things done to do the same. his wife, babs bet, is still remembered by the uja as a

phenomenal fundraiser for the cause collecting many thousands of dollars by personal hi appealing to the wives -- personally appealing to the wives of wall streeters. henry died in april 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 the sachs' who had lost over $10 million in the great depression because they had foolishly followed in the footsteps of others and failed to do their homework. he could only wonder and hope that goldman sachss, his father's creation and the firm he had transformed, would regain it 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 today, a huge publicly-held bank holding company which was sued for fraud by the sec and fined a half million dollars for its complicity in the recent mortgage crash as well as paying 31 million to the u.k.'s financial services authority conceding that the company made a mistake in regulatory disclosures about london trader fabrice, the uray. without a doubt, my grandfather would never have endorsed or participated in financial instruments which he did not fully understand himself. as co-leader of a small, closely-held partnership consisting largely of family members, he would have shaken his head in amazement at today's multitude of partners and their salaries and bonuses which exceed the treasuries of many foreign countries. however, i think he would find it quite amusing that people now

refer to the firm as simply goldman, although no goldman has worked there since 1917, and it is unlikely that one ever will again. [laughter] [applause] i will be very happy to receive questions from the floor if you have some. yes, sir. >> i have a question in two parts. first, are you familiar with the book, "our crowd" -- >> yes, i am. >> and can you talk about how that related to you and what was it like growing up the granddaughter of richard goldman? >> well, it was a very privileged life. we were brought up as very ordinary kids. i mean, we didn't go around flashing our wealth. in fact, my schoolmates at the school in new york included a vanderbilt and a few people who

i really thought was good, so i never thought of our family has being rich. that was an interesting book, "our crowd," though much of which leaned on for his research on the oral history of walter sachs who was a son of samuel sachs. and i also went the archives at boston university in columbia and gleaned a lot of information from that. it's an interesting, an interesting, though quite different story than the one i've told. does that answer your question? sort of? [laughter] if i left something out, you let me know. anybody else? >> okay. if there's no more questions, let me do a little something here and acknowledge something that happened. and june has donated a book, her

book, to rotary club to go in our private library for rotary. and i have a little presentation. one of the things that polio -- that polio, that rotary does is try to eliminate pole row in the world -- polio in the world. and our polio plus program collects funds. we've been instrumental in eliminating polio from all the countries in the world except about four. there's four country we're still the working on. but in recognition of your speech today, we're going to make a donation to the polio plus program, and here's a little plaque to commemorate. >> oh, very special. thank you so much. [applause] >> when money was in fashion was published by pal grave macmillan. to find out more visit us.macmillan.com. >> we're here at the national press club with diane rehm, npr host and honorary chairwoman of

the press club's book and author night. she is promoting her new book, "life with maxie." can you tell us what that book is about? >> maxie is a little long-haired chihuahua who came into our home seven and a half years ago when we had a big home with a big garden, and then he had to move to a condo. and it's all about life with maxie, and that move and the impact he has had on our lives. he's such a special dog. >> what are some of the changes that max is si had to become accustomed to. >> >> well, for one thing, he wouldn't walk. he wouldn't walk on a leash. so i had to push him many a stroller -- this a stroller before we left the house. he was king pa is sha, you know?

and i was the one getting all the exercise. but since we moved to the condo, he finally learned to walk. he's become friendly, he used to nip at people, and now he's the friendliest dog in the world. i could have brought him here tonight, and he would have gone up to everybody and allowed them to pet him. >> what inspired you to write about maxie? >> you know, i was speaking out in salt lake city, utah, and the publisher heard me speak about maxie and two weeks later he sent me a letter asking me to write a book. what can i say? so i wrote the book, and they assigned a photographer, and we took thousands of photographs, d