leaving. it was a younger crowd. they were dressed differently. there were wearing face bandannas instead of surgical mask. it was such a stark condition, even not paying attention for short amount of time. so that's when i realized that oh, okay, this is going to get out of hand. >> watch the full program online anytime at booktv.org. just search julio rosas or the title of his book "fiery." >> thank you for joining us for this event featuring acclaimed author starring financial expera and founder of the progress network zachary karabell my name is jim kelly and i'm a member of the finance faculty and director of the covelli center for global security analysis. before we heard from zachary i have the happy task of reading a short welcoming remark from

being rapid chili pick in 2020 we celebrate one of years of education at fordham. since our inception we believe in the power of partnerships to inform and lead change. as we continue our mission to hafoster innovation in businesst is with honor that we continue to present these discussions in our new academic year. i would very much like to think the covelli center and a wonderful partners, the museum of american finance and the cfa society of new york were sponsoring today's conversation. the centennial series was designed to shine light on the emerging and importantnt trends. today's session features a keynote discussion with zachary karabell, historian and former financial executive and author of "inside money" a book that offers a first full and frank look inside brown brothers

harriman against the backdrop of american history. i would like to inject a little personal anecdote at this point and note that my father got his first job on wall street in 1927. so that goes back a long way but brown brothers goes back much before that. our session will take place in three parts. first, david cowan present ceo of the museum of american finance will introduce our speaker zachary karabell. then as i will deliver his address for about 30 minutes. following the talk david and i will facilitate audience questions which we would askul that you type into the q&a section at the bottom of your zoom screen. our speakers will be addressing as many as possible. also, please note that we will be distributing by lottery 100

copies of zachary these new book and you'll be notified within a week as to whether you won one of the books in the lottery. okay. before i turned over to david to introduce our speakers i want to ask you to consider making a donation to the museum of american finance or a gift to the covelli school centennial fund. you can make a a tax exempt gt quickly and securely online at the link provided in the chat. now let me turn it over to david. >> thanks, jim. always great to be back to continue this amazing and wonderful partnership with gemelli. what strikes me about zachary and looking into his background is not just incredible breadth of the endeavor he is involved in but also the incredible depth within the various sectors. his ontiveros spirit and

optimism is prevalent at zachary karabell.com which i suggest all of you check out with his quote-unquote what could go right podcast, and is jim minchin, his progressdc network. zachary and his friends are looking at things that can move our society and a more positive direction, to sum up our hopes and aspirations, and not just the fears of the constant fear mongering that seem so prevalent today. his education is from columbia oxford and harvard, the latter where he received his phd. his time on wall street included investment, president of fred alger and truly president of river twice research and capital. he's been an active contributor on tv in places like cnbc, msnbc and fox business and in print in many places like the "wall street journal," the "washington post," time. but none more important than upcoming issue of our own

magazine financialwn history. now, "inside money" isin his latest book on his 13th and the previous our wide-ranging topics like how harry truman won the 1948 election, or china america relations. brown brothers harriman is a permanent fetish on the limelight but now with this book zachary has turned a bright light on about the firm, its culture,e, its people all woven together using his words quote-unquote into the big story of the united states. so let's turn it over to the big story of the brown brothers harriman you're welcome, zachary. >> thank you so much, david. and for the introduction. i appreciate you putting this together and, of course, the covelli school and for them and jim kelly for that introduction. i'm speaking to you from the upper west side and i'm somewhat near the business school campus which i walked past with some frequency. although a bit of a neighborhooi

feel to it. i do want to thank you all for joining this midday in july. i think we are probably getting to the tail end of our resume worlds -- soon worlds where we are doing all this via one form or another. i'm sorry we can't all be together having this conversation. we'll just have to be virtually together as we have been largely for the last 18 months. so i wrote this book first as a question, and the question was how did money shape the united states? a pretty broad question and certainly not one that others haven't dealt with but one that i was particularly fascinated by. and particularly how money in the 19th century was a not necessarily unique american commodity but the united states was unique in the proliferation

of money, the prevalence of it, the plethora of paper money that floods the planes and coasts in the united united stateso the relative illiquidity of most parts of the world for most of human history. most human history, wealth is tied up in illiquid assets, land and people and stuff. and in the united states in the 19th century there was this explosion of capital which is very messy and chaotic and often hugely destructive when it deluges as well as constructive whennd it irrigates the capital system. some want to write about that and then i wanted to write about how money in the 19 century transforms into american power in the 20th and particularly how a group of financial at least in particular begin to exercise extraordinary political power at the heart of the

american government during world war ii and the cold war, andos then to transpose an american system onto the global system. so i want to write about how the men, almost all men, this is a heavily white male history, and how they been made the world of the 21st century -- of the 20th century and how we are still living in that world and what the aftermath and effects of that is in the 21st. and in that sense that some brown brothers became my topic. i was aware of the fact the was a coterie of brown brothers partners in the middle of the 20th century who go from wall street into washington, into the halls of government and in a central way. i'll get to the in a moment but those partners were able herriman who was the science of the eh harrison railroad, and his family firms merger with the more storage firm of brown

brothers in 1930 which placedic into a narrative. the partners in addition to averell harriman who go into government, herriman serves in the new deal, he comes ambassador to moscow, is one of the reasons for george kennan's dissemination of george kennan's attitudes on the cold war from his position and embassy in moscow. he become secretary commerce picky becomes the distributor of all marshall plan in europe and then of all american and governor of your new york and finally the architect of the vietnam policy. in addition there's robert libert whose name was forgot but was a major, major figure, help create the american modern air force as assistant secretary for under henry stinson during world war ii, becomes under secretary of state succeed dean acheson becomes under secretary of state to george marshall, one of the architects which is a precursor

of the wto, one of the architects of the national security state, then becomes undersecretary of defense and finally secretary of defense during the waning period of the korean war. i knew about that and i wanted to write about how the all camet to be. brown brothers became sort of the perfect aperture of the story. the exoskeleton of the ideas that i just laid out, but what became much or interesting to me as about the book and i'll see what i was not as aware of and took me a while to actually become sensitive to is thebe degree which brown brothers is a kind of quiet mover and shaker of many of the most pivotal moments in american history. .. american finance and the chief architecture of the american financial system and more importantly how their story including their contemporary evolution says a lot about how we come to define capitalism and

not all of it very and how the story offers an alternate pathway of capitalism an alternate pathway that i found much more admirable than i expected to find when i found the book and i'll conclude with. in many ways into only firm that could've told the story, then the longest surviving bank asset management, private investment firm in the united states, they date their funding from 1818 i think they're wrong about their own founding date so far the firm begins with the patriarch alexander brown who is a merchant who flees in the 1790s and loses to baltimore b and he goes from being alone in exporter to a linen importer, he brings his four sons into the family business, the brothers of the four sons of alexander brown

and the important in the brown training baltimore were alexander brown lives it had remain in the report which was english port dresses. of time you could not join atlantic trading business without having a agents in theph report. it eventually becomes the dominant house of the four branches. there is no firm that has survived from 1800 to 2021 nor does it necessarily provide any lessons. it's alsoov overly tempting to y to ascribe quality. this is what the firm did what it did and survived the way it did, there is always luck and

contingency and there plenty of familysi partnerships throughout the first 50 years of the 19th century and the second 50 years of the 19th century, and they we're going to stand the test of time for one reason or another the next generation is neither interested or adapted forer whatever reason excepting the fact there is a certain amount of contingency and it's not all the term and bubbleses and attitude t. unique and explain why i started those in many ways embedded in the firm by alexander brown in the series of letters that he writes to his four children that are unbelievably full of homilies and clichés it sounds like a crib and ben franklin on

the one hand and with hamlet never a borrower or a lender, that was a colonialist version but alexander brown has his own variant thereof things like trust is hard to earn an easy to lose, be careful those with whom do business and is better to be safe and lose it. impounding the guiding principles, his children problem the guiding principles into their who pounded into their children and the brown family stops being essential to the governing of the business and moves into other partners and not related by blood but still embodied in what is remarkable is how remarkable in retrospect in terms of how the financial

world involves. the idea the thing that you should hold front and center and how you do business is a very endifferent mantra of wager to y to shoot for the moon and everybody try to be a unicorn how will we become a billion-dollar company in the return on capital. and sometimes in the memorial there were lots of speculators in the early 19th and late 19th centuries, there was panic every 20 years and metronomic pattern of panic 1819, 1837 in 1893, 1907 and finally the last of the dedepression starting in 1929. in brown brothers and alexander brown and his children learn to

that and every day when you go to sleep you better be prepared to wake up for completely changed world in a negative way that you could take nothing for granted. there is no way you can predict fate and what's going to happen on the other side all you can do is be prepared and be mindful that things can happen. that was a guiding principle. on the one hand that prevents brown brothers from ever becoming massively large, they largely stay on the sidelines on the railroad boom of the 1880s and 1890s 1870s, 1880s and 1890s, most people invest in the railroads even though a massive fortune wasn't named, j.p. morgan to fritz to huntington to stanford but we don't remember the fact for all of the robber barons to get rich including the irony of the herriman fortune,

the staffing gambler who becomes one of the important railroad at the term of a the 20th century and teddy roosevelt's with thewi northern trust and he tries to create in corner the entire railroad system. the brown brothers would say no we were not getting involved with that, the ratio does not work for us. it did not work for them because it was a partnership and it was a family partnership and it was their money.al everything the brown brothers does to the present because the partnership they are venturing their own hard-earned capital which means every single deal they could lose it all not justd gain all. frankly the only people who really made money in the railroad boom were people who built the railroads or issue the first bonds there is a secondary the financiers who bought the bonds for pennies when all theup lines went bankrupt, that is exactly what he did he invested heavily in the union pacific

railroad in april and stopping the passenger line and becoming one of the dominant freight lines in the united states. the idea of being mindful of the downside not just avaricious about the upside it was a guiding principle that didn't work for them. he did not prevent them from being rich, their greed was by definition pounded by risk bounded by what they could lose a new contract that with today's world by virtue these partnerships in the financial world all going public in the 80s and 90s the world ratio changed the massive risks were s offloaded either onto the balance sheet of shareholders or is result 2008, 2009 the balance sheet of taxpayers and the government fails amount. if you're in a financial firm and attacks firm or private equity today. you might make individually

$10 million or more than that. you're highly unlikely to lose $10 million individually you might lose reputation you might lose your job you might loseioou sound money but you're not going to lose the money that you're going to make. in the partnership structure the brown brothers has always said those are much more evenly balanced. the other thing that was part of their culture that i think explains some of the success in an acute awareness and in his children, the private gain cannot be detached indefinitely or intimately. in between my individual gain and whether or not the communitm around me is thriving. and even before the 1880s and 1890s when the self-conscious elite in a card-carrying member

which is why they were part of the story of the 60s with the backwashing. the whole nexus of clubby intermingling closed circle of wealth, power and privilege. with that was the motto he founded in the 1870s terrain is to serve witho great power comes great responsibility, we call it the spider-man theory of elite history. i believe they embody this, you can see this early on in 1820 alexander brown who is one of the richest men in baltimore realizes baltimore is falling behind new york and philadelphia as a trading center leave open

the canal and it's connected to the ohio valley philadelphia is building a canal in baltimore is at a competitive disadvantage. they can't build a canal and they decide to spend money the first pack enter passengerer locomotive realigned in the world which was a moonshot at the time, it was untested no one had done it they did not know that the steam engine would work or blow up too much and they weighed money publicly and they invest their own money alexander is determined to see his community thrive because he believes it's necessary for his own self interest. this makes them no money and it loses the money over time. it is hardly a good investment and judged in terms of shareholders, it's a great

investment in terms of return to society. it's in a whole period of railroad building trafficking and fundamentally central to the industrial revolution and you get the group of partners in the 1940s and 50s, all school and bones each by the time they enter government it is a culture to serve the public service is a requirement of privilege, a lot of people said they created a system globally in the axis of global economics which means that they were goingcs to thrive they created a u.s. dominated system and perpetrated the cold war. one of myne guiding themes is tt

human beings, if you're looking for. he of spiritfo and parts, your o be hard-pressed to find and anyone. there are saints and sinners but they're usually the same individual in the same collective that you can be of service and self-serving, you can be selfless and selfish and both can be true simultaneously. i think in many ways our desire, our collective narrative desire for simplicity of morality gets in the way of the complexity of human nature andof the messiness of history, brown brothers while they embody and they helped create a financial system in the 19th centuries are trusted more than the dollar and facilitate this incredible growth of the american growth they are also deeply complicit by the 1830s and 1840s, they are

embedded in the play system, they are simultaneously opposed reto slave labor as many northen merchants and that recognize your wearing a cotton shirt if you were thriving on the basis of american trade the emergence of liver poor recognize the british became antislavery in liver poor itself was starving almost entirely because of the labor of enslaved people both for cotton in the united states in sugarcane and other products in the caribbean, they were in bed with the system that they also hated. part of the way of dealing with that is having the contrary by the 1840s, even that was complicated it was also because if they can become a paper merchant that facilitated the trade of others they could scale much more than just a purveyor of physical good it was lenin. they move away from physical

trade and paper trade and by detaching themselves from the slave trade and becoming our founding supporters of the republican party, in no ways cannot be sugarcoated and nor can it be sugarcoated for the northern economy in the 1830s, 40s and 50s one of the reasons i think that lincoln talks about the intent ability that's half slave and half free is virtue, there is such thing as half slave, that is one of t the driving realities of the civil war and he becomes one of the drivers of early american imperialism they extend loans into the 1900s of nicaragua in the actually violence that of extended and they expect the government of nicaragua to pay them back and then they call them to their own civil chaos in

this. i've now what we callf dollar diplomacy to cuba and el salvador, honduras, nicaragua become the excuse for the united states to take more control of the government's when the government seem to be unable to meet their financial obligation. in 1912 on the urging of the grandchildren, the great-grandchildren of alexander brown who were the managing partners of brown brothers in the past administration were occupiedst nicaragua where they stayed more or less for the next seven or eight years. to the point where the nation magazine which oddly enough the brown brothers to fund and its founding becomes avirulent critic of brown brother i should call nicaragua the republic of brown brothers. they were also incredibly exclusive they were enclosed privilege in the 20th century.

understood to the benner board and not troubled by that. not particularly democratic enough about that. what is interesting the system elite culture by the 1950s as a much were balanced one dinner system today and we have a democratic form of capitalism meaning the elite world which they were the establishment by the 1950s is one between the differential between the ceo and a worker and a large american corporation is about 32. today's 300 - 1 maybe that's narrated or not but it's much more and galanter in economic system that was totally constructed by much more elitist captains of industry and finance. i think part of that was intuitive of the calming thrive for the individual and

individual companies. those things are an organic whole and that's why by the end of the book where i come to in this is the idea of the partnership model and the culture of brown brothers wasnda model in the culture of a sustainable capitalism. that is different from sustainability used today in a catchphrase for environmental awareness. sustainableon capitalism that co be sustained and it doesn't borrow too much from this future, the real ironyny of thee story because of glass-steagall in 1933, the brown brothers have to make a choice about whether they could be a commercial bank or an investment bank, most of their business at that time was in commercial banking including a burgeoning wealth management that they create and they remain

the private commercial bank in the private partnership, the offshoot eventually merges with morgan stanley which is a firm in philadelphia. after other mergers becomes drexel werner bloomberg in the late 70s is michael milken who becomes the king of the finance in the 1980s that was epitomized by the film wall street and all of our stone, declaiming greed is good which at the time is a criticism of the culture but becomes its own way celebration, that filmon becomes for generations from the 1980s that's we want to be and i guess in many ways is replicated by the film willful wall street with leonardo dicaprio plays similarly and is only heroic figure.

that was so antithetical to the brown culture, their attitude was were not trying to self enrich, we're going to serve our clients and create a meaningful culture and financial benefits for our employees. in return our partners considerable wealth but to do so in a way that is neverne systemically a problem and we are going to go for the returns no matter what the risk and the way i in the book, illumination you don't want a world where brown brothers mentality is only mentality in the financial world brown brothers never would've underwritten elon musk or funded the moonshot they did a little bit in the 1820s when baltimore had a railroad, you do want to and a dynamic system ended in

american capitalist system weren hopes and dreams can get field f by capital the problem in which the ratio and more prudent awareness that capital is the quicksilver power and it can create and destroy and mindfulro if you're the purveyors of the destructive power not just the constructive potential. alternate version of what capitalism can be and the balances to skewed between the elon musk version of capital versus the brown brothers, and being critical ofg the ratio ad read that exist and we can do more brown brothers in a little less than the other in shifting the mix. we should honor the story of a firm the brown brothers exist today, 5000 employees and $2 billion in revenue and

500 million in profit and if they were publicly traded they would be around a $20 billion company which is when compared to j.p. morgan morgan tax. why we don't respect that reality the way we demonize the huge players. there is good to be no limen trilogy on broadway about the rise and fall about brown brothers because the story is not dramatic enough and it does not satisfy the craving for heroes and villains that in many ways you don't want heroes and villains to be the one driving the financial system who are serving society and serving themselves and their clients in fraud inculcated and probably constantly needs to be looking themselves in the mirror and self-aware but nonetheless in many ways that, that

relationship between elite society if you've got a lot you need to give a lot and to be mindful of this and the power of what you're doing not just to enrich and create but to create disturbances in the force and we would all bes better served bya more balanced capitalism with brown brothers overture 20 years epitomized representative came to very much love. i think that will be my formal presentation. now we can turnn to questions. >> before we turn to questions, ask a question with a chat function we received some good ones that we would like to encourage you to ask more questions. >> the first question on a risk

basis what companies would highlight today are they the same company like brown or cox or are there other examples? >> those are two good ones to some degree brown brothers itself has been one of the best answers for that question the brown brothers is one of the best example of a company today but there are these companies in they do exist, part of what i'm saying by virtue of that culture the culture, percival brown brothers has a culture every day our name is not in the public hepapers, every day that were nt in the story is a good day, that's probably why there's no book about them in because they have a huge being in the story. major for a while you may not have heard of brown brothers if

you're not in the financial world you may not even know there around if you are in the financial world, there's alec of cobrown brothers and every major thing that happened in american history not wanting to be the story but without him there is no story. that quality precludes in the same thing there is not a lot of cost within the financial advisory world in my point is we should find a way to tell the stories and honor them even if they lack the drama of other stories because the stories we tell shape or sense of what's possible and what we should aspire to and i actually think this is a fascinating story in itself we would be better served by paying a little more attention to those kinds of storms. >> care several questions about

the relationship of the other household names the rockefellers, the vanderbilt and adding on to that did they find the jewish financers of the day was it a constant relationship or not? >> there was a lot of interaction even though the brown brothers is not a leading railroad financier they joined the syndicate deals, most of these deals when you're recapitalizing an entire rail line like the union pacific or the northern pacific or the central illinois, youor name it it's not being done by one drinker xp led by j.p. morgan with 20 others same thing withs providing loans from world war i the central moment in the change of the united states relative to thee world but the united states goes from being a debtor nation

to europe trade creditor nation to europe in the brown brothers has a real role along with morgan and lamont and all these other names that are familiar but they are not leading, they are joining their going to metropolitan knickerbocker in doing the deal but does n not front and center dealmaker. they take a with vanderbilt in the 1850s in a more speculative and the passenger across the basic to compete in the end quite badly, not because of the business but one of the ship's sing, the ss arctic before the titanic 50 years later. they get government underwriting in the mexican-american war vanderbilt was really like i made my own money by myself i'll

be damned anybody to get government money and outraged at this particular steamship line got government money. brown brothers is interacting with these groups and much like a lot of wall street brown brothers had a cultural anti-semitism one moment in the book where the widow of one of the grandchildren of alexander brown john crosby brown in the 1870s, 80s and 90s in she dies in a house in a differentnt sale, jewish business approaches the sons to buy the property and they clearly say we don't want to sell and the other say of course not why would we ever. in long island some of the

founding partners in marshall field he helped create cbs is not like they were unwilling to do business deals. i think that's true of interaction between the jewish bankers like the shifts in the lehmans and the golden in the wasp banking groups. pretty anti-semitism on the one hand but not to the degree we want to go golfing have dinner. that place to what i was saying before if you're looking for simplicity and easy heroes and easy villains i'm not a big fan of that, they exist i'm not going to write a glowingth complicated sympathetic book of hitler. i think a lot of history is much more nuanced.

>> what inflicted the first and second national banks unguarded operation? >> the second bank is much more crucial. jackson's bank work of not redoing the charter. jackson's intense animosity to y paper money which was the lifeblood of jackson supporters. a bizarre relationship throughout american history where the heartland the jacksonian world and before that the jeffersonian world is antagonistic to the muddied to lead to the northeast the hamiltonian, the banks, the t nichols and the theme of animosity of the creators of money to steal the hard-earned work of the farmers andar the laborers with a powerful move

will for jacksonian movement he wailed for banks and sees for the elites of the northeast for the wealth of his supporters and the people of kentucky and ohio valley and all those areas that are growing. they needed the money of the wildcat banks for opening farms and settling the frontier inciting the native americans, it was a lot of other people that were there first. animosity toward banks and banking creating violent financial crisis. when jackson was leaving office it forces banks to: all their paper creates a panic of 1837 which is an exponential crisis for the brown brothers where they turn to the bank of

england. i did not get into this. this is huge in england by william brown becoming brown shipley. part of the risk culture is frame by jacksonian moment and 1837. >> you mentioned school and bones it comes up in the book a lot, what lessons did harriman, lovett learned from their extremes at school and bones. >> if you talk to people in that world the societies were called secret societies but rel called senior societies. once you were selected it's a rare place you could totally be yourself, you were entrusted of silent.

later on in the 60s there was a backlash against delete and establish culture probably because they were seen as leading the united states down the garden path into the vietnam war and what we see then was stupidity in the cold war which led everyone to the cold war a way to enrich themselves and they were always clubby societies that met behind closed doors secret truce impacts being cemented by kabul is why the brown brothers, in the world of conspiracy the believers of history have been pulled behind the scenes of a close delete in the brown brothers are quietly there and all these theories prescott bush was he in bed with nancy germany and did they fund the industrial machine and the

deals with industrial machine prior to the rise of hitler. in reality it was a world where young privilege men and lifeguard under god with the garden be honest because they do their secrets were safe with one another. ethose relationships curator ovr the years. and they are married. they did each other papers in the interlinking board where one hand shook the other at all about reality was partly true because it's humanly true. you benefit your friends, connection and thought i do think it cemented the bonds but i'm not a big fan of the conspiracy theory. >> tim asked they were involved in the civil war, the baltimore

with that, get matters in new york citype and philadelphia. >> instantly did all of that, by that point the baltimore office of brown brothers visibly significance philadelphia was second. moving to new york in the report in boston. the baltimore house was a clearinghouse, an agent for the new york house at that point the sun the alexander had cashed out by the 1830s and john brown cashed out and then they died in the houses led by cousins and nephews were not important.

human history as well. there was a tense moment at the beginning of the civil war that borders the house that plied the union jack in the middle of the city most will know baltimore was occupied essentially. because marilyn was a slave state attends.us but in terms of the business dynamic baltimore was not important to the overall business of brown brothers to the point. >> did you get cooperation from brown brothers and how did you conduct your research. >> i did get cooperation but i did not need cooperation the brown brothers 150th anniversary in 1960 and took the individual who wrote0 it five years from the early 60s to 1967 he collated all of the

firms historical records and after that i don't agree with 1818 it's not that important. all of that research material is the positive at the new york historical society where it yresides today 130 or 40 archival. and they were done by the truman library, there was a material not a huge amount and they didn't get to the historical society i saw no evidence that that was the case i was not that interested in trying to figure that out figuring there was enough there transparently. >> there was a lot that could'vd been said about thess brown brothers in the 1980s and

90s and into the present, a lot of their business, the custody work and asset managers and traded stocks in the u.s. exchanges in the financial system and i leave it to all of you to judge the stuff of great narrative i think it certainly not. i didn't really need to get into it with the partners today, largely i did not want to write about their business today i wanted to write about the business model as a contrast to what i talked about before, too big to fail, i read about in that respect but i did talk to some of the partners, i did want them to feel comfortable with the book because this is their

story i didn't give them any veto power, they were not overly thrilled about the stories of slavery and anti-semitism, i think they are worried that would be the thing that people focused on when they read the t book as opposed to it being part of a lattice not the focus of it. i recently wanted them to feel like i was running an honest and honorable history of a firm and i did not have an agenda per se. >> countries history what is this influence mean today? >> i would say this influence is relatively modest if at all, that's by design i don't get tht sense the partners have an interest in whatever we call

influence, that is not the motivating desire, they don't want to be in the news they still prefer culturally to be behind-the-scenes regulatory when they have things that might touch on their business like oucustodial regulation and thins in the occ they will engage the regulators for sure probably different than any other equivalently size firm i think they're proud of their legacy but not interested in the public service part of that. >> most of the revenues come from assets management. >> a lot of it in the exchange harmonization and they do do direct asset management as well. >> politics as well when people talk about money and finance and

lobbying how did money originally become intertwined in our culture where they always marry like this? >> i don't think they were always married like this. sadly by the 1880s and 1890s yet the billionaire said it in the 1880s. for the most part people with huge amounts of money were uninterested in government it was a small relative backorder well into the century. most of these varied industries believe that they can exercise more power by shaping government and paying for senator and phi did it to a point in the being in office themselves that begins to change on the dawn of the 20th century andrew mellon and the secretary treasury. i think it's really a product of the new deal and beyond where you have a revolving door between finance in washington

and elites in washington and government modern day of that. you don't see that in the 19th century and the early part ofth the 20th and you see in the 1920s and then world war iith and into the cold war. >> any degree of luck for the brown brothers in the right place at the right time. >> fisher i think if you looked at the who's who of trading merchant houses in the 1830s he would've had a whole bunch and you might've predicted it would've been around for generations and probably had some of the same values that the browns brothers did they were rigidly systematic and

meticulous and how they assessed risk even then quantitatively they would score their clients g business. they were unusually meticulous i had not given them a modest bridge loan enough to cover their outstanding obligation in an argument and liverpool and we managed our book in a risk pretty well but this is cascading enrolling in if you force us to redeem on the par i don't want to get too wonky rather than what their trading at which is done at the capital and, even 30 - 50% of all of liverpool credits with the brown brothers, if we fail the whole thing is coming down the bank of

england is better to prop up ron brothers if that didn't happen i don't know they may not have found thatex next-generation and all the kids were interested at bunch went down and asset arctic not everyone in liverpool the children were not very interested but he manages to bring nonfamily partners into the business are unbelievably confident. at any stage that could've gone awry and it doesn't. but the culture remains and is certainly doesn't remain the lehman brothers when there are no more lehmans left. >> a separate question, what

would brown brothers think of crypto will they be the last to embrace and in the second one have you seen the paintings solely of the brown family and alexander brown building in baltimore if so what are your impressions of the family role. >> i'mpr not sure which painting that refers to there is one in the 1850s of the family that is known by eastman, i think all of the paintings i have seen i'm pretty sure i know which one is there i'm just not picturing the exact one that captured that solid banker always wearing black they look like their bankers and their families look at what moment in time the aa aaron. crypto the brown brothers is not

doing a dogecoin etf anytime soon. in scripture that becomes a better part of the financial system they are likely to develop custody tools and technologies that are safe and secure and reliable. for crypto. >> is there any connection between brown and bernard. >> not really i can't say whether they knew each other or not but certainly been graham's mantra in the 1930s the firm writes a brochure about asset management. called scattered wealth in itsc talks about how every ten years the world changes in stocks and bonds, i can't make any assumptions what will work then will work now in the egos of y value investing value and make sure your portfolio is well constructed would've been very

been graham even if they were following his specific mantras. >> a final question before i come back and i wrap it up, thank you professor thank you for exhilarating talks you mentioned that a partnership may be better positioned to suit the public good. t why is that the case do you see the same principle for private equity firms and be more successful and impacted this is a much larger conversation i'm trying to make where the risk reward ratio exist within the firm's culture. private equity firms in partnerships are sole proprietorship, the way that they deploy capital there deploy another people capital and it was always there capital embedded in every deal and there

was a huge amount of individual risk that you took on when considering where you were going to deploy capital which doesn't pertain to private equity firm which has other people's money and earned fees on the pool of money that you raised it's not like it's a partner's money and they bring in other people's money even if there's a little bit an partner's money is more like the partnership in the hedge funding vehicle. i do want to repeat as we end up not seeing the entire system should be structured you do not want a financial system solely of the brown brothers in the partnership. is about what the balance in the ratio is in the world has become unbalanced and the risk part because it's so focused on the outside as opposed to strives

for a sustainable balance of how we deploy capital trade if there is any lesson as we conclude from brown brothers. at the same of capitalism with the entire lattice of society and every huge gain is usually counterpart is a huge risk and a huge loss to every immense construction is potentially new construction, and means be aware, be mindful and be balanced that's what i'm trying to say brown brothers has a more supportive model. >> we had a huge gain in this last hour is phenomenal one point to the book if you're interested in robert lovett there is no biography of him, giving him a two-for-one because he covers him in such rich detail it's almost like a biography. i want to thank our friends, the cfa and zachary for a phenomenal engaging out.

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