Inside Money: Brown Brothers Harriman and the American Way of Power
(Penguin, $30)
The family that founded Brown Brothers Harriman produced wealth, not drama, said Roger Lowenstein in The New York Times. In Zachary Karabell’s history of the influential private investment bank, Alexander Brown and his 19thcentury progeny live in plain homes, manage risk carefully, and prioritize community. Obviously, “this is not exactly miniseries material.” Yet Karabell ably dramatizes the firm’s key role in the nation’s growth, making it “quietly stirring” to read of Alexander arriving in Baltimore from Belfast in 1800 and evolving from linen merchant to financier. He and his sons astutely invested in the first passenger railroad and regrettably facilitated the growth in slave-picked cotton too. They became, along with others, the money that built America.
The firm’s partners were “neither saints of capitalism nor perfect managers,” said Robert Armstrong in the Financial Times. The bank needed a Bank of England bailout to survive the panic of 1837, and its domination of the finances of Nicaragua before World War I offers “a remarkable case of economic imperialism.” But the true power elites don’t have to excel to hold power. Consider Brown Brothers Harriman partner Prescott Bush, who did “approximately nothing” as a U.S. senator yet had a son and grandson who each became president. Still, Karabell argues, the old ways were better in one sense: The financial system was more stable when investment banks followed the Brown Brothers model, investing only their partners’ money.
Brown Brothers Harriman took a different path through the 20th century than many rivals, said Peter Thal Larsen in Reuters .com. As it spins off its investment bank during the Depression and sends wise men to Washington, D.C., to guide the nation through World War II and into the quagmire of Vietnam, “Karabell tells the tale with vigor, bringing the leading characters to life.” Today, the firm is “Wall Street’s forgotten bank,” quietly toiling in a low-risk sector. If the old ways ever return, “Brown Brothers Harriman will be ready.”