Old money banker to IPO maker

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Deutsche Banc Alex. Brown is rediscovering its roots.[IMGCAP(1)]The long-time Baltimore brokerage house, which merged with the German bank in 1999, released a 90-page hardcover book this month called the “Legacy of Alex. Brown” to celebrate its 200th anniversary and take a look back at how an Irish immigrant became one of the most influential businessmen in the city’s history. Since Alexander Brown founded the firm in 1800, Alex. Brown has evolved from an old money niche banker to one of the strongest firms on Wall Street. The company has tried to retain its ties to Baltimore through various philanthropic events, and the anniversary book tries to illustrate how Alex. Brown was instrumental in developing the financial landscape of the city.“This firm has expanded through two centuries of economic booms and busts to become a national — a now international — financial powerhouse,” the book’s introduction said. “Alex. Brown & Sons was for generations a family business engaged in merchant trading, shipping, letters of credit and, later retail brokerage and investment banking.”Alexander Brown was a successful linen trader in Belfast in the 1790s, but he decided to move to Baltimore near the end of that decade because of the way he felt the English were mishandling Irish affairs. Brown selected Baltimore because his brother already ran a business here, and the city was a renowned gateway to the South, where there was a substantial linen trade.[IMGCAP(2)]The business became known as Alexander Brown & Sons in 1808, and later expanded into merchant banking to make up for a lack of an extensive banking system during that period.The book, which does not have a listed author, dwells on the history of Alex. Brown in the early days and details how the company shaped the city. For example, Alex. Brown helped develop the city’s first piped water system, which made the cumbersome use of public wells obsolete.The firm also did business throughout the War of 1812, even with a 25-hour bombardment of Fort McHenry in one of the battles. At the time, Alexander Brown — destined to be one of the nation’s first millionaires — wrote to one of his sons that the pesky British could never destroy the City of Baltimore. But Alex. Brown is known more for its financial innovations, and the firm first offered international letters of credit in 1824, considered the forerunners of traveler’s checks and credit cards. In 1838, Alex. Brown issued a letter of credit to Jerome Napoleon Bonaparte, the son of Napoleon’s brother, Jerome, and Betsy Patterson of Baltimore. “Initially a sideline, this aspect of the firm’s business expanded tremendously as more Americans began travelling abroad,” the book says. “Alex. Brown & Sons’ letters of credit were recognized and honored by the firm’s more than 3,000 correspondents around the world.”The book then examines how Alex. Brown evolved through history and parallels that development with the construction of the B&O Railroad, helping the nation rebuild after the Civil War and restoring public confidence after the stock market crash of 1929.Drawing on more recent history, the book chronicles the fortunes a fledgling Seattle company called Microsoft, which was one of three major technology firms, along with Sun Microsystems and Oracle, that Alex. Brown brought public within 10 days in 1986.The firm relocated its headquarters to a 30-story office building at One South Street in 1997 that now houses more than 1,200 employees.The book provides details of the firm’s $2.2 billion merger with Bankers Trust Corp., of New York, in 1997, but it does not mention Bankers Trust’s financial problems that soon followed and forced the company to sell out.Just two years after Bankers Trust and Alex. Brown merged, German financial giant Deutsche Bank bailed out Bankers Trust when it agreed to buy the troubled company. This resulted in an exodus of Alex. Brown brokers who were afraid of losing their autonomy in the deal — another fact missing from the pages of the book.Even so, Alex. Brown officials were delighted with the merger because it made Baltimore a major hub for the German firm’s retail brokerage business. The company has tried to shed any stigma from the merger by playing a large role in civic leadership. Alex. Brown exceeded its $2 million annual giving level this year and donated more than $5.5 million in charitable gifts, the book recounts.The book is ultimately a poignant reminder of what Alex. Brown has meant to the city and state and provides a subjective account of the company.“While Deutsche Banc Alex. Brown is today a global leader in equity financing, for most of its history Alex. Brown held a leadership position in investment banking in the Mid-Atlantic area, with a major focus on serving Maryland’s corporate community,” the book said.