Maryland Firsts: An article series exploring our state’s contributions to American industry
An 1827 engraving of Alexander Brown by John Wesley Jarvis.
How an Irish immigrant and his sons established the nation’s first and longest-running investment company
In the early 1800s, Americans were the most optimistic people on earth. Self-assured, independent, and egalitarian in perspective, they believed in American exceptionalism. With great faith in the future, they welcomed immigrants and innovation to harness a wealth of natural resources. Indeed, the presidential era that began with James Monroe and included John Quincy Adams was called the “era of good feelings.”
In 1807, Robert Fulton revolutionized transportation, essential to economic wellbeing, with his invention of the steamboat that ploughed the Hudson River, the Mississippi, and a network of river highways. By 1845, the tone was set for President James Polk to open the country from the Atlantic to the Pacific. By 1849, he had increased U.S. territory by one-third, adding Texas, the southwest territory, California, and the Oregon territory…our nation’s Manifest Destiny complete.
Americans, most living on farms, were generally cash short but their enthusiasm for the future was strong. Poet Walt Whitman’s collection Leaves of Grass celebrated America with the poem “I Hear America Singing.”
“The varied carols I hear…the hard-working mechanics and carpenters and boatman and mothers…each singing what belongs to him or her and to none else.”
Despite the hardships, hard work, and risks, there was an enthusiasm for America as “heaven on earth.” This enthusiasm was evident in Baltimore. A young, growing city with a superior harbor, Baltimore became the United States’ second largest city by 1850. And it was during this age of optimism when a businessman from Ireland emigrated to Baltimore.
Alex Brown, a linen merchant with his own ships, set up shop in a cash-starved new nation as an investment firm. The private corporation would dominate Baltimore for 200 years. It was the first investment bank in the United States and became the nation’s oldest. It would be several decades before JP Morgan and other European investment firms would set up shop in the new United States.
Strapped for cash, the U.S. banking system couldn’t keep up with the industrialization demands of a rapidly growing nation. Economic, social, and cultural history cannot be easily separated—they meld together like a horse and carriage. And Alex Brown was in the right place at the right time.
During its beginning in the early-1800s as the first investment banking firm in the U.S., Alex Brown organized the first public offering (IPO) supporting what would become a public utility, the Baltimore Water Company—a business to provide clean and safe water to Baltimore residents. (The concept of IPO offerings dates to the Roman Republic, with stock shares sold near the Forum and the Temple of Castor and Pollux by publicani. This action was discontinued in the Roman Empire.)
The Alex. Brown & Sons Building still stands today (though it is closed to the public)—a testament to the family legacy of finance and building an industry of wealth.
In 1810, Brown was joined by his sons and the company was named Alex. Brown & Sons. His sons would establish firms in Philadelphia, Pennsylvania, and Liverpool, England, and were served by a fleet of ships that transported tobacco and cotton. By 1828, the company would play a leading finance role in founding America’s first railroad, the Baltimore and Ohio. Brown’s son George was a pioneer in the railroad industry, which would push westward to the Ohio River and become an economic salvation for the port city of Baltimore. The line continued service through the Civil War and transported commodities and people west across the states until 1987.
By 1834, Alex. Brown & Sons was proclaimed “America’s foremost international banking enterprise in the 19th century.” That same year, Brown died but by then had become one of the nation’s first millionaires. His sons continued with the firm.
In 1852, “Uncle Toms Cabin” by Harriett Beecher Stowe, heralded things to come in the decades of crisis over slavery. The Civil War would break the bubble of the “feel good times.” Inflation moved $6.17 in groceries to $68.72 in just a few short years and took the starch out of the populous in the latter part of the 19th century.
But the investment company remained successful and became a leading innovator by rebuilding businesses in the South after the Civil War. Years later, in 1933, it joined the New York Stock Exchange. The company continued its pioneering efforts by focusing on healthcare investment and helping launch IPOs for Microsoft, Oracle, and Starbucks, among many others. Its headquarters is an architectural gem of a building built from local Beaver Dam marble that survived the Great Baltimore Fire of 1904.
For the next 100 years, Baltimoreans considered Alex. Brown & Sons a symbol of strength, as its go-to, trusted investment firm. Over the years, the company would adjust and adapt as culture changed until it was acquired by Deutsche Bank in 1999, and eventually became a division of the Raymond James financial empire.
In 2000, Alex. Brown & Sons celebrated its 200th anniversary to Baltimoreans’ applause and memories of good will. In the years since, social and economic networks and international culture have changed, but Alex. Brown & Sons identity as Baltimore’s special investment firm remains in place.
