Free What Happened to Goldman Sachs: An Insider's Story of Organizational Drift and Its Unintended Consequences by Steven G. Mandis Page A

Franklin D. Roosevelt, creating a bridge between business and government during the New Deal. Congress passes the Securities Act of 1933, creating the Securities and Exchange Commission. The Banking Act of 1933, known as the Glass–Steagall Act, is passed, prohibiting commercial banks from engaging in investment activities.
    1937: Sidney Weinberg’s percentage of the partnership has tripled since 1927 and stands at 30 percent.
    1942: Weinberg takes a leave from the firm and enters government service as assistant to the chairman of the War Production Board, forming relationships with America’s top executives, many of whom will later become Goldman clients.
    1945: At the end of the war, Weinberg resigns from government service.
    1947: John C. Whitehead joins Goldman from Harvard Business School.
    1948: The Justice Department files an antitrust suit ( U.S. v. Morgan [Stanley] et al .) against nineteen investment banking firms. Goldman had only 1.4 percent of the underwriting market and was last on the list of defendants. Goldman would not be included in a 1950 list of the top seventeen underwriters. Sixty years later, of the nineteen firms named in the suit, only Goldman and Morgan Stanley remain as independent firms.
    1950: John L. Weinberg, Sidney’s son, joins Goldman. A list of the top seventeen underwriters does not include Goldman.
    1956: Goldman leads the underwriting of Ford Motor Co.’s IPO, building the firm’s reputation in investment banking. Whitehead and John L. Weinberg become partners. Goldman’s capital stands at $10 million.
    1969: Upon retiring, banking-oriented Sidney Weinberg has reservations about leaving Gus Levy, a trader, as senior partner, so he introduces an eight-man management committee with seven older banking partners to supervise Levy. Sidney Weinberg dies. Gus Levy, now senior partner, takes charge of Goldman and rebuilds its trading business. Because of the potential for direct conflicts with its large block-trading clients and because of the Goldman Sachs Trading Corporation debacle, Goldman steers clear of asset management until Gus Levy creates the investment management services (IMS) unit.
    1970: The NYSE amends its rules to admit publicly traded members, prompting investment banks to consider abandoning their partnership structures and offering shares for sale to the public. Credit ratings are created for every issuer of commercial paper after the Penn Central Transportation Company goes bankrupt with more than $80 million in commercial paper outstanding, much of it issued by Goldman. The ensuing litigation threatens the firm’s existence. Goldman opens its first international office in London.
    1971: Merrill Lynch goes public.
    1972: Goldman starts a private wealth division and a fixed income division. Goldman pioneers a “white knight” strategy, defending Electric Storage Battery against a hostile take-over bid from International Nickel and Goldman rival Morgan Stanley.
    1973: Fischer Black and Myron Scholes first describe their Black-Scholes model to price options.
    1975: May 1 marks the end of fixed trading commissions in the stock market, forcing investment banks to compete in negotiations over transaction fees.
    1976: After Gus Levy’s death, John L. Weinberg (Sidney’s son) and John Whitehead take over as senior partners and continue to build Goldman’s investment banking business. This is the beginning of Goldman’s tradition of having co-heads, setting a Wall Street precedent. The firm sets a record for pre-tax profits of $40 million.
    1979: John Whitehead drafts a set of business principles that codifies Goldman’s core values, setting a Wall Street precedent (O).
    1980: Goldman’s capital stands at $200 million.
    1981: Salomon Brothers goes public (C). Goldman diversifies by absorbing the commodities trading company J. Aron & Co. Lloyd Blankfein, who worked at J. Aron before the merger, joins Goldman. J. Aron becomes Goldman’s currency and commodities trading