How Goldman Sachs Started

Summary

Goldman Sachs, a Wall Street giant with a 150-year history, was founded by Marcus Goldman and Samuel Sachs. From humble beginnings as a commercial paper business, it grew into a global financial powerhouse, influencing governments and economies worldwide. The firm's resilience is evident through its ability to navigate challenges like the Great Depression and the 2008 financial crisis. Today, Goldman Sachs remains committed to innovation and excellence, setting a standard for client service and teamwork in the financial industry.

Takeaways

• 💡 Many top government officials worldwide, including Rishi Sunak, Malcolm Turnbull, and Mario Monti, have connections to Goldman Sachs.
• 🏛️ Goldman Sachs has a 150-year history, starting with Marcus Goldman, who immigrated to America from Germany to escape persecution.
• 📜 Marcus Goldman pioneered the commercial paper business in the late 19th century, laying the foundation for the bank's success.
• 🤝 Family ties played a significant role in the firm's early growth, with Marcus Goldman's son-in-law Samuel Sachs joining and eventually helping to expand the business.
• 🌍 Samuel Sachs was instrumental in expanding Goldman Sachs internationally, believing that a global presence was key to serving all Americans fairly.
• 🏛️ By the early 20th century, Goldman Sachs had gained a reputation for financial innovation, a legacy that continues today.
• 🚀 Despite challenges like the Great Depression and the 2008 financial crisis, Goldman Sachs has consistently rebounded and remained a leading financial institution.
• 💼 In 2016, the company launched Marcus by Goldman Sachs, a platform designed to help people manage their debt, showcasing the bank's adaptability to modern financial needs.
• 📈 Goldman Sachs is recognized for its commitment to excellence, client service, and teamwork, upholding the high standards set by its founders.
• 🏆 Goldman Sachs is one of the most influential financial institutions globally, continuously seeking innovative ways to serve its customers and maintain its leadership position in the financial world.

Q & A

Why is Goldman Sachs considered to have the 'best and brightest' in the industry?

Goldman Sachs is considered to have the 'best and brightest' because many top government officials, such as Rishi Sunak, Malcolm Turnbull, Mario Monti, John C. Whitehead, and Steve Nugent, have been former employees of the firm, indicating the high caliber of talent it attracts and develops.

What is the historical significance of the establishment of Goldman Sachs?

The establishment of Goldman Sachs is historically significant as it marks the beginning of one of Wall Street's most influential banks, founded by Marcus Goldman and Samuel Sachs, who were both immigrants and pioneers in the commercial paper business.

How did Marcus Goldman's background influence the founding of Goldman Sachs?

Marcus Goldman's background as a Jewish immigrant fleeing persecution in Germany and his entrepreneurial instincts influenced the founding of Goldman Sachs. He started a small business in New York, dealing with promissory notes, which eventually grew into a pioneering financial institution.

What role did family ties play in the early years of Goldman Sachs?

Family ties played a crucial role in the early years of Goldman Sachs. The firm was initially established by Marcus Goldman and expanded when his son-in-law, Samuel Sachs, joined the business. Intermarriage among partner families was common in the first 50 years of the firm's inception.

What was Samuel Sachs' contribution to the growth of Goldman Sachs?

Samuel Sachs contributed significantly to the growth of Goldman Sachs by bringing his expertise as a bookkeeper and businessman. His conservative and meticulous approach, combined with Marcus's diligence, helped the firm become one of the largest banks in New York and expand its business in commercial papers and stock issuance.

How did Goldman Sachs innovate in the financial industry?

Goldman Sachs innovated in the financial industry by pioneering the commercial paper business, helping companies raise funds through stock issuance, and expanding into overseas markets. The firm's commitment to financial innovation has been a hallmark of its 150-year history.

What challenges did Goldman Sachs face during its history?

Goldman Sachs faced several challenges, including the Great Depression, the collapse of the technology bubble, high-profile scandals, and the financial crisis of 2008. However, the firm managed to overcome these difficulties and emerge stronger.

Who is Sydney J. Weinberg, and what is his significance to Goldman Sachs?

Sydney J. Weinberg is known as the father of modern-day Goldman Sachs. He began his career with the firm as a janitor's assistant and rose through the ranks to become a key figure in the bank's success and innovation.

What is the significance of the name 'Marcus by Goldman Sachs'?

The name 'Marcus by Goldman Sachs' is significant as it represents the firm's commitment to innovation and customer service. Launched in 2016, it is a platform designed to help people manage their debt better, reflecting the bank's ongoing evolution and adaptation to new financial landscapes.

How does Goldman Sachs maintain its reputation for excellence?

Goldman Sachs maintains its reputation for excellence by adhering to the values established by its founders, focusing on client service, teamwork, and maintaining exceptionally high standards in all aspects of its operations.

What is the importance of the video script's mention of the YouTube algorithm and Patreon?

The mention of the YouTube algorithm and Patreon in the video script is important as it highlights the creators' efforts to engage with their audience and seek support for their content creation. It encourages viewers to like, subscribe, and consider financial support through Patreon to ensure the continued production of informative videos.

Outlines

00:00

🏦 Founding and Influence of Goldman Sachs

This paragraph outlines the origins and significant influence of Goldman Sachs, highlighting its history of attracting top talent into government roles. It details the story of Marcus Goldman, the founder, who started as a cattle farmer's son and later migrated to America due to rising anti-Semitism in Germany. His entrepreneurial venture in 1869, dealing with promissory notes, laid the groundwork for the bank's success. The partnership with Samuel Sachs, who married into the Goldman family, expanded the business and led to the establishment of Goldman Sachs & Co. The paragraph also mentions the bank's innovative approach to finance and its role in helping companies raise funds through stock issuance.

05:00

🌐 Global Expansion and Modern Evolution of Goldman Sachs

The second paragraph discusses the strategic global expansion of Goldman Sachs, led by Samuel Sachs, who believed in serving Americans by having a strong international presence. It also touches on the bank's financial innovations and the challenges it faced, such as the Great Depression and the financial crisis of 2008. The paragraph introduces Sydney J. Weinberg, who rose from a janitor's assistant to a key figure in the bank's modern era. It concludes with the bank's resilience and commitment to excellence, mentioning the launch of Marcus by Goldman Sachs in 2016 to help manage consumer debt, and emphasizing the bank's continuous pursuit of innovation and high standards in client service.

Keywords

💡Goldman Sachs

Goldman Sachs is a leading global investment banking, securities, and investment management firm. It is one of the most influential financial institutions in the world, known for its innovative financial services and its role in shaping the global economy. In the video script, Goldman Sachs is highlighted as a company that has attracted and produced top government officials, reflecting its prestige and influence in both the financial and political spheres.

💡Promissory Notes

A promissory note is a financial instrument that contains a written promise by one party to pay another party a certain sum of money either on demand or at a specified future date. In the context of the video, Marcus Goldman's business began with buying promissory notes from local merchants and selling them to commercial banks, which laid the foundation for Goldman Sachs' success in the commercial paper business.

💡Entrepreneurial Instincts

Entrepreneurial instincts refer to the inherent ability or inclination to identify opportunities and take risks in order to start and grow a business. Marcus Goldman's confidence in his entrepreneurial instincts led him to establish a business in New York, which eventually evolved into Goldman Sachs. This concept is central to the video's theme of the bank's origin and growth.

💡Commercial Paper Business

The commercial paper business involves the buying and selling of short-term, unsecured debt instruments typically issued by corporations to finance their operations. Marcus Goldman's success in this business made him a pioneer in the field, as depicted in the video, and it was a key factor in the early success of what became Goldman Sachs.

💡Immigration

Immigration is the process of moving from one country to another with the intention of residing in the new country. The video script describes Marcus Goldman's family as part of the first wave of Jewish immigration to America, seeking social and economic opportunities that were denied to them in Germany, which is a significant part of the bank's history and the personal journey of its founder.

💡Anti-Semitism

Anti-Semitism refers to hostility or prejudice against Jewish people. The script mentions the rising persecution and anti-Semitism in Germany as a reason for Marcus Goldman's family to migrate to America, which is a historical context that influenced the establishment of Goldman Sachs.

💡Influence

Influence in this context refers to the capacity to have an effect on the character, development, or behavior of someone or something. The video emphasizes the influence of Goldman Sachs by highlighting the number of top government officials who are former employees, showing the bank's impact on global politics and economics.

💡Financial Innovation

Financial innovation refers to the creation of new financial products, services, or methods that improve efficiency or performance in the financial markets. The video credits Goldman Sachs with being financially innovative throughout its history, which has contributed to its status as a leading financial institution.

💡Sydney J. Weinberg

Sydney J. Weinberg is mentioned in the script as the person who took charge of Goldman Sachs during a challenging period and is known as the father of modern-day Goldman Sachs. His career at the firm started as a janitor's assistant, and his success led to significant contributions to the bank's development and reputation.

💡International Presence

An international presence refers to the extent to which a company operates or is known globally. Samuel Sachs, one of the founders, believed in the importance of expanding to overseas markets, which is highlighted in the video as a strategic move that helped Goldman Sachs serve Americans fairly and establish a significant global footprint.

💡Financial Crisis of 2008

The Financial Crisis of 2008 was a severe worldwide economic crisis that precipitated the Great Recession. The video mentions this event as a challenging time for Goldman Sachs, but also notes the bank's resilience and ability to recover and adapt, demonstrating its strength and adaptability in the face of adversity.

Highlights

Goldman Sachs is known for having many top government officials as former employees, including Rishi Sunak, Malcolm Turnbull, Mario Monti, John C. Whitehead, and Steve Nugent.

The bank was founded by Marcus Goldman and Samuel Sachs, who were connected through family ties and shared entrepreneurial ambitions.

Marcus Goldman's determination and entrepreneurial instincts led to the establishment of a business that would become one of Wall Street's most influential banks.

Goldman Sachs' history began with the immigration of Marcus Goldman from Germany to America, seeking social and economic opportunities.

Marcus started his business in 1869, focusing on the commercial paper business, which was a pioneering move at the time.

Samuel Sachs joined the firm in 1882, and the partnership led to the renaming of the firm to Goldman Sachs.

Samuel Sachs was known for his conservative approach and meticulousness, which contributed to the firm's reputation and success.

Goldman Sachs became one of the largest banks in New York by specializing in commercial papers and helping companies raise funds through stock issuance.

The firm expanded its business internationally under Samuel's vision, establishing connections in various countries.

Sydney J. Weinberg, who started as a janitor's assistant, played a significant role in shaping modern-day Goldman Sachs.

Goldman Sachs faced challenges during the Great Depression but managed to navigate through it with resilience.

The firm launched Marcus by Goldman Sachs in 2016 to help people manage their debt more effectively.

Goldman Sachs is recognized for its commitment to client service, teamwork, and maintaining high standards throughout its 150-year history.

The bank has consistently delivered excellence for its customers and has been financially innovative since its founding.

Goldman Sachs has a vibrant history of adapting to new challenges and opportunities, as seen in its recovery post-2008 financial crisis.

The bank's strive for excellence and adherence to the values set by its founders have made it one of the most influential financial institutions globally.

Goldman Sachs continues to be a leading bank, always looking for innovative ways to serve its customers and the financial market.

Transcripts

goldman sachs the best and brightest

don't go into politics

the best and brightest are at goldman

sachs the proof of this quote

lies in the fact that many of today's

top government officials

are former employees of goldman sachs

rishi sunak

chancellor of the ex-checker in britain

malcolm turnbull former prime minister

of australia mario monti former prime

minister

of italy john c whitehead former

undersecretary of state and steve nugent

the secretary of the treasury in the

united states are just some of them

goldman sachs has a vibrant history of

150 years

it all starts with the determination of

marcus goldman who

with the inside of samuel sacks his

son-in-law

undertook a journey which led to the

establishment of one of wall street's

most influential banks marcus goldman

was born as mark

goldman in december 1821 to cattle

farmers

his grandfather was called jonathan

marks but had changed his name to

goldman when jews were finally permitted

to have surnames

mark's family was jewish so he regularly

attended

classes at the synagogue in wurzburg

where on a day like

any other day he met joseph sax marcus

and joseph's became

fast friends developing bonds that ran

so deep that it will last for

generations to come

the next few decades saw mark's family

witnessing the rising persecution and

anti-semitism in germany they made a

decision to migrate to america

a land of social and economic

opportunity

something that their own country had

denied them so

during the first wave of jewish

immigration to america

mark came along with thousands of other

jews to the land of opportunity

just as well because we all know what

happened to the jews who stayed behind

in germany

in the year 1848 mark became marcus and

his life took a turn prior to migration

marcus was a schoolteacher

once he was in the states he worked as a

merchant peddler for a while

but that wasn't enough for him he wanted

to do something

bigger something that excited him he had

confidence in his entrepreneurial

instincts

and in 1869 he set up a small

business in a one-room office on pine

street new york marcus bought promissory

notes from local merchants and sold them

to new york's commercial banks

promissory notes are financial

instruments that contain a written

promise

by one party to pay another party a sum

of money

either on demand or at a future day

marcus's regular clients included

wholesale jewelers

leather merchants and tanners the

success of this idea made marcus a man

who had

absolutely no background in finance a

pioneer in the commercial paper business

in 1882 marcus decided that he wanted to

expand

but he couldn't do it alone remember

joseph

marcus's friend from the synagogue well

his sons were married to two of marcus's

daughters

one of which was samuel who married

marcus's youngest daughter

and was invited to join the firm family

ties run deep in the history of goldman

sachs

in fact many of the firm's partners

intermarried families

for almost the first 50 years of its

inception

samuel who was born in july 1851 in

maryland

to parents that had also immigrated from

bavaria

and close friends to the goldmans was an

asset to the firm

at the age of 15 he worked as a

bookkeeper he started his career by

running a business that dealt with

boards

glass and mirrors with the addition of

samuel in 1882

the firm became goldman and sachs and

the already thriving business reached

new heights under this

very partnership a credit report from

1882 described samuel as being

conservative

and not speculative he was meticulous

and reliable

this combined with the diligence

accuracy and persistence of marcus

helped them become one of the largest

banks in new york

samuel was committed to establishing the

bank's reputation and expanding its

business based on a proven formula of

success

he continued to give special attention

to commercial papers he wanted to ensure

that when the firm

joined new york stock exchange they

would lead in

sales of commercial papers back then

samuel was also

one of the few people to realize the

hidden potential in companies

raising funds by issuing stock along

with his friend philip

lehman of lehman brothers he helped many

large companies

raise money this way marcus's son henry

and his other son-in-law came aboard a

few years after samuel and goldman

and sax became goldman sachs and co the

name that we associate with it today

marcus was succeeded by samuel and henry

who became senior partners

after his death in 1904. samuel had the

insight to see the tremendous benefit

that the firm would have from expanding

to the overseas markets

he personally traveled to different

countries to establish connections that

would help the firm

he strongly believed that they would be

serving all

americans fairly only when they had a

significant

international presence samuel continued

the great work

until he retired in 1929 he died a few

years later in 1935

even though they weren't around

physically marcus and samuel created a

foundation so strong

that by the beginning of the 20th

century goldman sachs had become famous

for being financially

innovative they picked up this art from

their founder himself

in 1930 sydney j weinberg was in charge

here's an interesting fact sydney began

his career with goldman sachs

as a janitor's assistant hard to believe

considering they now hire right out of

the top schools

in the world sydney was so successful in

his role that he is now known

as the father of modern day goldman

sachs the beginning was hard as

all beginnings are especially because of

the hard-hitting great depression

they managed to find their way through

but not without encountering some small

hiccups here

and there sailing their way into the

21st century

and found trouble again the collapse of

the technology bubble

high profile scandals and the financial

crisis of 2008

made it a difficult time for the company

but in just a couple of years

they were back on their feet stronger

than ever before too

they launched new platforms all equipped

to deal with the new world

in 2016 they launched marcus by goldman

sachs

to help people manage their debt better

though goldman sachs may seem like just

another bank on wall street what sets

them apart is the strive for

excellence at no stage of their journey

did they sacrifice the values that their

founders tried

so hard to build they have remained

committed to client service and teamwork

and have managed to maintain the

exceptionally high standards

that they are known for goldman and

sachs are considered to be one of the

most

influential financial institutions in

the world

always looking for new ways to do things

in this long

150 year journey goldman sachs

consistently

delivered the very best for their

customers

this goes to show that with good

instincts and a little bit of luck

you can do great things goldman sachs is

one of the biggest banks

in the world and they're not going

anywhere

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