Financial History Issue 124 (Winter 2018) | Page 16

A check for $642,600,000, believed to be the largest ever written for investment purposes to date, was handed over to the Ford Foundation by Blyth and Co., senior member of the underwriters group, which handled the sale of Ford stock to the public, 1956. by the Gold Rush and traveled to Califor- nia on horseback in 1849. In 1857, he estab- lished a grocery business in Sacramento with Lewis Gerstle, a fellow Bavarian immigrant, who later became his brother- in-law. After the Great Flood of California devastated the city in 1862, Sloss and Gers- tle moved to San Francisco to open a stock brokerage firm, and in 1868, the partners expanded their interests after Secretary of State William Seward purchased the terri- tory of Alaska from Russia. Sloss and Gerstle were aided by Gustave Niebaum, a Finnish immigrant from the Russian empire, who was consul of Russia to the United States and had worked for the Russian-American Company, a chartered Russian firm that had “exclusive trading control over Alaska and Russian America since the late 18th century.” With other partners, they created the Alaska Com- mercial Company and set up a network of trading posts in the territory. Later they obtained a proprietary lease for the seal fur trade from Congress. After the lease expired in 1890, the company expanded into “a variety of enterprises including salmon canneries, a tannery, mines, trans- portation, utilities and especially land rec- lamation and speculation in California.” From the time of their arrival in Califor- nia, Sloss and his partners combined eco- nomic activity with social development. They became part of a close knit, influen- tial network of “San Francisco’s ‘first Jew- ish families,’ sometimes referred to as ‘The Gilded Circle.’” After Sloss’s death in 1902, Louis Sloss & Co. continued as a family holding company. It was revived in 1909 as an investment bank, an event that was precipitated by the economic development of Sacramento Valley. The newly-incorporated Louis Sloss & Co., Inc. “went to work chiefly selling first mortgage bonds in the Natomas Consoli- dated… a gold-dredging company…,” in which the Sloss family were principals. Having entered into the relatively unfa- miliar territory of bond financing, how- ever, the family decided to bring in new men from outside the family to manage the firm. On the recommendation of the president of the Bank of California, Frank B. Anderson, the family hired Charles R. Blyth and Eugene R. Hallett. The son of a bank cashier, Blyth was a native of Ohio and a graduate of Amherst College. He began working as a dealer in commercial paper for the Chicago branch of Boston firm George H. Burr & Co. and moved to San Francisco with the firm in 1907. He started with Louis Sloss & Co. in 1909. Blyth was joined by Hallett, who came from the San Francisco branch of N.W. Halsey & Co, a New York bond house founded by Noah W. Halsey at the turn of the century. In due course, the firm hired four men to sell bonds underwrit- ten by the firm: Dean G. Witter, a native of Wisconsin who was raised in north- ern California, and John D. Hartigan, a Nebraska native, joined the firm in 1910. Two years later, George C. Leib, a Ken- tucky native, and Roy L. Shurtleff, a Cali- fornia native, were hired. Though from different parts of the United States, Witter, 14    FINANCIAL HISTORY  |  Winter 2018  | www.MoAF.org Hallett, Shurtleff and Hartigan were all graduates of the University of California. Despite hopeful beginnings, the early days of the 20th century were challenging for the firm. According to the company history, the Panic of 1907, the Congres- sional Money Trust investigation and the passage of the Federal Reserve Act created new scrutiny and regulation for the bank- ing industry, leading the Sloss family to reconsider their business. Further details provided by Roy Shurtleff’s oral history in 1982 indicate that the family encoun- tered dire economic difficulties as land development in the Natomas and West Sacramento declined. In 1914, the Sloss family made the deci- sion to leave investment banking, concen- trating their family holdings in their core businesses. Blyth, Witter, Leib, Hartigan and Shurtleff decided to strike out on their own and form Blyth, Witter & Co., special- izing in corporate and municipal bonds. Blyth, Witter & Co. (1914) Despite the break with the Sloss firm, the new partners were fortunate in that they could build on Sloss’s commercial net- work, which the San Francisco Chronicle called “one of the best sales organizations ever built on this coast.” Their first large account was for a contact Charles Blyth made while at Louis Sloss & Co.: the Mt. Whitney Power & Electric Company of California. This later led to a “long and valued relationship with the Bank of Cali- fornia.” These ties helped the young firm