Smith Barney Consulting Corp history

Another Philadelphian, Edward B. Smith, founded an investment banking firm bearing his name in 1892.

Responding to the shifting of the nation's financial center from Philadelphia to New York City, Barney's firm purchased a seat on the New York Stock Exchange in 1898 and later opened a New York office.

Barney retired in 1907 and was succeeded as senior partner of the firm by J. Horace Harding, who was married to one of Barney's six daughters.

Although Edward B. Smith & Co. quickly bought a seat on the New York Stock Exchange, it did not move the center of its activities to New York City until the 1920s.

The failure of the Wall Street firm of Farnum, Winter & Co. in 1932 led Barney to open branch offices in Chicago, Milwaukee, Minneapolis, and St Paul under the supervision of Wallace C. Winter.

Smith benefited from a New Deal act that forced the Guaranty Trust Co. to divest itself of its securities affiliate, Guaranty Co., in 1934.

Smith ran short of cash during a 1937 Wall Street slump and, in order to remain in the underwriting business, merged with Barney at the end of the year to form Smith, Barney & Co.

Charles Barney's grandson, Charles Barney Harding comes in and takes control in the 1940's.

Previously a private partnership, Smith, Barney became a corporation in 1964.

Also that year, the company introduced the Smith, Barney Equity Fund, a no-load diversified mutual fund aimed at achieving long-term capital growth. It played a part in 1968 in the merger of Bunker Hill Co. into Gulf Resources & Chemical Corp., Fairchild Publications into Capital Cities Broadcasting Corp., and MCA, Inc. into Spencer Gifts, Inc.

In the 1970's Smith Barney discovers it has a talent for both asset management and funds along with retail brokerage.

By mid 1972 this fund had consistently outperformed the various market indicators and had total net assets of $89.2 million.

In October 1975 Barney merged with another old-line investment firm, Harris, Upham & Co.

The combined firm became Smith Barney, Harris Upham & Co., which in turn became the principal unit of SBHU Holdings, a closely-held holding company, in 1977.

Smith Barney became one of five foreign investment banks accorded full-branch status in Japan in 1980 and expanded its European trading operation, which it moved from Paris to London.

In 1982, 34 individuals and institutions from Saudi Arabia, Kuwait, and Bahrain bought (at an estimated cost of $40 million) almost a quarter of Smith Barney through a specially formed holding company.

Our roots begin with Linden Thomas & Company's founder, Stephen L. Thomas, who began his career in Washington, DC with EF Hutton in 1987.

Smith Barney lost $53 million before taxes in 1988.

For the first nine months of 1995, the company had net operating earnings of about $560 million, with a return on equity of 23 percent.