Financial History Issue 132 (Winter 2020) | Page 33

WHERE ARE
THEY NOW?
Shearson,
Hammill & Co.
By Susie J. Pak
Shearson, Hammill & Co.
Edward Shearson (1863–1950) was a
native of Galt, Ontario, Canada and the
son of a grain dealer. His father, William
A. Shearson, was born in Lancashire, Eng-
land and immigrated to the United States
in 1855. His mother, Marion Low, was an
American of Scottish descent. Shearson
attended Collegiate Institute in Ontario.
He started working in 1880 for the Chi-
cago Northwestern Railroad as an office
boy, later moved on to become a clerk
in the auditor’s office of the Chicago and
Northern Pacific Railway and eventually
became the first controller of the US Steel
Corporation.
In 1902, Shearson joined with Caleb
Hammill (1863–1921), a Chicago native
and the grandson of a commercial mer-
chant, to create the partnership of Shear-
son, Hammill & Co. In an industry where
relationships were key to one’s success,
American banker and financier
Sanford “Sandy” Weill, 1981.
Shearson’s ties to US Steel proved to be a
major asset to the new firm. In the same
month the firm was organized, it became
the manager of the underwriting syndi-
cate for the “American Steel Foundries”
combination, whose original subscribers
included Charles M. Schwab and E.H.
Gary of US Steel.
According to The New York Times,
“[Shearson] had been closely associated
with Judge Elbert H. Gary, the organiz-
ing genius in the creation of US Steel, and
with Charles M. Schwab and other leading
figures in the steel industry in that era.”
The firm “was known throughout Wall
Street in the first quarter of the century
as the ‘steel house,’ because of its contacts
with leading figures in the steel industry.”
In the early 20th century, the firm
expanded by establishing “separate invest-
ment departments and [absorbing] securi-
ties business in other financial centers.” By
World War I, it had offices in New York,
Chicago, Minneapolis, St. Paul, St. Louis
and Montreal. The firm continued to have
“a bullish attitude toward the market” even
after the Crash of 1929. During the Great
Depression, the firm “escaped the financial
grief which has beset other houses that
have tried to carry their best customers
through a slump on their own credit.”
According to The New York Times,
“Insiders say one factor in its success [was]
its consistently hard-boiled policy on mar-
gin accounts, dating back to the panic of
1907. An undermargined customer [was]
promptly sold out, no matter how big nor
how active a client he [had] been.” In 1930,
the firm released a market letter that said,
“We are not in sympathy with the extreme
wave of pessimism which now prevails….
We believe a gradual improvement in
business is under way.”
During and after World War II, a new
period of expansion and leadership began
for the firm. Edward Shearson retired in
1940 (and Hammill died in 1921). In 1941,
Shearson, Hammill & Co. took over the
Chicago office of Winthrop, Mitchell &
Co., and Leeds Mitchell, a Yale graduate
who had been the president of the Chi-
cago Stock Exchange in 1922 and 1923,
joined the firm. Robert Van Tuyl joined
the firm in 1946; he was introduced to the
firm by two Shearson, Hammill executives
with whom he had worked while serving
as assistant chief of naval operations for
inventory control during World War II.
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