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The Lehman Brothers story signifies grit

Lehmans may have taken irresponsible risks but the spirit that created the bank deserved to continue. It was, after all, the spirit of adventure, ambition and dogged determination.

columns Updated: Sep 15, 2018 16:39 IST
Banking crisis,Financial crisis,Market collapse
File photo of traders reacting after the US market collapse a decade ago(AP)

Yesterday was ten years since the collapse of Lehman Brothers and the financial crisis that it sparked off. A decade later, one of the most talked about plays in London is the story of this former investment bank. I saw it last week at the National Theatre and was riveted. It’s hard to believe that the bone dry story of a collapsed bank could make for such enthralling theatre. The audience sat spellbound through the entire three and a half hour production.

Called ‘The Lehman Trilogy’, the play tells the story of the bank and does this with just three characters on stage. To begin with, they play the three original Lehman brothers, Henry, Emanuel and Mayer. As the play develops, the three start to act as their own sons and nephews. Yet at every given moment, it’s perfectly clear who they are and, though detailed, the story they tell is both easy to follow and totally gripping.

It begins with the first business the Lehmans set up. It was a small fabric store in Montgomery, Alabama. If my memory is correct, it was some time in the mid-1840s. From this small venture the Lehmans took the next big critical step. They became middlemen buying cotton from nearby southern plantations and selling it on to northern mills. No one had done this before and the profits were remarkable.

The civil war hit them badly. But soon Emanuel, by then based in New York, expanded the family enterprise and they began to operate as middlemen for steel, rubber and other tradable commodities. It wasn’t long before the Lehmans realised that money was the best commodity to trade. They could make money by dealing in money and thus they became a bank. This inevitably expanded into a finance corporation with stocks and bonds replacing hard cash as the traded commodity.

The Second World War provided fresh opportunities for profit and soon the Lehmans established in Europe as well. Bobby was the last Lehman to head the family business. During his life he was the inspiration not just for greater profits but for a vision that set the company apart from almost every other. In a sense Lehman’s collapse began with his death though the bank itself continued for a bit longer.

This is not a naturally dramatic story and yet three men on stage made it gripping. To do so they used comedy and drama, satire and mimicry, soliloquies and silence. But above all else, they spoke directly to the audience. They weren’t speaking to each other but to everyone in the auditorium.

So that you never forget the denouement that ends the Lehman story, the play begins in the early hours of the morning after the bank’s collapse with a janitor cleaning the premises. It ends with the sound of an unanswered ringing phone — the call that confirmed there was no lifeline for the bank. The story of the Lehman family and their evolving business is told in between.

When the curtain fell on the last act, the audience rose as one to their feet. The applause was loud and continuous. No one seemed in a hurry to stop clapping and start walking out. But I couldn’t resist a twinge of sadness. Lehmans may have taken irresponsible risks but the spirit that created the bank deserved to continue. It was, after all, the spirit of adventure, ambition and dogged determination. At its height it was capitalism at its best.

Karan Thapar is the author of The Devil’s Advocate: The Untold Story

The views expressed are personal

First Published: Sep 15, 2018 16:35 IST