Portland Branch Office

Made in Maine

In August 1935, a train raced north through the hot New England night, bound for Maine. Onboard were four distinguished partners of the Morgan Bank: George P. Whitney, Russell Leffingwell, S. Parker Gilbert, Sr. and Harold Stanley. With them was their lawyer, Lansing Reed. Each carried a memorandum titled “Proposed Organization XYZ Corporation.”
A car met their train in Rockland and drove them to a dock on Penobscot Bay, where they boarded a handsome 75-foot launch of senior Morgan partner Thomas Lamont. It ferried them to his house on North Haven Island, where they were to hold a secret summit.
At Sky Farm, a large yellow clapboard house overlooking the bay, the men sat in heavy Adirondack chairs on the 100-foot-long porch – not to admire the view, but to talk intensely. To pursue the securities business, some would have to leave J.P. Morgan & Co. (capital $340 million) to start an investment bank capitalized at just $7.5 million. There were a host of details to work out.
Who would lead this new entity? Late in the afternoon, one of the Morgan partners remarked, “Harold has been sitting quietly over there at the side of the room. He is my candidate for president.”
Harold Stanley, fifty years old, with his prematurely gray hair and steady eyes, was a figure of great stature on Wall Street. Even in college he’d been a high achiever, popular in his class at Yale and a star athlete. An expert in utility finance, he had built and led the securities business at Guaranty Trust Company before being invited to join the Morgan partnership as head of investment banking. He was known for his statesmanlike character. Judge Harold Medina would later pay tribute to “the absolute integrity of Harold Stanley.”
Not present but equally on the group’s mind was Henry Morgan, thirty-five, grandson to the legendary J. Pierpont Morgan and the son of J.P. Morgan Jr., known as Jack. It was Jack Morgan who had appeared before the Pecora hearings of the U.S. Senate Banking Committee on May 23, 1933, and famously stated his firms’ guiding principle: to think always of doing “only first-class business, in a first-class way.”
Henry Morgan brought the powerful Morgan name and heritage to the new firm. He brought even more: Henry was not only keeper of traditions but also the source of important business contacts throughout the United States and Europe. He was able to act, in his words “as moderator and a team captain” among a group of strong, talented partners.
When the Porch Meeting ended, Lamont’s boat returned the guests to the mainland, their decision made. The XYZ Corporation would be Morgan Stanley and Co. Incorporated with Harold Stanley as president and Henry Morgan treasurer and secretary. On the boat trip back, Lansing Reed praised Harold Stanley for his unselfish decision – giving up his partnership in the world’s greatest private banking firm to lead this new venture in the face of severe uncertainties.
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