Union Securities
Encyclopedia
Union Securities Corporation was an independent investment banking
firm in existence from 1938 through its acquisition in 1956 although the name would survive through 1972. Union Securities was created in 1938 as a spinoff of the investment banking operations of J. & W. Seligman & Co.
as a result of the Glass-Steagall Act
.
In 1956, the firm merged with Eastman Dillon & Co. The Union Securities name remained until 1972, when what was then known as Eastman Dillon Union Securities merged with Blyth & Co. to form Blyth, Eastman Dillon & Co.
That firm was later acquired by Paine Webber
, which is today a part of UBS
was founded as an importing house by Joseph Seligman
and his brothers in New York in 1846. After the American Civil War
ended, the eight Seligman brothers decided to go into the banking business and a year later, Jesse Seligman went to Frankfurt, Germany, to open a bank, where they were the first American banking firm to sell United States Government bonds in Europe. In the post-Civil War robber baron
era, the firm invested heavily in railroad finance, in particular acting as broker of transactions engineered by Jay Gould
. Later, in 1876, the Seligmans joined forces with the Vanderbilt family
to create public utilities in New York.
In the early 20th century the firm's predecessor backed the construction of the Panama Canal
. In this period, J.& W. Seligman & Co. Inc. underwrote the securities of a variety of companies, participating in stock and bond issues in the railroad and steel and wire industries, investments in Russia and Peru, the formation of the Standard Oil Company, and shipbuilding, bridges, bicycles, mining, and a variety of other industries. In 1910 William C. Durant
of the fledgling General Motors
Corporation gave control of his company's board to the Seligmans and Lee, Higginson & Co.
in return for underwriting $15 million worth of corporate notes.
However, by the 1930s, Seligman's investment banking business was declining. In 1938, in response to the Glass-Steagall Act
, the firm spun off its securities underwriting business as Union Securities. The firm was formed with $1 million of cash and an additional $4 million of unfunded subscriptions. Union Securities established a successful track record during the 1940s and 1950s in as a merchant banking firm, focusing on acquiring and restructuring companies.
Union Securities merged with securities broker Eastman Dillon & Co. in 1956 to form Eastman Dillon Union Securities & Co. The combined firm had assets of more than $17 million and had completed more than $770 million in underwriting of corporate issues and municipal bonds since the beginning of 1955. An intermediate financing portion of the business was not sold in the merger, and that business was renamed Tri-Continental Financial Corporation. In 1979, Eastman Dillon (later Blyth, Eastman Dillon & Co.
) was acquired by securities broker Paine Webber
, which in 2000 became part of financial conglomerate UBS AG
.
Investment banking
An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities...
firm in existence from 1938 through its acquisition in 1956 although the name would survive through 1972. Union Securities was created in 1938 as a spinoff of the investment banking operations of J. & W. Seligman & Co.
J. & W. Seligman & Co.
J. & W. Seligman & Co., founded in 1846, was a prominent U.S. investment bank c. 1860s–1920s until the divestiture of its investment banking arm in the aftermath of the Glass–Steagall Act. The firm was involved in the financing of several major U.S. railroads in the 1870s and the construction of...
as a result of the Glass-Steagall Act
Glass-Steagall Act
The Banking Act of 1933, , was a law that established the Federal Deposit Insurance Corporation in the United States and introduced banking reforms, some of which were designed to control speculation. It is most commonly known as the Glass–Steagall Act, after its legislative sponsors, Senator...
.
In 1956, the firm merged with Eastman Dillon & Co. The Union Securities name remained until 1972, when what was then known as Eastman Dillon Union Securities merged with Blyth & Co. to form Blyth, Eastman Dillon & Co.
Blyth, Eastman Dillon & Co.
Blyth, Eastman Dillon & Co. was an American investment bank founded in 1914. Blyth Eastman operated for many years as one of the only major investment banking firms on the West Coast of the U.S. At the time of its acquisition, Blyth Eastman had more than 700 finance related employees with over...
That firm was later acquired by Paine Webber
Paine Webber
Paine Webber and Company was an American stock brokerage and asset management firm that was acquired by the Swiss bank UBS AG in 2000. The company was founded in 1880 in Boston, Massachusetts, by William Alfred Paine and Wallace G. Webber. Operating with two employees, they leased premises at 48...
, which is today a part of UBS
History
The firm's predecessor, J. & W. Seligman & Co.J. & W. Seligman & Co.
J. & W. Seligman & Co., founded in 1846, was a prominent U.S. investment bank c. 1860s–1920s until the divestiture of its investment banking arm in the aftermath of the Glass–Steagall Act. The firm was involved in the financing of several major U.S. railroads in the 1870s and the construction of...
was founded as an importing house by Joseph Seligman
Joseph Seligman
Joseph Seligman was a prominent U.S. banker, and businessman. He has been described as a "robber baron". He was born in Baiersdorf, Germany, emigrating to the United States when he was 18. With his brothers, he started a bank, J. & W. Seligman & Co., with branches in New York, San Francisco, New...
and his brothers in New York in 1846. After the American Civil War
American Civil War
The American Civil War was a civil war fought in the United States of America. In response to the election of Abraham Lincoln as President of the United States, 11 southern slave states declared their secession from the United States and formed the Confederate States of America ; the other 25...
ended, the eight Seligman brothers decided to go into the banking business and a year later, Jesse Seligman went to Frankfurt, Germany, to open a bank, where they were the first American banking firm to sell United States Government bonds in Europe. In the post-Civil War robber baron
Robber baron
A robber baron or robber knight was an unscrupulous and despotic nobility of the medieval period in Europe, for example, Berlichingen. It has slightly different meanings in different countries. In modern US parlance, the term is also used to describe unscrupulous industrialists...
era, the firm invested heavily in railroad finance, in particular acting as broker of transactions engineered by Jay Gould
Jay Gould
Jason "Jay" Gould was a leading American railroad developer and speculator. He has long been vilified as an archetypal robber baron, whose successes made him the ninth richest American in history. Condé Nast Portfolio ranked Gould as the 8th worst American CEO of all time...
. Later, in 1876, the Seligmans joined forces with the Vanderbilt family
Vanderbilt family
The Vanderbilt family is an American family of Dutch origin prominent during the Gilded Age. It started off with the shipping and railroad empires of Cornelius Vanderbilt, and expanded into various other areas of industry and philanthropy...
to create public utilities in New York.
In the early 20th century the firm's predecessor backed the construction of the Panama Canal
Panama Canal
The Panama Canal is a ship canal in Panama that joins the Atlantic Ocean and the Pacific Ocean and is a key conduit for international maritime trade. Built from 1904 to 1914, the canal has seen annual traffic rise from about 1,000 ships early on to 14,702 vessels measuring a total of 309.6...
. In this period, J.& W. Seligman & Co. Inc. underwrote the securities of a variety of companies, participating in stock and bond issues in the railroad and steel and wire industries, investments in Russia and Peru, the formation of the Standard Oil Company, and shipbuilding, bridges, bicycles, mining, and a variety of other industries. In 1910 William C. Durant
William C. Durant
William Crapo "Billy" Durant was a leading pioneer of the United States automobile industry, the founder of General Motors and Chevrolet who created the system of multi-brand holding companies with different lines of cars....
of the fledgling General Motors
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
Corporation gave control of his company's board to the Seligmans and Lee, Higginson & Co.
Lee, Higginson & Co.
Lee, Higginson & Co. was a prominent Boston-based investment bank during the 1840s to 1932, home of many members of Boston Brahmin establishment. The bank collapsed in the Swedish match scandal in 1932 while under the leadership of Jerome Davis Greene. Also known for financing the growth of...
in return for underwriting $15 million worth of corporate notes.
However, by the 1930s, Seligman's investment banking business was declining. In 1938, in response to the Glass-Steagall Act
Glass-Steagall Act
The Banking Act of 1933, , was a law that established the Federal Deposit Insurance Corporation in the United States and introduced banking reforms, some of which were designed to control speculation. It is most commonly known as the Glass–Steagall Act, after its legislative sponsors, Senator...
, the firm spun off its securities underwriting business as Union Securities. The firm was formed with $1 million of cash and an additional $4 million of unfunded subscriptions. Union Securities established a successful track record during the 1940s and 1950s in as a merchant banking firm, focusing on acquiring and restructuring companies.
Union Securities merged with securities broker Eastman Dillon & Co. in 1956 to form Eastman Dillon Union Securities & Co. The combined firm had assets of more than $17 million and had completed more than $770 million in underwriting of corporate issues and municipal bonds since the beginning of 1955. An intermediate financing portion of the business was not sold in the merger, and that business was renamed Tri-Continental Financial Corporation. In 1979, Eastman Dillon (later Blyth, Eastman Dillon & Co.
Blyth, Eastman Dillon & Co.
Blyth, Eastman Dillon & Co. was an American investment bank founded in 1914. Blyth Eastman operated for many years as one of the only major investment banking firms on the West Coast of the U.S. At the time of its acquisition, Blyth Eastman had more than 700 finance related employees with over...
) was acquired by securities broker Paine Webber
Paine Webber
Paine Webber and Company was an American stock brokerage and asset management firm that was acquired by the Swiss bank UBS AG in 2000. The company was founded in 1880 in Boston, Massachusetts, by William Alfred Paine and Wallace G. Webber. Operating with two employees, they leased premises at 48...
, which in 2000 became part of financial conglomerate UBS AG
UBS AG
UBS AG is a Swiss global financial services company headquartered in Basel and Zürich, Switzerland, which provides investment banking, asset management, and wealth management services for private, corporate, and institutional clients worldwide, as well as retail clients in Switzerland...
.