Kenneth Silber a senior editor at Research, a magazine for financial advisors reviews a recent book about the problems that led to Lehman’s declaring bankruptcy in 2008. On September 15, 2008, the firm filed for Chapter 11 bankruptcy protection following the massive exodus of most of its clients, drastic losses in its stock, and devaluation of its assets by credit rating agencies. The filing marked the largest bankruptcy in U.S. history

The new book The Last of the Imperious Rich: Lehman Brothers, 1844-2008, by Financial Times journalist Peter Chapman, gives a fairly cursory treatment to the once-great financial institution’s pathetic demise, with CEO Dick Fuld desperately phoning around Wall Street and Washington for a bailout that never came. Lehman Brothers’ bankruptcy — initially touted as free-market tough love — soon raised the prospect of banks collapsing like dominoes and thus ushered in an era of massive bailouts.

Chapman’s book takes a much longer view, tracing the bank’s history from its humble origins (it began as immigrant Henry Lehman’s peddling business in the mid-19th-century South) to soaring heights of wealth and power for much of the 20th century, and subsequently through a decline over several decades that culminated in the 2008 collapse.

Lehman Brothers did much to build the U.S. economy, funding and fostering such companies as Sears, Woolworth’s, Macy’s, RCA, Kerr-McGee, Pan Am and Digital Equipment. For decades, Lehman Bros. had a more prestigious name than, say, Goldman Sachs, a onetime collaborator that had not quite made it to Wall Street’s top tier.

Political connections were part of the Lehman culture. Herbert Lehman, once a partner at the firm, became New York’s New Deal Democratic governor and later a U.S. senator. Robert (Bobbie) Lehman, the bank’s top partner from the 1920s to the 1960s, was on good terms with presidents of both parties. The United Fruit Company, known to history for its embroilment in Central American and Caribbean politics, was a key Lehman client.

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