Powerhouse

200 years old: Almost from its birth in 1800, Alex. Brown Inc. has been instrumental in the life of the city. It has prospered, despite some trying moments.

May 21, 2000|By Bill Atkinson | Bill Atkinson,SUN STAFF

Mayo A. Shattuck III was tired and fighting jet lag from the flight across the Atlantic when he ducked into the eight-story, honey-colored building at 1 Great Winchester St. in The City, London's financial district.

His mood on Tuesday, May 11, 1999, mirrored the weather: gray and a chilly 51 degrees.

Shattuck, the former president and chief operating officer of Alex. Brown Inc., and a top executive of the firm's parent, Bankers Trust Corp., had made the all-night flight for one purpose: to preserve the Alex. Brown name that was on the brink of extinction.

Six months earlier, Deutsche Bank had announced plans to acquire Bankers Trust for $10.2 billion, the largest takeover ever of an American financial institution by a foreign company. Although the deal still had not cleared regulatory scrutiny, the meeting in London had been called to settle nagging details.

Twenty executives met in the secured management boardroom on the seventh floor. Unlike the rest of Winchester House, which was furnished with extravagant sculptures and paintings, the boardroom seemed stark with its V-shaped conference table and a television camera ready to broadcast the 9:30 meeting to Deutsche Bank AG's worldwide offices.

First to speak was a representative of McKinsey & Co., the world's premier consulting firm, which had been retained to study the market value of the Alex. Brown name. He was neutral, advising neither retention nor elimination of the name.

Alexander Labak, Deutsche Bank's top man for marketing, spoke next, adamantly recommending that the Alex. Brown name be dropped once the acquisition of Bankers Trust was completed.

Then it was Shattuck's turn. Deutsche Bank, he said, had to show "respect to the American legacy" of Alex. Brown.

The legacy, he pointed out, far transcended being the oldest investment house in the United States. The firm was perhaps the single most instrumental factor in Baltimore's progression into a vibrant, modern and sophisticated city.

It had brought running water to Baltimore, created the city's first unified transportation system, helped launch the B&O Railroad Co. and expanded power to homes and businesses by reorganizing the fragmented and warring electric companies.

Alex. Brown also was an advocate for the needy, forming a city-wide organization to help the poor, and it helped establish a private board to preserve the extensive Walters art collection. Once, it bailed out struggling firms in the city with its own money; and it launched Maryland's massive bridge-building program.

Shattuck warned that venture capitalists and clients were already telling him that if the name was lost, it would signal that the firm was no longer taking emerging growth companies public and handling their mergers and acquisitions."I had to win the argument," he recalled.

"I had thousands of employees waiting for the answer."

Labak listened, but remained skeptical. Frustrated, Shattuck finally told the group: "If you want to take the responsibility for the defections of hundreds of employees and clients off my hands, I yield to you."

At 5:30 p.m. -- eight hours after the discussion began -- Labak and the others were won over. "It was a draining exercise," Shattuck recalled. "I was relieved and elated."

Mayo Shattuck hadn't felt such excitement in months, not since Alex. Brown had given up nearly 200 years of independence by selling to Bankers Trust in April 1997.

Today, as Alex. Brown stands at the threshold of its third century, its future is more promising than anyone imagined just two years ago.

Alexander Brown's journey

If Alexander Brown hadn't had a short fuse, there would have been no name for Mayo Shattuck to fight for.

Brown was in his mid-30s, with a wife and four sons, and running a thriving linen-auction business in the booming port city of Belfast, Ireland, in the late 1790s. But underneath he was smoldering. There were clashes between Catholics and Protestants, and a plot by the "United Irishmen" to overthrow the Irish government tore at the country. The final straw for Brown came when the British government abolished Ireland's Parliament and dictated how politics and business would be conducted.

Fed up with what he considered unnecessary meddling by England, Brown boarded a ship bound for America with his wife and their eldest son, leaving the three younger boys at school in England.

There was a fall chill in the air when they arrived in Baltimore harbor in 1800, joining Brown's younger brother, Stewart, who had fled Ireland in 1796 and settled in the city a year later as a general merchant.

Baltimore was bustling. It was one of the largest and richest cities in the country, and the port teemed with ships carrying flour, wheat and tobacco to Philadelphia, Alexandria, Norfolk and Richmond.

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