— Ch. 1 · Founding And Glass-Steagall Origins —
Morgan Stanley.
~5 min read · Ch. 1 of 6
The firm formally opened its doors for business on the 16th of September 1935, at 2 Wall Street in New York City. This specific date marked the birth of Morgan Stanley following a legal mandate from Congress. The U.S. Congress had passed the Glass, Steagall Act in 1933 to separate commercial and investment banking businesses under a single holding entity. J.P. Morgan & Co. chose to keep the commercial banking business rather than the investment side. Consequently, some employees left the parent company to form a new entity. Henry S. Morgan, the grandson of J.P. Morgan, and Harold Stanley were among those who departed. They joined partners from Drexel to establish this new organization. In its first year, the company operated with a 24% market share in public offerings and private placements. That figure represented US$1.1 billion in volume. The firm was involved with distributing US$100 million worth of debentures for United States Steel Corporation as the lead underwriter. It also obtained the distinction of being the lead syndicate in the 1939 U.S. rail financing.
Mergers And Corporate Evolution
On the 5th of February 1997, the company merged with Dean Witter Discover & Co., the spun-off financial services business of Sears Roebuck. Philip J. Purcell, the chairman and CEO of Dean Witter, continued to hold the same roles in the newly merged entity. John J. Mack became the firm's president and chief operating officer. Originally, the name chosen was Morgan Stanley Dean Witter Discover & Co. to avoid tension between the two predecessor firms. Eventually, in 2001, the name changed back to just Morgan Stanley. The merged firm began expanding overseas operations in 1999 when Mack set up a joint venture in India with local partner JM Financial. On the 19th of December 2006, Morgan Stanley announced the spin-off of its Discover Card unit. The bank completed this spinoff on the 30th of June 2007. In October 2020, the company completed its acquisition of E*Trade for $13 billion. This deal marked the biggest acquisition by a U.S. bank since the 2008 financial crisis. In March 2021, Morgan Stanley completed its acquisition of Eaton Vance. With that addition, the firm held $5.4 trillion of client assets across its Wealth Management and Investment Management segments.