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Bache & Co.

From Alfawiki
Bache & Company
Company typePublic (from 1971)
IndustryFinancial services, securities
Founded1879
FounderJules S. Bache (restructured in 1892)
Defunct1991 (brand discontinued)
FateAcquired by Prudential Financial in 1981; brand discontinued in 1991
SuccessorPrudential-Bache Securities, later Prudential Securities, now part of Wells Fargo investment banking division
Headquarters
New York
,
United States
Key people
Jules S. Bache, Harold L. Bache
Number of employees
6,500 (circa 1979)

Bache & Company—which later became known as Bache Halsey Stuart Shields Incorporated—was a securities firm specializing in stock brokerage and investment banking services. Established in 1879 and headquartered in New York, New York, the company was acquired by Prudential Financial in 1981, resulting in the creation of Prudential-Bache Securities. The Bache brand was discontinued in 1991 when the business transitioned into Prudential Securities, which eventually evolved into part of Wells Fargo’s investment banking division following its purchase of Wachovia Securities.

Prudential separated the commodities and financial derivatives operations, reviving the Bache name in 2003 as Prudential Bache. Later, in July 2011, Jefferies Group, Inc purchased the Bache Institutional Group for $430 million, renaming it Jefferies, Bache.

Origins and formative years

The company traces its roots back to 1879 with the founding of Leopold Cahn & Co., a brokerage and investment banking establishment. In 1892, Jules S. Bache—Leopold Cahn’s nephew—restructured the firm under the name J.S. Bache & Co. Over fifty years, Jules Bache developed the firm into a pioneering and prominent brokerage enterprise.

By 1890, the firm had expanded to include a second office in New York and a branch in Albany—the first brokerage branch equipped with direct wire communication to its main office. Early clientele featured notable financiers such as John D. Rockefeller Sr., Edward H. Harriman, and Jay Gould.

During the Panic of 1907, Bache managed trading volumes reaching up to 200,000 shares daily, establishing itself as a leader in commodities trading.

In the 1920s, Bache was instrumental in financing industries including railroads, automotive manufacturing, and mining. It held significant interests in Chicago and the Great Western Railway, as well as controlling the Ann Arbor Railroad. The firm also played a crucial role in founding and expanding the Chrysler Corporation.

Throughout the Crash of 1929, Bache minimized exposure by tightening customer credit limits and avoided holding proprietary stock or investment trust positions. During the 1933 Bank Holiday, it gained prominence by providing currency to clients across major urban centers.

World War II prompted closure of most international branches except for London, which continued operations. The firm was among the first on Wall Street to employ women to fill wartime vacancies and introduced an employee profit-sharing program—an industry first at that time.

Period from 1944 to 1981

During World War II, under Jules Bache’s leadership until his passing in 1944, Bache & Co. emerged as a leading market maker and retail distributor of U.S. government bonds. The firm innovated with promotional "Road Shows" featuring entertainers such as movie stars and acrobats. It also supported companies transitioning production from automobiles to military aircraft.

Following Jules Bache’s death, his nephew Harold L. Bache assumed leadership and shortened the company name to Bache & Company. The firm was among the earliest American investors in postwar Japan, launching a successful Japan Fund mutual fund. In the 1950s, it spearheaded expansion efforts of U.S. brokerage firms into international markets.

By the mid-1960s, Bache & Co. ranked as the second largest retail brokerage firm in the United States after Merrill Lynch, although it struggled to break into elite wholesale investment banking firms such as Morgan Stanley and Goldman Sachs. Harold Bache maintained close operational control from headquarters at 36 Wall Street. The firm’s research department included prominent analysts like Charlie Tatham and Harvey Milk—the latter managing analysts prior to his departure in 1966.

In 1971, Bache became only the second major brokerage firm to go public. Its growth continued through acquisitions including Chicago-based investment bank Halsey, Stuart & Co. in 1974 and Shields Model Roland—a post-WWII entity formed by merging Shields & Co. with Model, Roland & Stone.

At its centennial celebration in 1979, Bache reported $151 million in capital with a shareholder base exceeding 10,000 individuals and a workforce of more than 6,500 employees, including 2,500 account executives. Its key subsidiary, Bache Halsey Stuart Shields Incorporated, held memberships on 59 securities and commodities exchanges throughout North America and abroad. Operating from 176 offices spanning 143 cities across 11 countries plus locations in the Virgin Islands and Puerto Rico, it maintained a global communications network transmitting over 50,000 words of financial information daily while serving hundreds of thousands of clients—from individual investors to large pension funds and institutional accounts.

Prudential Financial Acquisition

In 1981, Prudential Financial purchased Bache Halsey Stuart Shields Incorporated for $385 million. A decade later, in 1991, Prudential phased out the Bache brand and rebranded the division as Prudential Securities. Subsequently, in 2003, Prudential merged its retail brokerage operations with those of Wachovia Corporation, resulting in the creation of Wachovia Securities.

Despite the joint venture with Wachovia, Prudential maintained control over the commodities and financial derivatives segments. Although the Bache name had been initially discontinued, these units were reintroduced under the Prudential Bache brand in 2003.

Jefferies Acquisition

Jefferies Group, Inc acquired Prudential Bache from Prudential in 2011 for $430 million. Following this acquisition, the entity was renamed Jefferies Bache and served as Jefferies Group’s division specializing in foreign exchange, commodities, and listed derivatives. This division operates with a workforce exceeding 400 employees distributed across five international offices.

Divestiture by Jefferies and Ongoing Operations

On April 8, 2015, Jefferies retired the Bache name once more by divesting its commodities trading business to Société Générale.

Distinguished Alumni

Corporate Names

Leopold Cahn & Co. (1879–1892) J.S. Bache & Co. (1892–1944) Bache & Co. (1944–20??)

References

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