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Goldman Sachs: The Culture of Success

by Lisa Endlich

Little, Brown pounds 20

Not all that is gold glitters. Admittedly, New York's financial district is no bad weekend destination. Beneath the twin-tombstone enormity of the World Trade Center, various banks have hewn their own, objectively impressive, architectural monuments to American prosperity, forming a fitting backdrop for those who take the boat yards away to inspect first Liberty herself, and then Ellis Island, shrine to US immigration.

But deep within Wall Street's inner warren of alleys nestles the Goldman Sachs building, a shorter, dull brown, concrete creature with a cloistered entrance that brings anyone who nears its doors out of the sun's reach. A shadow falls. The lights are on. Furrowed inmates in almost digitally perfected casual gear come and go. Why not? Sunday is, after all, the first day of the working week.

This is Goldman Sachs, Led Zeppelin-style supergroup of investment banking. Lisa Endlich's book attempts to shine deep into those dark, gloomy corners of Manhattan. It was theoretically possible that Ms Endlich would use her insider experience to pen a most colourful cash-and-tell expose of this most secretive, successful finance house. But life is hard, and the author should not be chided excessively for being deferential.

Instead, she has, somewhat circuitously, hit a relative jackpot by writing two books in one. The first, comprising mainly the introduction and later chapters, parades a Valhalla of financial legend, often reading like a cross between an annual report and Soviet-era Pravda. The second, nestling behind this buffer zone, is a fine read about the rise and subsequent antics of a major league investment bank.

But what dominates, sadly, is a Boy's Own Story of high finance, a kind of demented baseball fan's view of a team that can do no wrong. There can be few seriously intended quality reads with such a frequency and intensity of praise for a corporate culture and its helmsmen. Sometimes we drown in an Olympic-sized pool of slavish Goldmania: she almost wears out the pages entirely in her three-times-a-sentence crusade favouring energy, conquest and evolutionary zeal over "natural complacency". Miraculously, only half the text suffers in this way. Elsewhere - possibly because she is handling material not directly describing former colleagues - the style transmogrifies to deliver some ripping yarns of a classic American-immigrant-inspired success story.

The account of the 1920s roller-coaster is, if brief, duly riotous. Even the 1980s story - more haunting for its proximity - has its moments: one most fetching when a new boldness determines that, "while clients were still vitally important, they were now only part of the profit picture". Corners are cut. Maxwell is invited on board because, although you must "know your client", he was also, well, " too profitable for the firm to ignore". Further gruesomeness is in store for those who persevere. A new monster emerges here from the business bestiary: a boss so manic that he phoned hapless underlings at 3am to check that the Goldman formula was imprinted on their subconscious. "Client service, integrity and teamwork", the half-dead wretch would intone. And? What else? Until Big Brother heard the magic "Strategic dynamism and a commitment to change", the telescreen continued to shriek.

Modern era partners - supposedly in magical Midas-land - found themselves subject to equal inhumanities. Whole lives were blighted when, despite pocketing millions, previously proud souls fell to black dogs because they had missed out slightly to their peers. A new system ensured those deemed "slow in the step" - most heinously by daring to dig escape tunnels from the building a little early on a Friday - were "nudged toward the door". Most baroque is the final eradication of the canny immigrant street kids that had set Goldman Sachs on its way in the first place.

Suddenly the svelte MBAs, from Wharton, Harvard, Stanford, MIT and Columbia, swing in. One, we hear, is no "scrappy kid from the streets but a high- class banker". Well, yes.

High-octane hagiography apart, a rather sharp New World tang may alarm more eastern Atlantic readers. Certain near omissions cause unease. Goldman Sachs's first 30 years are dispatched in about three pages. The first century huddles in around 40. Is this because these events have no relevance to the bracing, competitive modern realities? We itch for more about earlier giants, such as John Whitehead, John Weinberg, and his father Sidney Weinberg, chairman for 37 years.

Waddill Catchings, the rogue who almost destroyed them in 1929, glistens all too briefly. Gus Levy, who recruited traders not by crushing measures of conformity but by playing them at bridge and poker, begs with every molecule of his eternal being for more air-time.

Ultimately, we seek to understand Goldman Sachs's share sale. Cautious throughout, Endlich does nonetheless betray an eerily short pause between the threatened partner exodus in 1994 that required the aged John Weinberg once more to invoke the heritage, and the 1996 initiative that set the same brethren on track to begin selling the firm. Against the old sage's advice, the deed was done. Very sadly, while she puts both sides of the flotation case, Endlich commits herself to neither, nor does she dare foretell the bank's future in its new ownership format.

She does make us feel we know Goldman Sachs better. The book is not in the same class as Ron Chernow's The House of Morgan, nor is it the Liar's Poker-style light read that current bull-market observers may crave. But it is, nonetheless, revealing.

Finally, some wisdom. First steps up the 1930's icon, Walter Sachs, who said of the spiv Catchings: "Most men can stand adversity; very few men can stand success ... he just went haywire." Next, as Sidney Weinberg remarked: "Money! Keeps coming in all the time and hardly means anything at all." Possibly, simply, this is best seen as a fine old Western prairie family story. Generations toil through adversity to till the land and build the business for those yet to come. There are heroes, standards, traditions. Everyone is proud.

Then in the 1990s the kids go to swanky colleges and sell the farm to buy some fast cars. Let's hope it makes them happy.

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