Baltimore was a vibrant city when George Mackubin struck out on his own. Although he was only a spindly 25-year-old, he was brash and supremely confident.

Having served two stints in brokerage houses, Mackubin knew there was money to be made, and he wanted his share.

One hundred years ago, Mackubin opened a brokerage firm in downtown Baltimore, a one-man firm, tucked away in a room in the old Baltimore Stock Exchange Building on German Street (now Redwood Street). If only he could see his company now.

Although it has undergone several name changes, Mackubin's modest creation has evolved into Legg Mason Inc.

The company has flourished despite the great Baltimore fire of 1904, two world wars, the crash of 1929, the Great Depression and the wave of mergers in the 1990s.

But Legg Mason isn't just a chronicle of survival; it is an illustration of how the company became a "crown jewel" in its industry. It manages $93 billion in assets -- more than any other regional investment house in the country -- has 4,350 employees, 128 brokerage offices and revenue topping $1 billion, and it dominates Baltimore's skyline, occupying one of the tallest office towers downtown with its name gleaming in large, gold block letters.

"There are very few firms that have lasted 100 years," said George Ferris, chairman of competitor Ferris, Baker Watts Inc., which has been in business for 99 years. "Legg Mason has had super management."

Yet, as Legg prepares for its annual meeting on Tuesday, questions remain about its future. Is it large and diverse enough to thrive against such huge companies as Citigroup, Merrill Lynch & Co. and Morgan Stanley Dean Witter & Co.? Is it positioned to handle a severe decline in the stock market? Will it follow in the footsteps of other Baltimore companies and sell out, especially because its top executives are nearing retirement?

"Legg Mason continues to impress me as being one of the most stable firms in a quickly changing industry," said Michael Flanagan, a brokerage analyst at Philadelphia-based Financial Service Analytics. "The greatest testament to Legg Mason's longevity is its single-minded pursuit to meeting the investment objectives of its clients."

George Mackubin couldn't have picked a better time to open up shop. Baltimore was buzzing in 1899. A city of 416,805 people, it was a thriving industrial town that went to work by the factory whistle. Garment shops on Eutaw Street churned out men's suits. Mills in Hampden-Woodberry spun out cotton cloth. Ships steamed into the harbor heavy with sugar, bananas and bat guano for fertilizer. And trains rumbled into town loaded with tons of copper, coal and iron.

The landscape abruptly changed in 1898 and 1899 as the families that controlled businesses began selling out to huge trust companies.

"Within the space of two years, the industrial base of Baltimore was sold out of town, lock, stock and barrel," Sherry H. Olson wrote in her book "Baltimore."

The sell-off left families and owners awash in cash, exactly what the fledging George Mackubin & Co. needed.

Mackubin's chances for success were probably greater than those of most men his age. He was from a wealthy family in Ellicott City. His father, James Mackubin, was a lawyer who owned a three-story mansion called MacAlpine, which had slaves to tend to the estate. His mother, Gabriella Peter, was a descendant of Martha Washington.

Mackubin was only 25, but he had picked up experience by working at two brokerage houses in the city and in 1896 borrowed $300 to buy a seat on the Baltimore Stock Exchange.

Eleven months after opening the firm, he hired G. Clem Goodrich, the son of a Presbyterian minister, 16 years Mackubin's senior, who worked at a clearinghouse in Baltimore that moved checks from bank to bank. In January 1900, two months after joining the firm, Goodrich was named partner, and the company was renamed Mackubin, Goodrich & Co.

Like other brokerages, the firm hung a chalk board on a wall and placed a bench in front of it so that clients could sit and watch the "board boy" chalk up the latest stock prices.

It was a thankless job, and the first two board boys left the firm shortly after being hired.

Legg, the board boy

The third board boy excelled. He was 19, and his name was John C. Legg Jr. In five years, he was a partner.

Legg "studied the investment business, and the more he learned, the more he had to do," noted A. Catherine Overbeck, a company employee who maintained a journal on the firm's early years.

With Mackubin, Goodrich and Legg, the company's foundation was in place. It wasn't long before the strength of that foundation was tested.

Sunday, Feb. 7, 1904, was cold and blustery in Baltimore, and the streets were quiet. The silence was shattered at 10: 48 a.m. by a clanging alarm at the John E. Hurst & Co. dry goods business on German Street. As the building was swallowed in flames, an explosion blew off the roof and showered flaming debris onto the tops of neighboring buildings.

The fire spread quickly, people and wagons clogged the streets, and proprietors raced to retrieve valuables from the burning buildings. Mackubin and Goodrich managed to secure the company's books and safely stow them at the nearby Safe Deposit and Trust Co.

That evening, Legg helped August Weber, president of German Bank, carry sacks of money to Weber's home on St. Paul Street. "There we guarded it with loaded shotguns in a third-floor bedroom though the perilous night," Legg recalled in a 1948 interview.

Seventy city blocks were destroyed, and 1,500 buildings burned. Companies scrambled to find new offices, and Legg's dentist offered Mackubin, Goodrich a second-story office with two rooms at 318 N. Charles St. They moved in and were back in business as the city smoldered.

Despite the devastation, the fire was nothing compared with what lay ahead for Mackubin, Goodrich & Co.

In August 1914, World War I began in Europe. Markets around the world collapsed, and the New York Stock Exchange closed on July 31 to halt a free-fall in U.S. stocks.

"Things looked very dark indeed, and one had no idea when business could be resumed," Overbeck wrote in her journal.

Dow climbs again

To get by, Mackubin, Goodrich brokered mortgages for homebuilder Roland Park Co. But when the stock market reopened 120 days later, on Dec. 11, the Dow began a steady climb. It advanced about 50 points and closed over 100 near the end of 1916. The company prospered and added clients and employees.

Mackubin, Goodrich capitalized on the market's turnaround and bought a seat on the New York Stock Exchange. Then they moved to plush offices at 111 E. Redwood St. to house the company's 32 employees.

When World War I ended in late 1918, the U.S. economy was limping. Prices for food and clothing soared, unemployment lines grew and strikes erupted.

Roaring Twenties arrive

But the country's mood changed from fear to uncontrolled optimism in the 1920s. Americans bought mass-produced radios, millions drove automobiles, and jobs were plentiful. In Baltimore, Coca-Cola built a bottling plant, and Proctor & Gamble Ivory and Lever Brothers Gold Dust Twins opened soap factories.

The times were intoxicating for the partners of Mackubin, Goodrich & Co. as the company prospered. Each partners had a distinct role.

Goodrich, heavyset and even-tempered, generally worked in the office or on the floor of the Baltimore Exchange. He was a shrewd investor, sometimes willing to take risks. He sold short more than his conservative partners. "The only thing he ever said to me was, 'Boy, watch General Motors,' " recalled Standish McCleary, who was 17 when he joined the firm 71 years ago.

Legg, who was tall and fit, ran the day-to-day operations and could be strict and aloof. His grandson, William Legg, a managing director at Deutsche Banc Alex. Brown, remembers him as a "very dominant presence. He sort of made things happen."

Mackubin was a gregarious man of medium build. He was assertive, but in a kindly way, recalled Frank Krantz, a former neighbor. He also had a streak of machismo. When checking one of his investments, Houston Oil, Mackubin roughed it by camping on the Texas oil fields with the workers for "firsthand information."

Mackubin, Goodrich was booming, and the principals decided they needed bigger quarters. They bought a six-story, white Georgian marble building at South and Redwood streets for $750,000 in April 1929, planning to move into it in 1930 after improvements.

As the company expanded, one of the young men it hired in its bond room, was T. Rowe Price, who later started a mutual fund company in Baltimore bearing his name.

"The firm grew by leaps and bounds," Overbeck wrote in her journal.

As the company prospered, so did its partners.

John Legg took a 10-week European tour with his wife and daughter. Eight months later, he bought an $85,000 three-story stone mansion on University Parkway with 20 rooms and seven baths. He hired Isaac -- known simply as the "yardman" -- to tend the grounds.

Stocks crash in '29

The stock market roared, nearly quadrupling in value from 1920 to Sept. 3, 1929, when the Dow reached 381 points. An orgy of speculation attracted corporate executives to shoeshine boys. Investors borrowed millions of dollars to finance their stock purchases.

Optimism flowed like cold champagne on New Year's Eve.

But a long, bitter hangover was right around the corner.

The first rumbles were felt on Thursday, Oct. 24, 1929. Volume on the New York Stock Exchange exploded amid a wave of early-morning panic selling, and "a roar arose from the Stock Exchange floor that could be heard for blocks along Broad and Wall streets," according to a wire service article in The Sun. Several traders collapsed in the furor, and rumors spread that investors had committed suicide and that the the Big Board was closing early.

'Black Thursday'

The frenzy quieted by 12: 30 p.m., and the day was dubbed "Black Thursday." It was only a warm-up for the crash.

The crash hit Monday, Oct. 28, and was swift and ruthless. The Dow plunged 12.82 percent in an avalanche of selling. The next day was just as bad, as huge blocks of stocks were dumped and volume leaped to a record 16.4 million shares. Stocks opened and plunged, crushing the Dow, which fell 30 points on Tuesday, to 230.07, a staggering 12 percent of the market's value.

The scene was chaotic in brokerage houses. Lawyers, businessmen, and doctors jammed into Mackubin, Goodrich to watch frenzied board boys mark the quickly changing stock prices. The packed room was deathly silent as investors watched their wealth vanish.

Westinghouse plunged $45 a share, Radio Corp. of America fell $26, General Electric sank $28, and United States Steel lost $12.

When the selling stopped, the market had lost nearly $25 billion in three days of trading, and some lost everything.

"They were in a state of shock. The mood was despair," recalled McCleary. "The immediate affect was devastating."

The Crash of 1929 was a prelude to the largest financial catastrophe in U.S. history, and Mackubin, Goodrich couldn't escape the devastation.

The country plunged into depression. About 26,000 businesses failed in 1930, and 28,000 the next year. Canning, shoe and cement factories, along with banks, shut down around the Baltimore region.

Unemployment lines snaked along with bread lines, and by January 1931, 42,000 workers in Baltimore, one in eight, had lost their jobs. By Christmas 1931, 8,000 families in Baltimore were on relief, 18,000 a year later, and a year after that, 23,000 families -- one in six, according to Olson.

"People went out in the morning in search of work, and then, having failed again, lined up outside the police station on Fayette Street and Fallsway for bread, soup or coffee," Robert J. Brugger wrote in the book "Maryland, a Middle Temperament."

At the depth of the Great Depression, Mackubin, Goodrich lost one of its founders. On March 14, 1932, G. Clem Goodrich died at 74. The firm changed its name to Mackubin, Legg & Co.

Despite the hopeless economy, the firm and its 100 employees moved, as planned, into the 222 E. Redwood St. building they had bought nine months earlier. It came amid great fanfare as thousands of people visited. "It was a gala occasion," Overbeck noted in her journal.

But the firm had been rocked by the crash and the Depression. The partners, desperate to save the company, called a meeting in early 1930 and agreed to liquidate their personal stock portfolios to shore up the firm.

"That was what really saved the firm, that cash capital," McCleary said.

War ends Depression

It took a world war to pull the nation and Mackubin, Legg out of the Depression. War meant business, and Baltimore surged with the rest of the country.

The Glenn L. Martin Co.'s Middle River airplane manufacturing plant starting buzzing 24 hours a day, employing 30,000 by 1941. Bethlehem Steel Corp.'s Sparrows Point plant swelled with 23,000 workers at the end of 1939, with 23 ships being built or on order. As men left to fight, Mackubin, Legg staffed the company with women, older workers and teen-agers.

Calvin Rahm was 17 when he joined the firm as a mail boy. One of his jobs was to carry heavy metal boxes stuffed with stock and bond certificates to the bank for safekeeping. Once, Mackubin, pushing 70, accompanied him.

As they crossed the street, Rahm accidentally became separated from Mackubin by walking on the other side of a wooden pole. Mackubin grabbed the teen-ager's shirt collar. "Son, don't you ever do that again," he barked. "I can't protect you if you are separated from me." Then Mackubin patted his coat pocket, where he kept a pistol.

George Mackubin was a free spirit, even in his later years. Better known as "Mr. Mac," he wore a rumpled green suit and flirted with the women in the office. He owned a yacht, drove about town in a chauffeured Cadillac, and gave generously to St. John's Episcopal Church in Ellicott City.

Word on the street was that Mackubin helped people from the church invest their money. If they lost, he would dig into his own pocket and make them whole. To him, the client came first.

Although he retired as a partner in 1942, he maintained an office at the firm until 1949, when an argument with John Legg over an investment prompted him to resign. He joined competitor Robert Garrett & Sons in Baltimore when he was 76. On Jan. 1, 1949, the firm celebrated its 50th year and moved ahead without its founder and with a new name: John C. Legg & Co.

Legg was well known in Baltimore. He headed the Community Chest Campaign in 1940 and 1946, was governor of the Investment Bankers Association, served on numerous boards, and was tapped by the Federal Reserve to devise a plan to raise money for the war.

He was refined and polished, more so than the crusty Mackubin. And he was aloof, opinionated and tough. Colleagues referred to him as "Mr. Legg," and only a handful of people -- friends with whom he played bridge -- dared call him John.

Formality reigns

"I never heard any of the other partners in the meeting address him as anything but Mr. Legg," recalled Joseph Ward Sener Jr., a former vice chairman of Legg's board in 1976. "He was Mr. Legg."

Shortly after Sener joined the firm as a trainee, he was walking into the office on 22 Light St. as Legg was coming out.

"Young man, where is your hat?" Legg asked.

"I beg your pardon?" Sener replied.

"You don't have a hat on. Let me tell you, a gentleman would just as soon be seen on the street without his trousers as he would without a hat."

That day Sener purchased a fedora. "It probably cost me a month's pay," he said.

The partners had become wealthy, as had their clients. That isn't to say life was always easy. Over a five-year period, John Legg suffered through a series of tragedies: His wife, May, died in August 1947. His 41-year-old son, John C. Legg III, a World War II hero who won the Distinguished Flying Cross, died of phlebitis, and his second son, William Mercer Legg, was killed in a hunting accident at the age of 33.

'Nerves of steel'

Legg never displayed his grief in the office. "He had nerves of steel," McCleary said.

"He certainly never showed it at any of the partnership meetings," Sener said. "It had to tear him up."

During most of the 1950s and 1960s the economy was humming. World War II veterans were raising families and buying cars, homes, refrigerators and television sets. The Dow raced past 600 at the end of 1959, and John C. Legg & Co. flourished. It was a great time to be a broker, and an even better time to get into the business.

Raymond A. Mason, a fresh-faced graduate of the College of William & Mary, became a broker as the market took off. Mason, better known as "Chip," went to work at his uncle's brokerage house, Mason & Lee Inc., in Lynchburg, Va. He worked out of the Richmond, Va., office, and had clients in Hampton Roads.

In 1961, a real estate developer, a shipping executive, a banker and several others asked the 25-year-old Mason to start a brokerage firm. They wanted to invest in a new firm and agreed to put up the money if he would run it.

Mason thought about the offer, then leaped. "The great thing about being young is, you don't see the downside," he said. "All you see is the upside."

He made a flurry of calls to fraternity brothers, including James W. Brinkley, who had gotten out of the Army and embarked on a career as a salesman at a cement company. The two had lunch together, and Brinkley signed on.

On May 20, 1962, Mason & Co. opened in downtown Newport News, Va. The mission was simple: survival.

The fight was uphill from the start. The market swooned as President John F. Kennedy badgered big steelmakers to cut prices and again during the Cuban missile crisis. In one six-month stretch, the Dow plummeted 26 percent.

Stocks soared in the mid-1960s, however, as the Vietnam War intensified. Then the market slumped again in 1969.

Seeking a partner

It was then that executives of John C. Legg & Co. decided to look for a merger partner.

The firm was run by Joseph W. Sener Sr., a 53-year veteran of the company, and William F. Gliss Jr. Sener succeeded Legg, who had died in April 1963, at 81. Mackubin died a year later, at age 91, having amassed a $5.8 million fortune.

The firm, which had changed its name to Legg & Co. after Legg's death, wanted a partner in order to expand, and its officers were growing old. They approached Mason & Co.

Gliss and Sener met with Chip Mason in Washington, and the meeting went well. They decided to meet again and "take it further." As they saw it, each could benefit: Legg & Co. would supply the capital, and Mason & Co., the youth and brokerage network.

The firms merged in August 1970, with Gliss the chairman and Mason the president. "It looked like the perfect marriage," said Brinkley, president of the company's brokerage subsidiary.

But the executives of Legg Mason & Co. quickly decided they needed to get bigger. In October, 1973, the firm acquired Wood Walker & Co., a New York-based brokerage firm that managed money for wealthy families. The decision turned out to be a mistake. Legg inherited a far costlier lease than it initially thought, and Wood Walker's capital was $2.1 million, less than half of what it was thought to be.

As Legg struggled to digest Wood Walker, the stock market soured. By Dec. 6, 1974, the Dow plunged to 577.60 points, down 45 percent in 24 months. Brokerage firms suffered, Legg Mason among them.

Kenneth S. Battye, a broker and large shareholder, and McCleary, threatened to pull more than $1 million they had lent the firm if there weren't changes. "They were losing money and they didn't know what to do about it," Battye said.

Battye and McCleary met with Chip Mason, and wanted him to run the company.

Mason takes over

Gliss resigned shortly after, and Mason took over as chairman and chief executive. He cut everything from newspaper subscriptions to staff. "He commanded respect," said Charles A. Bacigalupo, a senior vice president at the company. "We are all very talented but none of us had the foresight he had."

"We believed in him," Battye added. "It made the difference between life and death."

As the firm stabilized, Legg went public in 1983, raising about $14 million. The firm would never have to worry about capital again.

"We had gone through the tough part," Mason said.

On the sun drenched 35th floor in the Legg Mason tower, Chip Mason wrestles not with the company's history but its future.

It may seem strange for a company that continues to have record growth and profitability. In the last five years alone, revenue has nearly tripled to $1 billion. Profit has soared from $16.6 million to $89.3 million. And its stock has nearly quadrupled from $8.86 on March 31, 1995, to the $35 range.

But Mason knows that is no guarantee of things to come. He struggles with how to maintain the company's history of customer service, expanding the firm and retaining its independence.

Mason hopes to expand the money management side by distributing the firm's mutual funds globally and managing more 401(k) money for overseas companies.

"Legg has been one of the most aggressive firms in embracing asset accumulation," said Henry McVey, an analyst at Morgan Stanley Dean Witter. "If we do enter a market downturn, I think they are well positioned."

But the next half dozen years aren't likely to be easy ones. The brokerage industry is going through revolutionary change. Brokerage houses, which live off of charging clients commissions for processing trades, are being forced to offer customers online trading.

Mason isn't thrilled with it, but it is a service the company will offer this fall. He also believes that the company will have to build its own bank or acquire one, to offer checking and savings accounts and certificates of deposit.

"Maybe we have to go into the commercial loan business before it is all over," he said.

It is unclear whether the mega-mergers that have created Citigroup, Morgan Stanley Dean Witter and BankAmerica Corp. will affect Legg, but Mason is concerned.

"There is no proof that bigger is better. On the other hand, when you look at these you can't just sit there and say, 'I am not worried about it. I am not going to pay any attention,' " he said.

If the company can make it through the next four to five years without having to sell out, it can operate independently for the next 20 years, Mason said.

"I think we get through it. I think we are still here three, four years from now," Mason said. "I still feel as though there are going to be very few firms standing in four or five years and those that are, are going to be immensely valuable."

A question of independence

Others agree that the firm can remain independent, despite the heated competition and the trend toward bigness.

"If Legg Mason choses to remain independent, it can," said Amy S. Butte, an analyst at Bear Stearns & Co. "On the other hand it really is the crown jewel, or property of choice for other larger companies that might want to make Legg Mason part of its franchise."

But Mason knows that to thrive, the tradition of treating clients fairly and managing their money conservatively must continue. At meetings, he pounds home the "customer comes first" mantra.

"The only reason you exist is to help the customer make money, and never forget that," he tells brokers and managers. "That is what you are here to do. If you ever lost sight of that, you have lost sight of what your purpose is."

At 62, Mason is entering the twilight of his career. He is friendly, quick to smile and has built a name for himself in a business filled with large egos.

"I view Chip Mason as one of the supreme visionaries in an industry that is constantly changing," analyst Flanagan said. "Chip is one of the most respected [executives] in this industry."

Mason plans to work five more years and is looking for a successor. "I really prefer not to go outside," he said.

Mason is amazed at Legg's growth. The assets the company manages, which are nearing $100 billion, brings a broad smile to his face. "It boggles my mind," he said.

Frank Krantz doubts George Mackubin would be surprised.

"He probably would not be amazed," said Krantz, Mackubin's former neighbor. "He probably would reason that this was the logical order. This was the proper result of doing things right."

100 years of Legg Mason

January 1899: George Mackubin starts George Mackubin & Co. in the Baltimore Stock Exchange at 110 E. German St.

January 1900 : Mackubin names G. Clem Goodrich partner. Firm becomes Mackubin, Goodrich & Co.

February 1904 : Baltimore fire. Seventy city blocks, including the business district, are destroyed.

1905 : John C. Legg Jr. becomes a partner.

July 1914 : World War I begins. New York Stock Exchange closes until Dec.11.

October 1929 : Stock market crashes. The Great Depression begins.

March 1932 : G. Clem Goodrich dies. Firm's name is changed to Mackubin, Legg & Co.

March 1933 : Franklin D. Roosevelt declares bank holiday.

September 1939 : World War II begins in Europe.

August 1945 : Japan surrenders. World War II ends.

January 1949 : Mackubin joins competitor Robert Garrett & Sons.

January 1949: Mackubin, Legg & Co. changes name to John C. Legg & Co.

June 1950: Korean War begins.

May 1962: Raymond A. "Chip" Mason starts Mason & Co. in Newport News, Va.

April 1963 : John C. Legg Jr. dies.

March 1964: George Mackubin dies.

August 1970 : Mason & Co. merges with Legg & Co. to become Legg Mason & Co.

October 1973: Legg Mason acquires New York-based Wood Walker & Co.

August 1974: Nixon resigns

December 1974: Dow closes at 616.24 after plunging 27.57 percent for the year.

April 1982: Legg Mason Value Trust opens.

August 1983: Legg Mason goes public, raising $14 million in its offering.

October 1987: Stock market crashes.

February 1988: Legg moves into 111 S. Calvert St. tower.

March 1996: Legg Mason reports $533 million in revenue.

May 1997: Legg moves to 100 Light Street tower.

February 1999: Raymond A. "Chip" Mason rings the bell on the New York Stock Exchange.

March 1999: Value Trust reaches $10 billion in assets under management.

March 1999: Legg Mason reports $1 billion in revenue.