The next day, a very nervous Lufkin distributed the IPO documents to the assembled governors. They asked the requisite questions about what could possibly have possessed Lufkin and his partners to make such a rash decision. He explained how DLJ needed a permanent source of capital to grow, to make acquisitions, to redeem the stock of partners looking to leave the business, and to be able to attract new partners. It all made sense, but it was absolute heresy.

The leaders of the NYSE, while appalled by DLJ’s gambit, had little choice but to follow the NYSE’s bylaws for amending its constitution. They knew, deep down, that in order to continue financing the growth of the country’s great businesses, Wall Street needed more capital. The easiest and cheapest way for Wall Street to get the capital it needed was from the public, just as Wall Street’s corporate clients had been doing for more than a century. Soon after DLJ filed its IPO prospectus with the SEC, Lufkin proposed amendments to the NYSE’s constitution that would allow member firms to go public, as, of course, nearly any other corporation could do, with Wall Street’s help. DLJ was simply trying to do for itself what Wall Street had been doing for other American businesses for nearly two centuries: helping them to raise the capital they needed to grow their businesses from the people who had capital they wanted to invest. And for many of the same reasons: DLJ needed the capital, which was more plentiful and cheaper than private capital, to grow its business, to hire more people, and to consider getting into new business lines.

On April 10, 1970, nearly a year after first filing its IPO prospectus with the SEC, DLJ pulled it off, raising $12 million from the public and as a result fundamentally altering how Wall Street has functioned ever since. “Going public changed Wall Street permanently and forever,” Richard Jenrette (the J in DLJ) told the Times. “If Wall Street had remained in a private mode, it would have acted like a club and been so vastly undercapitalized that someone would have taken it over long ago. There would have been no alternative but to have let the [commercial] banks take over”—something that the Glass-Steagall law, of course, had made illegal. The truth was going public made perfect sense for DLJ and the many Wall Street firms—nearly every one—that followed its lead.

The problem is that the country is still dealing with the unintended consequences of the DLJ IPO to this day. And, of course, back in 1970, very few people, if any, were paying attention to what a small private partnership on Wall Street was trying to do to change the system. And honestly, the importance of the DLJ IPO has still not been fully appreciated. But it was a seminal event.

Whereas for more than 150 years Wall Street firms had relied on the prudent use of their partners’ capital to take risks—which nonetheless occasionally went awry—and to run their businesses, knowing full well that a single mistake could spell the end for their firms, as well as threaten whatever fortunes they had personally built up over the years, the move by DLJ was destined to change the whole calculus of Wall Street. If DLJ were successful, if the public’s capital could be substituted for partners’ capital, if the public’s legal liability for mistakes could be substituted for the partners’ legal liability for mistakes, there would be no telling what the consequences would be both for Wall Street and for everybody who relied on Wall Street to raise capital, to provide liquidity in the buying and selling of stocks and bonds, and to help individuals manage and grow their wealth. Although it was unlikely the founders of DLJ could have anticipated all of what its IPO would unleash over the next nearly 50 years, they must have had some inkling that by substituting a bonus culture—where bankers, traders, and executives demanded to be paid for the revenue they generated in their various product lines—for the long-standing partnership culture—where the individual partners of the firm collaborated to make sure only prudent risks were taken in order to ensure there would be annual pretax profits for them to divide—Wall Street would never be the same.