Jacob Schiff | |
|---|---|
 Portrait byAimé Dupont, 1903 | |
| Senior Partner,Kuhn, Loeb & Co. | |
| In office 1885 – September 25, 1920 | |
| Succeeded by | Mortimer Leo Schiff |
| Personal details | |
| Born | Jakob Heinrich Schiff (1847-01-10)January 10, 1847 Frankfurt, German Confederation |
| Died | September 25, 1920(1920-09-25) (aged 73) New York City, U.S. |
| Citizenship | German (1847–1870) American (1870–1920) |
| Spouse | |
| Children | Frieda Schiff (1876–1958) Mortimer L. Schiff (1877–1931) |
| Occupation | Banker and businessman |
Jacob Henry Schiff (bornJakob Heinrich Schiff; January 10, 1847 – September 25, 1920) was a German-born Americanbanker, businessman, and philanthropist. He helped finance the expansion of American railroads and the Japanese military efforts againstTsarist Russia in theRusso-Japanese War.
Born inFrankfurt, Germany, Schiff migrated to the United States after theAmerican Civil War and joined the firmKuhn, Loeb & Co.[1] From his base onWall Street, he was the foremost Jewish leader from 1880 to 1920 in what later became known as the "Schiff era", grappling with all major Jewish issues and problems of the day, including theplight of Russian Jews, American and internationalantisemitism, care of needy Jewish immigrants, and the rise ofZionism.[2][3] He also became a director of many important corporations, including theNational City Bank of New York,Equitable Life Assurance Society,Wells Fargo & Company, and theUnion Pacific Railroad. In many of his interests he was associated withE. H. Harriman.
Schiff was born in 1847 in theJudengasse inFrankfurt am Main, Germany, to Moses and Clara (née Niederhofheim) Schiff, members of a distinguishedAshkenazi Jewishrabbinical family that traced its lineage in Frankfurt back to 1370. One ancestor,David Tevele Schiff, became lead rabbi in Great Britain and from 1765 until his death was acting head of theLondon Synagogue. Meir Ben Jacob Schiff, another relative, had become renowned as a Talmudic scholar and commentator in the 14th century. Jacob's father, Moses Schiff, was a broker for theRothschilds.[1] Schiff was educated in the schools of Frankfurt, and was first employed in the banking and brokerage business as an apprentice in 1861.[4][5]
After theAmerican Civil War had ended in April 1865, Schiff came to the United States, arriving in New York City on August 6. He became a broker on November 21, 1866, and joined the firm of Budge, Schiff & Company in 1867. He became anaturalizedcitizen of the United States in September 1870.[5]However, Schiff's modern biographer Cohen, says this happened a year later.
Upon the dissolution of Budge, Schiff & Company in 1872, Schiff decided to return to Germany. In 1873, he became manager of theHamburg branch of the London & Hanseatic Bank. He returned to Frankfurt, however, upon the death of his father later that year. In 1874,Abraham Kuhn of the banking firm ofKuhn, Loeb & Company invited him to return to New York City and enter the firm.[5] Not long after joining the firm of Kuhn, Loeb & Co., Schiff was in essence running the business.
Along withH. B. Claflin,Marcellus Hartley,Robert L. Cutting, andJoseph Seligman, he was a founder of theContinental Bank of New York in August 1870.[6]
Schiff accepted Kuhn's invitation in January 1875, bringing to Kuhn, Loeb & Company his connections with SirErnest Cassel of London,Robert Fleming ofDundee (later of London), andEdouard Noetzlin [fr] of theBanque de Paris et des Pays-Bas (Bank of Paris and the Netherlands or Paribas).[5] On May 6, 1875, he married Therese Loeb, daughter ofSolomon Loeb. The couple were the parents of a son,Mortimer L. Schiff and a daughter,Frieda.[4][5][7]
In 1885, Schiff became head of Kuhn, Loeb & Company. Besides financing Eastern railroads such as thePennsylvania and theLouisville & Nashville, he took part in the reorganization of theBaltimore and Ohio Railroad in 1896–99, and at various times aided the American Smelting & Refining Company (ASARCO), theWestinghouse Electric Company, and theWestern Union Telegraph Company. Less fortunate was his share in the reorganization in 1902 of theMetropolitan Street Railway of New York.[5]
He became associated withE. H. Harriman in notable contests withJames J. Hill andJ.P. Morgan & Company for control of several Western railroads. Schiff served as a director of theEquitable Life Assurance Society,National City Bank of New York,Central Trust Company,Western Union Telegraph Company,Union Pacific Railroad, and Bond & Mortgage Guarantee Company. He was elected a director ofWells Fargo & Company in September 1914 to succeed his brother-in-law,Paul Warburg, who had resigned to accept appointment to the originalFederal Reserve Board.[4][5][8][9]
What is perhaps Schiff's most famous financial action took place during theRusso-Japanese War (1904–1905). Schiff met withTakahashi Korekiyo, deputy governor of theBank of Japan, in Paris in April 1904. Schiff agreed to extend loans to theEmpire of Japan in the amount of $200 million (equivalent to $5.4 billion in 2024[10]), through Kuhn, Loeb & Co.[5] These loans were the first major flotation of Japanese bonds onWall Street, and provided approximately half the funds needed for Japan's war effort.[11] Schiff made this loan in part because he believed gold was not as important as national effort and desire to win a war and due to the apparent underdog status of Japan at the time: a European empire had not yet been defeated by a non-Western nation, in a modern, full-scale war. It is quite likely Schiff also saw this loan as a means of answering, on behalf of the Jewish people for the antisemitic actions of theRussian Empire, specifically the recentKishinev pogrom in 1903.
This loan attracted worldwide attention, and had major consequences. Since their domestic economy was still developing, Japan's military was dependent on massive imports of munitions, purchases made possible by Schiff's loan. In 1905, Japan awarded Schiff theOrder of the Sacred Treasure,[12] and in 1907, theOrder of the Rising Sun, Gold and Silver Star, the second highest of the eight classes of that Order.[13] Schiff was the first foreigner to receive the Order in person fromEmperor Meiji in the Imperial Palace.[14] Schiff also had a private audience with KingEdward VII of the United Kingdom in 1904.
In addition to his famous loan to Japan, Schiff financed loans to many other nations[example needed], including those that would come to comprise theCentral Powers[citation needed]. During World War I, Schiff urged U.S. PresidentWoodrow Wilson and otherAllied statesmen to end the war as quickly as possible, even without an Allied victory[citation needed]. He feared for the lives of his family, back in Germany, but also for the future of his adopted land. He arranged loans to France and other nations for humanitarian purposes,[citation needed] and spoke out againstsubmarine warfare.[citation needed]
Schiff forbade any of the funds from his loans from going to the Russian Empire, due to the Tsarist regime's oppression of the Jewish people. Whenthe Tsar was overthrown in 1917, Schiff believed that the oppression of Russia's Jews would end and formally repealed the impediments within his firm against lending to Russia.
However, Schiff's stance changed again upon theBolsheviks' seizure of power:
"Schiff's gripe against Russia had been its anti-Semitism. At home Schiff had never shown any sympathy for socialism, not even the milderMorris Hillquit variety. Schiff had declared victory for his purposes in Russia after the tsar was toppled in March 1917 andAlexander Kerensky, representing the new provisional government, had declared Jews to be equal citizens. In addition to repeated public statements of support, he used both his personal wealth and the resources of Kuhn Loeb to float large loans to Kerensky's regime. WhenLenin andTrotsky seized power for themselves in November 1917, Schiff immediately rejected them, cut off further loans, started funding anti-Bolshevist groups, and even demanded that the Bolsheviks pay back some of the money he'd loaned Kerensky. Schiff also joined a British-backed effort to appeal to fellow Jews in Russia to continue the fight against Germany."[15]
Schiff believed in the Jewish charitable principle ofZedakah. Beginning in childhood he recalled "Kindness was the keynote of the household... It was made our duty to put one-tenth aside for charity according to the old Jewish tradition."[16]
Schiff always felt strongly about his connection to theJewish people, and demonstrated this through his philanthropy. He founded theJewish Industrial Removal Office which relocated New York immigrant Jews to the Western United States. He also founded an additional point of immigrant entry to the U.S. throughGalveston, Texas.[17] He supported relief efforts for the victims of pogroms in Russia, and helped establish and developHebrew Union College, theJewish Theological Seminary, the Jewish Division in theNew York Public Library, and theAmerican Jewish Committee.
Schiff grew to be one of American Jewry's top philanthropists and leaders, donating to nearly every major Jewish cause, New York examples being theMontefiore Home for Chronic Invalids, of which he was president,[18] theYoung Men's Hebrew Association building and theJewish Theological Seminary.[19]
He was also involved with many secular American causes: in addition to serving on the Board of Managers of theNew York Zoological Society, he gave to such organizations as theBoy Scouts of America, theHarvard Semitic Museum, theAmerican Museum of Natural History,Metropolitan Museum of Art,American Fine Arts Society,American Geographical Society, andBarnard College; and a number of other organizations for civil rights and the disadvantaged, such as theAmerican Red Cross, theVisiting Nurse Service of New York andHenry Street Settlement (New York) andTuskegee Institute.[4][5][19]
Schiff was actively concerned with the improvement of civic conditions in New York City. He was a vice president of theNew York Chamber of Commerce, and a member of theCommittee of 70 which resulted in the overthrow of theTweed Ring.[20]
On his 70th birthday, he distributed $700,000 among various charitable organizations and public institutions[21]
Schiff believed in theTalmudic principle that "twice blessed is he who gives in secret." He did not permit his name to be attached to the buildings he sponsored, with the one exception of the Schiff Pavilion at hisMontefiore Hospital, and never discussed the size of his gifts. Because of his secrecy, the exact amount of his philanthropic donations is impossible to calculate, but it has been estimated between $50 and $100 million dollars.[16]
TheAction Française movement and its leader,Charles Maurras, claimed that Schiff was thoroughly pro-German and had worked to preventAmerican entry into World War I. Maurras went so far as to suggest that a telegram from Schiff and other prominent American Jewish leaders convinced President Wilson to give in to certain German arguments at the post-war peace negotiations, including allowingUpper Silesia to have a plebiscite rather than being ceded to Poland.[22] The telegram is not known to have actually existed. Moreover, it has been argued that Schiff stopped financing transactions for Germany or the Central Powers as of 1914, stopped speaking German in public and was eager to demonstrate his moral and financial commitment to the Allied cause.[23]
A practitioner ofReform Judaism,[24] Schiff supported political, secularZionism. Despite not agreeing fully with the ideas ofTheodor Herzl, and in fact believing that Zionism would cause Americans to question his loyalty, he donated to many Jewish projects in Israel, including theTechnical Institute of Haifa. As the situation for Eastern European Jews grew more dire, with theRussian Revolution and subsequentRussian Civil War, and pogroms in Ukraine, Schiff made more considerable contributions to the Zionist effort; he even offered to join the Zionist organization, provided he could publish a statement he'd prepared. This offer was denied, and so he never formally joined the Zionist camp.
JournalistGeorge Kennan noted that Schiff helped finance revolutionary propaganda during the Russo-Japanese War and Revolution of 1905,[25] through theSociety of Friends of Russian Freedom.The Jewish Communal Register of New York City stated that, "Mr. Schiff has always used his wealth and his influence in the best interests of his people. He financed the enemies of autocratic Russia and used his financial influence to keep Russia from the money markets of the United States."[26]
Schiff died at hisFifth Avenue home inManhattan, New York City on September 25, 1920.[27] His funeral was held three days later atTemple Emanu-El, then located at 43rd Street and Fifth Avenue in Manhattan.[28]
His estate was estimated at about $50,000,000 (approximately $785,000,000 today). He bequeathed $1,350,000 to various institutions, most of which had received benefactions during his life. The largest bequests were $500,000 to the Federation for the support of Jewish Philanthropic Societies of New York City and $300,000 to the Montefiore Home.[21][29]
He was succeeded as head of Kuhn, Loeb & Company by his son,Mortimer Leo Schiff.[5]
Schiff was inducted into theJunior Achievement U.S. Business Hall of Fame in 1982.[30]
The Jacob Schiff Center, named after him, was a prominent Jewish cultural center andsynagogue from the 1930s through at least the 1960s. It was located on Valentine Avenue, near the intersection ofFordham Road and theGrand Concourse in theFordham section ofThe Bronx.[31]
New York City public school number 192 inWest Harlem is also named for him. It serves grades pre-K through 5th grade.[32]
In Germany, there was an attempt to name a street Jacob-Schiff-Straße inFrankfurt in response to the numerous charitable donations he had made to the city. When theNazi Party took power in 1933, the street's name was changed to Mummstraße after Daniel Heinrich Mumm von Schwarzenstein, the city's former mayor, as part ofaryanization.[33][34]
David T. Schiff's son Andrew Neman Schiff was married previously to formerVice PresidentAl Gore's daughter,Karenna. Together they had three children, before divorcing in 2010.
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