Jacob Schiff

Jacob Schiff

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Jacob Henry Schiff, born Jakob Heinrich Schiff (January 10, 1847 – September 25, 1920) was a German-born Jewish American banker
Investment banking
An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities...

 and philanthropist, who helped finance, among many other things, the Japanese military efforts against Tsarist Russia
Russian Empire
The Russian Empire was a state that existed from 1721 until the Russian Revolution of 1917. It was the successor to the Tsardom of Russia and the predecessor of the Soviet Union...

 in the Russo-Japanese War
Russo-Japanese War
The Russo-Japanese War was "the first great war of the 20th century." It grew out of rival imperial ambitions of the Russian Empire and Japanese Empire over Manchuria and Korea...

.

From his base on Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...

, 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 the plight of Russian Jews under the Tsar, American and international anti-semitism
Anti-Semitism
Antisemitism is suspicion of, hatred toward, or discrimination against Jews for reasons connected to their Jewish heritage. According to a 2005 U.S...

, care of needy Jewish immigrants, and the rise of Zionism
Streams of Zionism
The Zionist Movement was produced by various philosophers representing different approaches concerning the objective and path that Zionism should follow. The principal common goal was the aspiration to establish an independent state for the Jewish people. However, the method of action needed was...

. He also became the director of many important corporations, including the National City Bank of New York, Equitable Life Assurance Society, Wells Fargo & Company, and the Union Pacific Railroad
Union Pacific Railroad
The Union Pacific Railroad , headquartered in Omaha, Nebraska, is the largest railroad network in the United States. James R. Young is president, CEO and Chairman....

. In many of his interests he was associated with E.H. Harriman.

Early life


Schiff was born in 1847 in Frankfurt am Main, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...

, to Moses and Clara (née Niederhofheim) Schiff, members of a distinguished Ashkenazi Jewish rabbinical family that traced its lineage in Frankfurt back to 1370. Schiff was educated in the schools of Frankfurt and was first employed in the banking and brokerage business as an apprentice in 1861. After the U.S. Civil War had ended in April, 1865, Schiff came to the United States, arriving in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...

 on August 6. He was licensed as a broker on November 21, 1866, and joined the firm of Budge, Schiff & Company in 1867. He became a naturalized citizen of the United States in September 1870.

Upon the dissolution of Budge, Schiff & Company in 1872, Schiff decided to return to Germany. In 1873 he became manager of the Hamburg
Hamburg
-History:The first historic name for the city was, according to Claudius Ptolemy's reports, Treva.But the city takes its modern name, Hamburg, from the first permanent building on the site, a castle whose construction was ordered by the Emperor Charlemagne in AD 808...

 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 of Kuhn, Loeb & Company
Kuhn, Loeb & Co.
Kuhn, Loeb & Co. was a bulge bracket, investment bank founded in 1867 by Abraham Kuhn and Solomon Loeb. Under the leadership of Jacob H. Schiff, it grew to be one of the most influential investment banks in the late 19th and early 20th centuries, financing America's expanding railways and growth...

 invited him to return to New York and enter the firm.

Kuhn, Loeb & Company


Schiff accepted Kuhn's invitation in January 1875, bringing to Kuhn, Loeb & Company his connections with Sir Ernest Cassel
Ernest Cassel
Sir Ernest Joseph Cassel, GCB, GCMG, GCVO, PC was a German-born British merchant banker and capitalist.-Biography:...

 of London, Robert Fleming of Dundee (later of London), and Edouard Noetzlin of the Banque de Paris et des Pays Bas
BNP Paribas
BNP Paribas S.A. is a global banking group, headquartered in Paris, with its second global headquarters in London. In October 2010 BNP Paribas was ranked by Bloomberg and Forbes as the largest bank and largest company in the world by assets with over $3.1 trillion. It was formed through the merger...

. On May 6, 1875, he married Therese Loeb, daughter of Solomon Loeb. The couple were the parents of a son and a daughter.

In 1885 Schiff became head of Kuhn, Loeb & Company. Besides financing such Eastern railroads as the Pennsylvania
Pennsylvania Railroad
The Pennsylvania Railroad was an American Class I railroad, founded in 1846. Commonly referred to as the "Pennsy", the PRR was headquartered in Philadelphia, Pennsylvania....

 and the Louisville & Nashville, he took part in the reorganization of the Baltimore & Ohio Railroad in 1896-99, and at various times aided the American Smelting & Refining Company (ASARCO
ASARCO
ASARCO LLC is a mining, smelting, and refining company based in Tucson, Arizona that mines and processes primarily copper. The company, a subsidiary of Grupo México, is currently in Chapter 11 bankruptcy...

), the Westinghouse Electric Company
Westinghouse Electric Company
Westinghouse Electric Company LLC is a nuclear power company, offering a wide range of nuclear products and services to utilities throughout the world, including nuclear fuel, service and maintenance, instrumentation and control and advanced nuclear plant designs...

, and the Western Union
Western Union
The Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is in Englewood, Colorado. Up until 2006, Western Union was the best-known U.S...

 Telegraph Company. Less fortunate was his share in the reorganization in 1902 of the Metropolitan Street Railway of New York.

He became associated with E.H. Harriman in notable contests with James J. Hill
James J. Hill
James Jerome Hill , was a Canadian-American railroad executive. He was the chief executive officer of a family of lines headed by the Great Northern Railway, which served a substantial area of the Upper Midwest, the northern Great Plains, and Pacific Northwest...

 and J.P. Morgan & Company for control of several Western railroads. Schiff served as a director of the Equitable Life Assurance Society, National City Bank of New York, Central Trust Company
Central Trust Company
Central Trust Company, is located in Camden, New Jersey. The building was built in 1899 and was added to the National Register of Historic Places on January 5, 2005....

, Western Union Telegraph Company, Union Pacific Railroad
Union Pacific Railroad
The Union Pacific Railroad , headquartered in Omaha, Nebraska, is the largest railroad network in the United States. James R. Young is president, CEO and Chairman....

, Bond & Mortgage Guarantee Company, and Wells Fargo & Company. He was elected a director of Wells Fargo in September 1914 to succeed his brother-in-law, Paul Warburg
Paul Warburg
Paul Moritz Warburg was a German-born American banker and early advocate of the U.S. Federal Reserve system.- Early life :...

, who had resigned to accept appointment to the original Federal Reserve Board.

National loans


During the Russo-Japanese War
Russo-Japanese War
The Russo-Japanese War was "the first great war of the 20th century." It grew out of rival imperial ambitions of the Russian Empire and Japanese Empire over Manchuria and Korea...

, in 1904 and 1905, in perhaps his most famous financial action, Schiff, again through Kuhn, Loeb & Co., extended a critical series of loans to the Empire of Japan
Empire of Japan
The Empire of Japan is the name of the state of Japan that existed from the Meiji Restoration on 3 January 1868 to the enactment of the post-World War II Constitution of...

, in the amount of $200 million. He was willing to extend this loan due, in part, to his belief that gold is not as important as national effort and desire, in helping win a war, and due to the apparent underdog status of Japan at the time; no European nation had yet been defeated by a non-European nation in a modern, full-scale war. It is quite likely Schiff also saw this loan as a means of avenging, on behalf of the Jewish people, the anti-Semitic actions of the Tsarist regime, specifically the then-recent pogrom
Pogrom
A pogrom is a form of violent riot, a mob attack directed against a minority group, and characterized by killings and destruction of their homes and properties, businesses, and religious centres...

s in Kishinev.

This loan attracted worldwide attention, and had major consequences. Japan won the war, thanks in large part to the purchase of munitions made possible by Schiff's loan. Some within the Japanese leadership took this as evidence of the power of Jews all around the world, of their loyalty to one another, and as proof of the truth of the Protocols of the Elders of Zion, the antisemitic Tsarist forgery. In 1905, Schiff was awarded the Japanese Order of the Sacred Treasure
Order of the Sacred Treasure
The is a Japanese Order, established on January 4, 1888 by Emperor Meiji of Japan as the Order of Meiji. It is awarded in eight classes . It is generally awarded for long and/or meritorious service and considered to be the lowest of the Japanese orders of merit...

; in 1907 he was honored with the Japanese Order of the Rising Sun, Gold and Silver Star
Order of the Rising Sun
The is a Japanese order, established in 1875 by Emperor Meiji of Japan. The Order was the first national decoration awarded by the Japanese Government, created on April 10, 1875 by decree of the Council of State. The badge features rays of sunlight from the rising sun...

, which represents the second highest of eight classes associated with the award. Schiff was the first foreigner to have been personally awarded the Order by Emperor Meiji
Emperor Meiji
The or was the 122nd emperor of Japan according to the traditional order of succession, reigning from 3 February 1867 until his death...

 in the Imperial Palace.

In addition to his famous loan to Japan, Schiff financed loans to many other nations, including those that would come to comprise the Central Powers
Central Powers
The Central Powers were one of the two warring factions in World War I , composed of the German Empire, the Austro-Hungarian Empire, the Ottoman Empire, and the Kingdom of Bulgaria...

. When World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...

 finally did break out, he used his reputation and influence to urge President Woodrow Wilson
Woodrow Wilson
Thomas Woodrow Wilson was the 28th President of the United States, from 1913 to 1921. A leader of the Progressive Movement, he served as President of Princeton University from 1902 to 1910, and then as the Governor of New Jersey from 1911 to 1913...

, and others, to put an end to the war as quickly as possible, even without an Allied victory. He feared for the lives of his family, back in Germany, but also for the future of his adopted land. He engineered loans to France, and other nations for humanitarian purposes, and spoke out against submarine warfare
Submarine warfare
Naval warfare is divided into three operational areas: surface warfare, air warfare and underwater warfare. The latter may be subdivided into submarine warfare and anti-submarine warfare as well as mine warfare and mine countermeasures...

.

Schiff made sure none of the funds from his loans ever went to Russia, which continued to severely oppress the Jewish people. When the Tsar's
Nicholas II of Russia
Nicholas II was the last Emperor of Russia, Grand Prince of Finland, and titular King of Poland. His official short title was Nicholas II, Emperor and Autocrat of All the Russias and he is known as Saint Nicholas the Passion-Bearer by the Russian Orthodox Church.Nicholas II ruled from 1894 until...

 government fell in 1917, Schiff believed that the oppression of Jews would end. He formally repealed the impediments within his firm against lending to Russia.

Charitable endeavors


Schiff always felt strongly about his connection to the Jewish people
Jews
The Jews , also known as the Jewish people, are a nation and ethnoreligious group originating in the Israelites or Hebrews of the Ancient Near East. The Jewish ethnicity, nationality, and religion are strongly interrelated, as Judaism is the traditional faith of the Jewish nation...

, and demonstrated this through his philanthropy. He supported relief efforts for the victims of pogroms in Russia, and helped establish and develop Hebrew Union College
Hebrew Union College
The Hebrew Union College-Jewish Institute of Religion is the oldest extant Jewish seminary in the Americas and the main seminary for training rabbis, cantors, educators and communal workers in Reform Judaism.HUC-JIR has campuses in Cincinnati, New York, Los Angeles and Jerusalem.The Jerusalem...

, the Jewish Theological Seminary
Jewish Theological Seminary of America
The Jewish Theological Seminary of America is one of the academic and spiritual centers of Conservative Judaism, and a major center for academic scholarship in Jewish studies.JTS operates five schools: Albert A...

, the Jewish Division in the New York Public Library
New York Public Library
The New York Public Library is the largest public library in North America and is one of the United States' most significant research libraries...

, and the American Jewish Committee
American Jewish Committee
The American Jewish Committee was "founded in 1906 with the aim of rallying all sections of American Jewry to defend the rights of Jews all over the world...

.

Schiff grew to be one of American Jewry's top philanthropists and leaders, donating to nearly every major Jewish cause, New York examples being the Montefiore Home for Chronic Invalids, of which he was president, the Young Men's Hebrew Association building and the Jewish Theological Seminary. He also gave to many secular American causes such as the Boy Scouts of America
Boy Scouts of America
The Boy Scouts of America is one of the largest youth organizations in the United States, with over 4.5 million youth members in its age-related divisions...

, the Harvard Semitic Museum, the American Museum of Natural History
American Museum of Natural History
The American Museum of Natural History , located on the Upper West Side of Manhattan in New York City, United States, is one of the largest and most celebrated museums in the world...

, Metropolitan Museum of Art
Metropolitan Museum of Art
The Metropolitan Museum of Art is a renowned art museum in New York City. Its permanent collection contains more than two million works, divided into nineteen curatorial departments. The main building, located on the eastern edge of Central Park along Manhattan's Museum Mile, is one of the...

, American Fine Arts Society
American Fine Arts Society
The American Fine Arts Society is located in New York, New York. The building was built in 1891 and was added to the National Register of Historic Places on May 6, 1980. The American Fine Arts Society was founded by Howard Russell Butler.-See also:...

, and the American Geographical Society
American Geographical Society
The American Geographical Society is an organization of professional geographers, founded in 1851 in New York City. Most fellows of the society are Americans, but among them have always been a significant number of fellows from around the world...

; and a number of other organizations for civil rights and the disadvantaged, such as the American Red Cross
American Red Cross
The American Red Cross , also known as the American National Red Cross, is a volunteer-led, humanitarian organization that provides emergency assistance, disaster relief and education inside the United States. It is the designated U.S...

, the Nurses' Settlement (New York) and Tuskegee Institute.
On his 70th birthday, he distributed $700,000 among various charitable organizations and public institutions.
Schiff was actively concerned with the improvement of civic conditions in New York. He was a vice president of the New York Chamber of Commerce, and a member of the Committee of 70 which resulted in the overthrow of the Tweed Ring.

Last years


Schiff was also invited to a private audience in 1904 with King Edward VII
Edward VII of the United Kingdom
Edward VII was King of the United Kingdom and the British Dominions and Emperor of India from 22 January 1901 until his death in 1910...

 of the United Kingdom.

The Action Française
Action Française
The Action Française , founded in 1898, is a French Monarchist counter-revolutionary movement and periodical founded by Maurice Pujo and Henri Vaugeois and whose principal ideologist was Charles Maurras...

 movement and its leader, Charles Maurras
Charles Maurras
Charles-Marie-Photius Maurras was a French author, poet, and critic. He was a leader and principal thinker of Action Française, a political movement that was monarchist, anti-parliamentarist, and counter-revolutionary. Maurras' ideas greatly influenced National Catholicism and "nationalisme...

, claimed that Schiff was thoroughly pro-German and had worked to prevent American 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 allowing Upper Silesia
Upper Silesia
Upper Silesia is the southeastern part of the historical and geographical region of Silesia. Since the 9th century, Upper Silesia has been part of Greater Moravia, the Duchy of Bohemia, the Piast Kingdom of Poland, again of the Lands of the Bohemian Crown and the Holy Roman Empire, as well as of...

 to have a plebiscite rather than being ceded to Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...

. 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.

As an observant Jew, Schiff supported political, secular Zionism
Zionism
Zionism is a Jewish political movement that, in its broadest sense, has supported the self-determination of the Jewish people in a sovereign Jewish national homeland. Since the establishment of the State of Israel, the Zionist movement continues primarily to advocate on behalf of the Jewish state...

. Despite not agreeing fully with the ideas of Theodore Herzl, and in fact believing that Zionism would cause Americans to question his loyalty, he donated to many Jewish projects in Palestine, including the Technical Institute of Haifa. As the situation for Eastern European Jews grew more dire, with the Russian Revolution
Russian Revolution of 1917
The Russian Revolution is the collective term for a series of revolutions in Russia in 1917, which destroyed the Tsarist autocracy and led to the creation of the Soviet Union. The Tsar was deposed and replaced by a provisional government in the first revolution of February 1917...

, and pogroms in Ukraine
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...

, 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.

Schiff died in New York City on September 25, 1920. His estate was estimated at about $50,000,000. 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. He was succeeded as head of Kuhn, Loeb & Company by his son, Mortimer Leo Schiff (1877–1931).

Legacy


Mr. Schiff was inducted into the Junior Achievement U.S. Business Hall of Fame in 1982.

The Jacob Schiff Center was named after him: it was a prominent Jewish cultural center and synagogue from the 1930s through at least the 1960s. It was located on Valentine Avenue, near the intersection of Fordham Road
Fordham Road
Fordham Road is a major street in The Bronx borough of New York City. It runs east-west from the Harlem River to Bronx Park.This street runs through the neighborhood of University Heights, divides Fordham from Fordham-Bedford and finally runs along the northern border of Belmont...

 and the Grand Concourse
Grand Concourse
Grand Concourse can refer to:*Grand Concourse , a boulevard in New York City*Grand Concourse , an integrated walkway in Newfoundland and Labrador*Grand Concourse , owned by Landry's Restaurants...

 in the Fordham
Fordham
Fordham may refer to:In business:*Fordham Brewing Company, a brewing company based in Dover, Delaware*Fordham Company, a real estate development firm based in Chicago, IllinoisIn education:...

 section of the Bronx.

Historian George Kennan noted that Schiff helped finance revolutionary propaganda during the Russo-Japanese war and revolution of 1905. The Jewish Communal Register of New York City noted 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 market of the United States." Henry Wickham Steed, the chief editor of The Times
The Times
The Times is a British daily national newspaper, first published in London in 1785 under the title The Daily Universal Register . The Times and its sister paper The Sunday Times are published by Times Newspapers Limited, a subsidiary since 1981 of News International...

during the period, argued that this aid went beyond the Kerensky regime, stating that "the prime movers [of the Bolshevik revolution] were Jacob Schiff, Warburg, and other international financiers, who wished above all to bolster up the Jewish Bolshevists in order to secure a field for German and Jewish exploitation of Russia." The Hoover Institution scholar, Antony Sutton, who specialized in the role of Western Technological and financial transfers in building up the Soviet State, noted that the role of Schiff's firm of Kuhn, Loeb, & Co. in supporting the bolsheviks continued beyond the revolution, writing that "there is a report in the State Department files that names Kuhn, Loeb & Co. (the long established and important financial house in New York) as the financier of the First Five Year Plan. See U. S. State Dept. Decimal File, 811.51/3711 and 861.50 FIVE YEAR PLAN/236."

Family

  • Wife: Therese (née Loeb)
  • Children: Mortimer Schiff; Frieda Warburg, née Schiff.
  • Father: Moses Schiff
  • Mother: Clara Schiff, née Niederhofheim
  • Granddaughter: Dorothy Schiff
    Dorothy Schiff
    Dorothy Schiff was an owner and then publisher of the New York Post for nearly 40 years. She was a granddaughter of financier Jacob H. Schiff...

  • Grandson: John M. Schiff
    John M. Schiff
    John Mortimer Schiff was an American banker and national president of the Boy Scouts of America from 1951 to 1956.-Biography:...



Schiff's descendant Andrew Newman Schiff is married to former Vice President
Vice President of the United States
The Vice President of the United States is the holder of a public office created by the United States Constitution. The Vice President, together with the President of the United States, is indirectly elected by the people, through the Electoral College, to a four-year term...

 Al Gore
Al Gore
Albert Arnold "Al" Gore, Jr. served as the 45th Vice President of the United States , under President Bill Clinton. He was the Democratic Party's nominee for President in the 2000 U.S. presidential election....

′s daughter, Karenna.

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