Jacob Henry Schiff, born Jakob Heinrich Schiff (January 10, 1847 – September 25, 1920) was a German-born Jewish American banker and philanthropist, who helped finance, among many other things, the Japanese military efforts against Tsarist Russia in the Russo-Japanese War.
From his base on Wall 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 the plight of Russian Jews under the Tsar, American and international anti-semitism, care of needy Jewish immigrants, and the rise of Zionism. 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. In many of his interests he was associated with E.H. Harriman.
Schiff was born in 1847 in Frankfurt am Main, Germany, 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 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 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 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 of London, Robert Fleming of Dundee (later of London), and Edouard Noetzlin of the Banque de Paris et des Pays Bas. 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 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), the Westinghouse Electric Company, and the Western Union 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 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, Western Union Telegraph Company, Union Pacific Railroad, 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, who had resigned to accept appointment to the original Federal Reserve Board.
During the Russo-Japanese War, 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, 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 pogroms 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; in 1907 he was honored with the Japanese Order of the Rising Sun, Gold and Silver Star, 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 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. When World War I finally did break out, he used his reputation and influence to urge President Woodrow Wilson, 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.
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 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.
Schiff always felt strongly about his connection to the Jewish people, 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, the Jewish Theological Seminary, the Jewish Division in the New York Public Library, and the American 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 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, the Harvard Semitic Museum, the American Museum of Natural History, Metropolitan Museum of Art, American Fine Arts Society, American Geographical Society, and Barnard College; and a number of other organizations for civil rights and the disadvantaged, such as the American Red Cross, 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.
Schiff was also invited to a private audience in 1904 with King Edward VII of the United Kingdom.
The Action Française movement and its leader, Charles Maurras, 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 to have a plebiscite rather than being ceded to Poland. 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. 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, 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.
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).
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 and the Grand Concourse in the Fordham 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 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."
Schiff's descendant Andrew Newman Schiff is married to former Vice President Al Gore's daughter, Karenna.
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