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New York Post
6 Jan 2024


NextImg:The ‘Money Kings’ of NY banking

It was front-page news in 1912 when Jacob Schiff, the German-born American Jewish banker and philanthropist, donated $100,000 (the equivalent of more than $ 3 million today) to promote German cultural studies at Cornell University.

News reports noted that an air of mystery surrounded the “gratifying surprise,” since, as Cornell’s president noted, the gift was not solicited and Schiff had no previous connection to the university. 

The reason behind the Cornell donation is one of many important backstories revealed by Daniel Schulman in “The Money Kings: The Epic Story of the Jewish Immigrants Who Transformed Wall Street and Shaped Modern America” (Knopf).

As Schulman details, Schiff had been trying for years to persuade Columbia University to relax its policy of excluding Jews from the board of trustees; eventually, he decided to make a statement against Columbia’s antisemitism by giving his money to Cornell instead.

Donations to academic institutions carry certain risks, however. Twenty-five years after receiving Schiff’s gift to the Cornell German studies department, the department’s longtime chair, Prof. A.B. Faust, accepted an honorary degree from the Nazi-controlled University of Goettingen and gave the Hitler salute to the rector at the ceremony. Schiff did not live to witness that outrage.

The book begins with the story of Jacob Schiff, the German-Jewish mogul who donated a vast sum to Cornell University (above) to promote Germanic cultural studies. Getty Images

The phenomenon of universities disappointing their Jewish donors is just one of the many old controversies with contemporary echoes that find their way into Schulman’s colorful chronicle of the German-born Jewish bankers, entrepreneurs, and philanthropists of yesteryear.

Today’s battles over immigration, antisemitism, and even US-Russia relations are also amply represented in the era under Schulman’s scrutiny. 

The story is anchored in an expanding young country’s urgent need for inexpensive labor, and the dream of people around the world for a better life. Thus America opened its doors wide to immigration in the 19th century.

Some two million Irish immigrants arrived between 1820 and 1860, as did 1.5 million Germans. Among the latter were more than 100,000 Jews, whose exodus was fueled not only by the political and economic turmoil then roiling Europe but also by antisemitic discrimination that added an extra layer of hardship to their lives back home.

Goldman Sachs is one of the many notable NY-based banking companies begun by German-Jewish immigrants. Reuters

Typically, as Schulman describes, the first of the German Jews to arrive was a young single man. After getting settled, he would be joined by siblings — hence the proliferation of “& Bros.” in the names of fledgling American businesses.

Despite the absence of social welfare cushions, most of the newcomers were able to achieve a modicum of success through hard work and sheer persistence. A minority made it all the way from rags to riches. Their experiences are at the center of “The Money Kings.”

Take Bavarian-born Joseph Seligman, later one of the nation’s leading investment bankers. He began his life in America as a peddler, wandering from town to town with his wares on his back. So did Marcus Goldman, who also hailed from Bavaria and later founded Goldman Sachs.

Other notables chronicled by Schulman include Henry Lehman, of Lehman Brothers; and Abraham Kuhn, of Kuhn Loeb. Kuhn’s partner, Solomon Loeb, got his start in the Cincinnati textile business. Loeb’s future son-in-law, Schiff, began as an entry-level clerk in a banking firm when he arrived in the United States in 1855. A decade later, he was able to launch his own brokerage firm.

Founded by Henry Lehman, Lehman Brothers is another of the financial titans established by German-Jewish immigrants mentioned in the book. REUTERS

The German Jewish immigrants tended to be distant from Jewish religious observance. Some had already jettisoned the old rituals while growing up in Germany, the birthplace of Reform Judaism. That practice continued and accelerated in the United States as they climbed the socioeconomic ladder.

Interestingly, Seligman served as president of Temple Emanu-El, New York City’s most prominent Reform synagogue, but then later was president of the Society for Ethical Culture, to which some Reform Jews shifted as they assimilated more deeply into American society. 

Settlement houses on the Lower East Side in New York, where immigrant Jews often lived just after arrival. Heritage Images/Getty Images

For some of Schulman’s “money kings,” philanthropy became a kind of substitute Judaism. Donations to Jewish causes allowed them to express concern for their less fortunate brethren while establishing positions of leadership in the Jewish community.

Their financial stewardship of major cultural institutions such as the Metropolitan Museum of Art, the American Museum of Natural History, the Metropolitan Opera, and the New York Philharmonic cemented their status in the upper crust of American society.

As Schulman notes, in one particularly grandiose display of altruism, Schiff celebrated his 70th birthday by distributing $700,000 ($16.8 million in today’s dollars) to various charities.

Much of the German Jewish donors’ largesse simply addressed crying needs. For example, when some hospitals discriminated against Jews, they built hospitals that didn’t. Some of those institutions are still operating today, under their distinctive Jewish names, although they long ago outlived their original purpose.

In other cases, the donations served a dual aim. “Settlement houses” on Manhattan’s Lower East Side provided crucially needed social services to the large numbers of Jewish immigrants from Russia who began arriving in the late 1800s. It was “one of the most important philanthropic partnerships of Schiff’s lifetime,” Schulman notes.

It also served the purpose of Americanizing newcomers whom the old-timers considered embarrassingly foreign in their manners and appearance. 

Marcus Goldman Wikipedia

Perhaps the most ambitious of these Americanization initiatives was the Galveston movement. Anxious to “prevent the settlement of further large numbers [of Russian Jews] in New York,” Schulman writes, Schiff poured $500,000 ($16 million today) into this effort to redirect Russian Jewish immigrants through the port of Galveston, Texas.

From there they were settled in various remote locations in the southwest, where — so the thinking went — they would be less noticed and thus less likely to arouse antisemitism. The program was a flop. Over the seven years it lasted, from 1907 to 1914, only about 10,000 Jews went through Galveston.

Most of the immigrants preferred major urban centers, especially New York City, where they could find the kind of people, institutions, and cultural trappings with which they were familiar.

The Metropolitan Opera and New York Philharmonic are among the major New York cultural institutions begun by German-Jewish immigrant bankers. Robert Miller

Schulman does not have to work hard to demonstrate how the “money kings” impacted the world around them. The list of examples is long. Seligman and his sons financed significant expansion of America’s early railroads and other industries.

Jacob Schiff and Otto Kahn also played important roles in railroad development, as well as the rise of other major companies such as Western Union and Westinghouse Electric.

Schiff financed Japan’s victory over Russia’s antisemitic czar in their war of 1904-05 (for which he is regarded as a hero in Japan to this day) and later helped convince Congress to abrogate a Russo-American treaty to protest the mistreatment of Russian Jews.

Paul Warburg was a founder of the Federal Reserve Board. These individuals, along with fellow “money kings” at firms such as Lehman Brothers and Goldman Sachs, helped shape Wall Street in its formative years and beyond.

Some of these men — Schiff and his son-in-law Felix Warburg in particular — also founded or financed numerous major American Jewish institutions. They established the American Jewish Committee, to defend Jewish rights in the political and diplomatic arenas.

To provide relief to downtrodden Jews overseas, they created the American Jewish Joint Distribution Committee. They also contributed significantly to the development of the Jewish community in British-ruled Palestine, even though, like many Jews of their station, they worried that–as Schiff put it–Zionism created a “separateness” that could undermine their status as Americans.

The B’nai Israel Synagogue in Galveston is home to one of the most vibrant Jewish communities in The South. Alamy Stock Photo

Thus “The Money Kings” is not merely an engaging account of the lifestyles of the rich and famous–although that part of the story is unavoidable — but, more importantly, a history of how a handful of industrious immigrants were able to have such an outsized impact on both America and American Jewry.

Rafael Medoff is founding director of The David S. Wyman Institute for Holocaust Studies.