Jacob Henry Schiff was an Jewish-American banker, businessman, and philanthropist. Among many other things, he helped finance the expansion of American railroads and the Japanese military efforts against Tsarist Russia in the Russo-Japanese War.
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Jacob Henry Schiff (born Jakob Heinrich Schiff; January 10, 1847 – September 25, 1920) was a Jewish-American banker, businessman, and philanthropist. Among many other things, he helped finance the expansion of American railroads and the Japanese military efforts against Tsarist Russia in the Russo-Japanese War.
Born in Frankfurt, Germany, Schiff migrated to the United States after the American Civil War and joined the firm Kuhn, Loeb & Co. 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 a 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. His father, Moses Schiff, was a broker for the Rothschilds. 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 American 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 (fr) 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, Mortimer L. Schiff and a daughter, Frieda.
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.
What was perhaps Schiff's most famous financial action was during the Russo-Japanese War, in 1904 and 1905. Schiff met Takahashi Korekiyo, deputy governor of the Bank of Japan, in Paris in April 1904. He subsequently extended loans to the Empire of Japan in the amount of $200 million (equivalent to $33.1 billion in 2016), through Kuhn, Loeb & Co. These loans were the first major flotation of Japanese bonds on Wall Street, and provided approximately half the funds needed for Japan's war effort. Schiff made this loan partly because he believed that gold was not as important as national effort and desire in winning 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 answering, on behalf of the Jewish people, the anti-Semitic actions of the Russian Empire, specifically the then-recent Kishinev pogrom.
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 of the Japanese leadership saw this as evidence of the power of Jews all around the world, raised the issue of Jewish loyalties in the Diaspora and as proof of the truth of the Protocols of the Elders of Zion. In 1905, Japan awarded Schiff the Order of the Sacred Treasure; and in 1907, the Order of the Rising Sun, Gold and Silver Star, the second highest of the eight classes of that Order. Schiff was the first foreigner to receive the Order in person from Emperor Meiji in the Imperial Palace. Schiff also had a private audience with King Edward VII of the United Kingdom in 1904.
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. During World War I, Schiff urged U.S. President Woodrow Wilson and other Allied statesmen to end 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 arranged 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 the Russian Empire, which he felt oppressed Jewish people. When the Russian Empire 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 was also involved with many secular American causes: in addition to serving on the Board of Managers of the New York Zoological Society, he gave to such organizations 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.
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.
A practitioner of Reform Judaism, 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.
Historian George F. 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 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."
Schiff died in New York City on September 25, 1920. His estate was estimated at about $50,000,000 ($620,000,000 in 2015). 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).
Schiff was inducted into the Junior Achievement U.S. Business Hall of Fame in 1982.
The Jacob Schiff Center, named after him, 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.
New York City public school number 192 in West Harlem is also named for him. It serves grades pre-K through 5.
Schiff's descendant Andrew Newman Schiff was married to former Vice President Al Gore′s daughter, Karenna.