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Jacob Henry Schiff

Jacob Henry Schiff

Jacob Henry Schiff (1847-1920) was the outstanding member of the American-German banking group that became important after the Civil War. He played a major role in railroads and in industrial mergers at the turn of the century.

Jacob Schiff was born in Frankfurt am Main, Germany, on Jan. 10, 1847, of a middle-class family and a long line of rabbis and bankers. At the age of fourteen he was apprenticed to a business firm. In 1865 he emigrated to New York and soon set up his own brokerage office. In 1872 Schiff went to Germany to go into banking.

When Schiff returned to New York in 1875, he was invited to join the private banking firm of Kuhn, Loeb and Company. He soon became a leading member of the house and in 1885 its senior partner. Interested in railroad financing, Schiff found his big chance when he and E. H. Harriman (America's greatest railroad man) took over the Union Pacific Railroad in 1897.

Schiff and Harriman set out to acquire the Northern Pacific Railroad from J. P. Morgan and James J. Hill by stock-exchange maneuvers. The result was a financial panic in 1901. The titans settled on a holding company, the Northern Securities Company, which owned the stock of the Northern Pacific, the Great Northern, and the Burlington railroads, with the Schiff-Harriman interests fully recognized. Thanks to Schiff and J. P. Morgan, this was the golden age of American railroading; and Schiff was recognized as Morgan's peer.

Also between 1895 and 1910 Schiff's firm headed banking syndicates (using European money markets for funds and as outlets for the new securities) that formed several important American industrial mergers. From 1897 to 1906 Kuhn, Loeb and Company cooperated with other firms to market over $800 million in securities; during 1907-1912 it alone underwrote $530 million worth, and with other houses an additional $821 million. Schiff was imaginative enough to see that an American capital market had developed, and he floated dollar bonds to finance Mexican railroads and to raise money for Japan's war against Russia. Unlike Morgan, Schiff was not interested in voting trusts or in sitting on the boards of the companies he organized or reorganized, and he did not seek to become their depositories. His company did not control a group of banks or dominate credit agencies; to this extent, therefore, he did not earn the censure of the Pujo Committee's Money Trust Investigation of 1913.

As a devout Jew, Schiff became a spokesman for those Jews who believed in assimilation into American culture. He helped establish Jewish philanthropic agencies— hospitals, family-and child-care societies, recreation and settlement house centers—to help less fortunate coreligionists adjust to American life. Schiff also helped put the Jewish Theological Seminary on a sound footing, created the Semitic Museum at Harvard, and financed the departments of Semitic literature at the New York Public Library and the Library of Congress. He died in New York on Sept. 25, 1920.

Further Reading

Although Jacob H. Schiff: His Life and Letters, edited by Cyrus Adler (2 vols., 1928), is useful, more exciting and informative about Schiff's business life is Stephen Birmingham, Our Crowd (1967). Fritz Redlich, The Molding of American Banking (1968), is very good on Schiff and is the best discussion of investment banking extant. □

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Schiff, Jacob Henry

Jacob Henry Schiff, 1847–1920, American banker and philanthropist, b. Frankfurt, Germany. He emigrated to the United States in 1865 and became a partner in a brokerage house in New York City. At the age of 38 he was head of the banking house of Kuhn, Loeb and Company. Schiff became associated with E. H. Harriman in notable contests with the house of Morgan for control of Western railroads. His numerous philanthropies included the endowment of the Jewish Theological Seminary, the Montefiore Home, both in New York, and a museum at Harvard.

See biographies by C. Adler (1928) and N. W. Cohen (1999).

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Schiff, Jacob Henry

SCHIFF, JACOB HENRY

SCHIFF, JACOB HENRY (1847–1920), U.S. financier and philanthropist. Born in Frankfurt, Germany, he was the descendant of a distinguished rabbinical family (see *Schiff, Meir b. Jacob). He received a thorough secular and religious education at the local school of the Israelitische Religionsgesellschaft, then followed his father, Moses, who was associated with the Rothschild banking firm, into that occupation. At the age of 18 Schiff immigrated to the United States, entered a brokerage firm in New York, and became a partner in Budge, Schiff and Co. In 1875 he married the daughter of Solomon Loeb, head of the banking firm of Kuhn, Loeb and Co., and entered that firm. Schiff's remarkable financial abilities were recognized when he was named head of Kuhn, Loeb in 1885.

Schiff's firm soon became one of the two most powerful private investment banking houses in the United States, participating actively in fostering the rapid industrialization of the U.S. economy during the late 19th and early 20th century. Such firms as Westinghouse Electric, U.S. Rubber, Armour, and American Telephone and Telegraph were financed to some extent through Kuhn, Loeb's efforts. In addition, Schiff served as director or adviser of numerous banks, insurance companies, and other enterprises. His role in the consolidation and expansion of the American railroad network, the backbone of an industrialized society, was particularly influential. He gave his support to Edward H. Harriman in the reorganization of the Union Pacific Railroad and was a staunch associate of James J. Hill of the Great Northern Railway for many years. Huge sums were obtained by Kuhn, Loeb for the Pennsylvania, Baltimore and Ohio, and other railroad systems.

Schiff was prominently involved in floating loans to the government at home and to foreign nations, the most spectacular being a bond issue of $200,000,000 for Japan at the time of the Russo-Japanese War in 1904–05. Deeply angered by the antisemitic policies of the czarist regime in Russia, he was delighted to support the Japanese war effort. He consistently refused to participate in loans on behalf of Russia and used his influence to prevent other firms from underwriting Russian loans, while providing financial support for Russian Jewish *self-defense groups. Schiff carried this policy into World War i, relenting only after the fall of czarism in 1917. At that time, he undertook to support the Kerensky government with a substantial loan.

It was said of Schiff that "nothing Jewish was alien to his heart." Personally devout, proud of his family and religious heritage, Schiff used his immense personal wealth and influence on behalf of his coreligionists everywhere. His widespread philanthropic activities and communal interests brought him recognition as the foremost figure of his time in American Jewry. Although affiliated with Temple Emanu-El and the Reform movement in the United States, Schiff retained many of the Orthodox habits of his youth. He was especially active in the establishment and development of the Jewish Theological Seminary, viewing it as the fountainhead for a "reasonable Orthodoxy" attractive to the masses of newly arrived immigrants. Other institutions of Jewish learning, including Yeshivath Rabbi Isaac Elchanan (later Yeshiva College and University), as well as Hebrew Union College, received generous support from Schiff. Realizing the need for trained religious teachers, he provided funds for the establishment of Teachers' Institutes at the Jewish Theological Seminary and Hebrew Union College. When the New York Kehillah was organized, Schiff made substantial contributions to its Bureau of Jewish Education and supported the Uptown Talmud Torah in New York and similar schools.

Schiff had a deep interest in Jewish literature and contributed generously to the Jewish Publication Society. He provided funds for a new English translation of the Bible by Jewish scholars and established a fund for the translation and publication of a series of Hebrew classics. His donations aided the publication of the Jewish Encyclopedia; the acquisition by the Library of Congress and the Jewish Theological Seminary Library of major collections of rare books and manuscripts; and the establishment of the Jewish Division of the New York Public Library. His philanthropies were accompanied in many cases by intense personal participation. For example, not only was he a major contributor to the Montefiore Hospital in New York, of which he was president for 35 years, but he managed to visit there almost weekly. There were few Jewish institutions in New York or elsewhere. which did not benefit from Schiff's attention and funds. Such agencies as the Hebrew Free Loan Society, Educational Alliance, Home for Aged and Infirm Hebrews, ymha, United Hebrew Charities, Jewish Protectory and Aid Society, and Hebrew Technical School, were among those receiving his aid. He was a large-scale contributor to the relief of victims of Russian pogroms (1903–05), to the American Jewish Relief Committee during World War i, and to postwar European Jewish relief. Schiff, who had access to American presidents, used his influence with them in urging U.S. support on behalf of Jews victimized in Eastern Europe. In 1906 he joined with other Jewish leaders in the formation of the American Jewish Committee and subsequently took a very active part in its efforts to protect the rights of Jews abroad and in the United States. Offended by Russia's refusal to honor passports held by American Jews, Schiff was prominent in the successful campaign to abrogate the Russo-American Treaty of 1832. During World War i, Schiff and the established American Jewish leadership came under increasing fire from newer, Zionist-oriented Jewish groups. He had strongly opposed the Zionist movement, rejecting it as a secular, nationalistic perversion of the Jewish faith, incompatible with American citizenship. On the other hand, he did aid agricultural projects and the Haifa Technical Institute in Palestine. Recognizing changing world conditions, Schiff announced in 1917 his support of a cultural homeland in Palestine for the Jewish people.

Proud of his Americanism, Schiff contributed generously in time and money to a multitude of civic activities and philanthropies. He donated $1,000,000 to Barnard College; contributed funds to establish the Semitic Museum at Harvard University as well as large sums to other universities; and supported the Henry Street Settlement, the American Red Cross, Tuskegee Institute, and countless others. He served on the New York City Board of Education, was vice president of the Chamber of Commerce, and participated in several special mayoral commissions. Although linked by family and cultural ties to Germany, Schiff patriotically supported the American war effort when the United States entered World War i.

bibliography:

P. Arnsberg, Jakob H. Schiff (Ger., 1969), incl. bibl.; C. Adler, Jacob H. Schiff: His Life and Letters, 2 vols. (1928); dab, 16 (1935), 430–2; H. Simonhoff, Saga of American Jewry (1959), 346–54; N.W. Cohen, in: jsos, 25 (1963), 3–41; Z. Szajkowski, ibid., 29 (1967), 3–26; 75–91; T. Levitan, Jews in American Life (1969), 152–5. add. bibliography: N. Cohen, Jacob H. Schiff: A Study in American Jewish Leadership (1999).

[Morton Rosenstock]

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