Banking and Bankers

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There is little likelihood that financial transactions played a prominent role in the pre-Exilic epoch in Ereẓ Israel; according to the ethos of Jewish society, then founded on a pronounced agrarian structure, lending was part of the assistance a man owed to his neighbor or brother in need (cf. Deut. 23:21). During the Babylonian era Jews had greater opportunities to come into contact with a highly developed banking tradition and to participate in credit operations. After the Exile, commerce and credit certainly had a place in Ereẓ Israel. Though the society remained predominantly agrarian, Jerusalem had a number of wealthy families, including tax agents and landowners, who speculated and deposited their gains in the Temple, which had in some ways the function of a national bank (see *Heliodorus). Organized banking probably arose in connection with Ma'aserot ("tithes"), in particular Ma'aser sheni, and the pilgrimages to Jerusalem, through the activities of the *money changers. The use of Greek terms indicates a strong Hellenistic influence on the establishment of banking. Meanwhile, the Jewish communities forming in the Diaspora, the most important at first being that of *Babylonia, were given an impulse toward a new way of life by the longstanding traditions of a capitalist type of economy existing around them (see Nippur and *Murashu's sons). In Babylonia, Jews engaged in financial transactions: some were farmers of taxes and customs, and the wealthiest of them were landowners; among the latter were *Huna, the head of the academy of Sura, and Rav *Ashi. However, talmudic references show that the standards of an agrarian economy were still dominant and therefore gamblers and usurers were not thought trustworthy witnesses (see e.g., Sanh. 3:3).

Another important Jewish colony was to be found at *Alexandria, center of the trade between the Mediterranean and the Arabian and Indian world, where Jews were engaged not only in commerce and international trade but in moneylending too. According to *Josephus, a Jewish tax agent was able to make a loan of 3,000 talents. The *alabarch Alexander Lysimachus, who loaned King *Agrippa i 200,000 drachmas (Jos., Ant., 18:159–160), was also the steward of Antonia, mother of Emperor Claudius. Another Alexandrian Jew was treasurer to Candace, queen of Ethiopia.

Middle Ages

the caliphate

With the rapid development of city life and commerce in the caliphate of Baghdad from the late eighth century and the transition of the majority of Jews under caliphate rule from agriculture and a village environment to the cities, banking became one of the occupations of some upper-class Jews, especially in Baghdad and later under the Fatimids (from 968) in Egypt. This Jahbadhiyya, as it was called, was a form of banking based on the savings and economic activities of the whole Jewish merchant class and not only on the fortunes of the very rich: the bankers loaned to the state and its officers money deposited with them as well as from their own fortunes. The vast sums at the disposal of these Jewish bankers and their relative immunity from confiscation by the autocratic authorities both tend to confirm that these Jewish "court bankers" from the beginning of the tenth century onward were well-known to their Muslim debtors as a kind of "deposit banker" for Jewish merchants. Under the Fatimid caliph al-Mustanṣir the brothers *Abu Saʿd al-Tustarī and Abu Naṣr Ḥesed b. Sahl al-Tustarī (both died in 1048) were influential in the finances of Egypt. With the rise of *Saladin and the foundation of the Ayyubid dynasty in Egypt (1169), the position of the Jews deteriorated but they were able to continue their moneychanging activities at least. Toward the end of the Mamluk period (1517), Samuel, a moneychanger in Cairo, must have possessed considerable wealth, for the Arab chronicler Ibn Iyās tells that the sultan extorted from him more than 500,000 dinars. During the Muslim rule on the Iberian peninsula, Córdoba Jews were active in the financial administration in the tenth and eleventh centuries. The responsa of this period show a highly developed money economy existing before the First and Second Crusades.

early merchants in europe

Persecution, such as occurred in Alexandria in 414 or the oppressive measures promulgated in the Byzantine Empire beginning with *Constantine and intensified under *Justinian, may have contributed to the fact that from the fifth century Jewish merchants followed their Greek and Syrian counterparts to Gaul and not only traded in luxury goods but also loaned money. With the disappearance of the Syrians and Greeks from Europe in the seventh century, the Jewish merchants were able to expand. Within the administration of the Merovingian kings (from 481) Jews possibly farmed taxes or advanced money on revenues to high officials; according to Gregory of Tours (c. 538–94), the count of Tours and his vicar were indebted to the Jew Armentarius. During the Carolingian period (from the mid-eighth century), Jews settled in the Rhineland again as they had done during the Roman Empire – some of them lending money on pledges or giving money to merchants in a kind of commenda partnership. Archbishop Anno of Cologne (d. 1075), as well as Emperor Henry iv (1056–1106), borrowed money from Jews.

the moneylenders in europe

After the First Crusade (1096) the Jewish merchant, in his necessarily long journeys, no longer enjoyed even minimal physical security. In Western and Central Europe, especially in *Spain, the crystallization of the essentially Christian nature of the rising city communes combined with this insecurity to drive out the Jews from commerce and prohibit them from engaging in crafts. In France, England (up to 1290), Germany, Austria, Bohemia, Moravia, and northern and central Italy, Jews had to turn to loan-banking on a larger or smaller scale in order to make a living. The canonical prohibition against taking interest by Christians, which was stressed in successive *Church councils (especially the Fourth Lateran Council of 1215), and the vast opportunities for capital investment in land and sea trade open to the wealthy Christian made lending on interest for consumer and emergency needs virtually a Jewish monopoly in Western and Central Europe between the 12th and 15th centuries. By the 13th century the notion that the Wucherer ("usurer") was a Jew was already current, for example, in the writings of *Berthold of Regensburg, Walther von der Vogelweide, and Ulrich von Lichtenstein. The word judaizare became identical with "taking interest." Testimony from the 12th century shows that moneylending was then becoming the main occupation of the Jews; this was the case of those of Bacharach (1146) and of Muenzenberg (1188). However, there is little data to suggest that Jewish banking transactions were on a large scale even in the 13th century, but there is evidence that the bishop of Basle had debts with Basle Jews and that various monasteries had Jewish creditors.

The transition from a natural economy to a money economy in the course of the "commercial revolution," and the stabilization of territorial principalities opened new possibilities for Jewish banking activity, especially in the Rhineland and in southern Germany. Jews from Siegburg, Trier, Mainz, Speyer, Strasbourg, and Basle as well as from Ulm and Nuremberg appear as sources of credit. The most important banking transaction in the first half of the 14th century went through the hands of Vivelin the Red, who transmitted 61,000 florins in gold which King Edward iii of England paid to Baldwin of Trier for becoming allied with him against France. Margrave Rudolf iii of Baden was indebted to David the Elder, called Watch, and to Jekelin of Strasbourg and his partners. Muskin and Jacob Daniels served the archbishop of Trier in the administration of his finances; during the first half of the 14th century, Daniels was probably the most important Jewish banker of the Rhineland. He was followed in the service of the archbishop by his son-in-law Michael. At the same time Abraham von Kreuznach at Bingen had a similar position with the archbishop of Mainz. Gottschalk von Recklinghausen and his company was another group on the lower Rhine. Such banking activity is recorded in other parts of Central Europe as far as Silesia.

Moneychanging and coinage privileges were often combined with moneylending, and Jews were frequently the sole agents arranging loans. From the first half of the 12th century moneychanging as a special form of banking is supported by documentary evidence. To spread the risk, partnerships of between two and ten persons were formed. As security, custom at first recognized mainly pledges, but from the middle of the 13th century the letter of credit came into use, though princess till preferred to pledge jewels. Often, instead of a pawn, bail was given by several persons. In western Germany hypothecation of real estate was preferred, and in this way Jews acquired in pledge houses, vineyards, farms, villages, castles, towns, and even seigneuries. Interest rates do not seem to have exceeded 36% but in the case of deferred payment they could rise to 100% or beyond. From the 12th century popes and princes exploited the financial capacity of the Jews by frequent remission of debts or forced loans. The *Black Death and consequent persecutions of Jews gave rulers an opportunity forcibly to seize property and to restore pawns and letters of credit to debtors. The liquidation of Jewish debts by King *Wenceslaus iv of Bohemia around the end of the 14th century is a well-known example of such royal rapacity. With these and other measures and the rise of the merchant class, who gradually took over the function of loan-bankers to the princes and even to emperors during the 15th and early 16th centuries, the Jews were deprived of imperial protection and forced to leave the towns. They retired to the small seigneuries or migrated to Eastern Europe, where a less-developed economy offered them possibilities of making a livelihood. In Bohemia, Hungary, and in Poland and Lithuania both princes and nobility made use of their financial help. As the Eastern European kingdoms developed with the colonization of the forests, Jews played an increasing part in commerce and especially in the *arenda. In the larger towns some engaged in moneylending and banking activities.

In 12th-century France moneylending was an important Jewish business, but in the 13th century Jewish lenders came up against the superior competition of the Lombards, a rivalry even more intense in the Netherlands. In England, where *Aaron of Lincoln and *Aaron of York were powerful bankers, a special *Exchequer of the Jews was set up to centralize Jewish transactions. However in the 13th century the crown began to rely on the greater resources of the Cahorsins and Italian bankers and in 1290 the Jews were expelled. In Italy Jewish bankers could expand their sphere of activity under the silent protection of the popes, despite resistance on the part of the Christian burghers (see *Popes and the Jews). From the second half of the 13th century they spread throughout central Italy and gradually expanded toward the north, migrating at first to the smaller and medium-sized towns. In Pisa and then in Florence the Da *Pisa family became important loan-bankers; in Florence in 1437 Cosimo de' Medici permitted a Jewish group to establish four loan-banks; in Venice in 1366 Jews, probably of German origin, obtained the right to lend on pledges. Here as in other places in northern Italy, Jewish loan-bankers from the south came into competition with Jews migrating from Germany or southern France. Finally only a few towns, such as Milan and Genoa, refused to admit Jewish loan-bankers. However, their activities were seriously challenged when the anti-Jewish preaching of the *Franciscans resulted in the establishment of branches of the *Monti di Pietà toward the middle of the 15th century.

The Iberian Peninsula after the Christian reconquest offers many examples of large-scale credit activities and tax farming by Jews. It is known that they provided money for armaments against the Moors. El Cid borrowed from Raquel and Vidas, Jews of Burgos, for his expedition against Valencia. King Alfonso vi of Castile (1072–1109) also obtained loans from Jews for his military expeditions. His successors employed Jews in the financial administration, especially as almoxarifes (revenue collectors), an activity combined with moneylending. Thus, Judah Ibn Ezra was in the service of Alfonso vii, Joseph Ibn Shoshan of Alfonso viii, and Solomon *Ibn Zadok (Don Çulema) and his son Çag de la Maleha were almoxarifes in the service of Alfonso x, while Meir ibn Shoshan served as his treasurer. When Sancho iv (1258–95) came to the throne, *Abraham el-Barchilon was prominent in the financial administration, supervising the farming of the taxes. Generally, in Castile the Jews abstained from farming the direct taxes, which from 1288 the Cortes opposed. The Jews therefore tended to prefer the administration of the customs and other rights belonging to the office of almoxarife. The court of Aragon relied on Jewish financial administrators in a similar fashion. King James i employed *Benveniste de Porta as a banker, probably giving him as security for his advances the office of bailiff of Barcelona and Gerona. Judah de la *Cavalleria, the most powerful Jew in the Aragonese administration, had control over all the bailiffs of the kingdom. Under Pedro iii the family of *Ravaya were most influential. Though during the 14th century the Jews in Aragon and Navarre were subjected to increasing pressures, Judah Ha-Levi and Abraham Aben-Josef of Estella were general farmers of the rents under Charles ii and Charles iii of Navarre. In Castile – in spite of the Cortes' opposition – Jews such as the *Abrabanel family in Seville continued to be active as almoxarifes. The young Alfonso xi appointed Joseph de *Écija as his almoxarife mayor (c. 1322); Pedro the Cruel (1350–69) made Samuel b. Meir ha-Levi *Abulafia of Toledo, known as the richest Jew of his time, his chief treasurer, and Henry of Trastamara had Joseph *Picho as his financial officer (contador mayor) despite his promise to remove all Jews from royal office (1367).

the conversos

The persecutions of 1391 and the mass conversions which followed brought an important change. Some of the Conversos were able to use the act of baptism to climb to high positions in the financial administration: examples are Luis de la *Cavalleria, chief treasurer under John ii of Aragon, Luis *Sánchez, royal bailiff of the kingdom of Aragon (c. 1490), and his brother Gabriel *Sánchez, who was treasurer-general. Under Henry iv of Castile (1454–74) Diego Arias de Avila was the king's secretary and auditor of the royal accounts; in spite of Diego's unpopularity his son Pedro succeeded him. Even Isabella the Catholic depended on the financial advice of the Jew Abraham *Senior, from 1476 chief tax gatherer in Castile, and Isaac *Abrabanel, who after having been banker of Alfonso v of Portugal served as the queen's private financial agent and loaned her a considerable sum for the war against Granada. The Converso Luis de *Santangel, chancellor and comptroller of the royal household and great-grandson of the Jew Noah Chinillo, loaned Isabella money to finance Columbus' expedition to America. Though some men like Isaac Abrabanel, who went to Naples, remained faithful to Judaism, a number of Jews of Spanish origin stayed in Portugal and, after accepting baptism, rose to financial influence there, especially in combination with the East Indian spice trade. Prominent among them were Francisco and Diogo *Mendes. The latter, who took up residence in Antwerp, became one of the most important merchant bankers there, lending money to the king of Portugal, the emperor, and Henry viii of England. The firm "Herdeiros de Francisco e Diogo Mendes" was administered for some time after Diogo's death (1543) by Francisco's widow, Doña Beatrice de Luna (Gracia *Nasi) and her nephew João Miques (Joseph *Nasi). They subsequently immigrated to Turkey, where the latter combined commercial and banking activity with political influence. Another to rise to high position was Alvaro Mendes from Tavira, Portugal, who in Constantinople took the name Solomon *Abenaes. Jewish money-changers and tax farmers were to be found in many places of the Ottoman Empire. After the union between Spain and Portugal (1580), a number of influential Conversos took the opportunity to invest their capital in financing the various ventures of the crown, provisioning the army in Flanders and in the East Indies, and supplying contracts for Africa. Their activities expanded especially after the financial crisis of 1626 and continued until the Portuguese revolt of 1640 which restored independent sovereignty to the country. After this all members of the gente de nação (as Conversos were called) living in Spain became suspect. The last important financial venture by *New Christians in Portugal was the financing of the Brazil Company established in 1649. However, Jewish involvement in banking proper really begins with the activities of those Conversos who, fleeing the Inquisition in Portugal and Spain, settled in *Antwerp, *Hamburg, and *Amsterdam, some remaining nominally Christian and some openly returning to Judaism. In Antwerp the Ximenes and Rodrigues d'Evora families were outstanding among an important group of merchant bankers who had commercial relations extending as far as the East Indies and Brazil. While they remained Catholics (like the Mendes de Brito group in Portugal), those who emigrated to Hamburg and Amsterdam formed Sephardi communities. In Hamburg they participated in the founding of the bank in 1619; 30 (by 1623, 46) local Jews were among its first shareholders, and some of them were financial agents for various North European courts, especially those of Denmark and Schleswig-Holstein. Most famous in Antwerp were Diego Teixeira de Sampaio (Abraham *Senior), consul and paymaster general for the Spanish government, and his son Manuel (Isaac Ḥayyim Senior), who succeeded him as financial agent of Christina of Sweden. Manuel Teixeira was an outstanding member of the Hamburg exchange and participated actively in the transfer of Western European subsidies to the German or Scandinavian courts.

At Amsterdam at first only a few Jews were shareholders in the bank founded in 1609 and of the East India Company. One hundred and six Portuguese had accounts in 1620. Generally their resources were not sufficiently great to add any special weight to the formative stage of Amsterdam capitalism. Through Holland's developing overseas trade, especially with Brazil (until 1654) and then with the West Indies, as well as through the growth of the Amsterdam capital market and the transfer of subsidies and provisioning of armies through Amsterdam, Jewish financiers rose to importance in the exchange market, and were especially active in trading company shares. Outstanding were the *Pinto family and Antonio (Isaac) Lopez *Suasso (Baron d'Avernas le Gras); nevertheless the wealth of the Sephardi families remained far below that of their Christian counterparts. In the second half of the 18th century the Pinto family remained prominent, and another influential financier of Sephardi origin was David Bueno de *Mesquita.

Partly as a consequence of the marriage between Charles ii of England and Catherine of Braganza (1662), and especially after William and Mary became joint sovereigns of England (1689), London, too, became a center of Sephardi banking, leading figures being Anthony (Moses) da Costa, Solomon de *Medina, and Isaac Pereira. In the reign of Queen Anne (1702–14), Manasseh *Lopes was a leading banker; during the 18th century Samson *Gideon, Francis and Joseph *Salvador, and the *Goldsmid brothers, leading members of the Ashkenazi community, were outstanding. In the middle of the 18th century Jacob Henriques claimed that his father had planned the establishment of the Bank of England (1694).

the holy roman empire

Only a few Jewish financiers, such as Joseph zum goldenen Schwan at Frankfurt or Michel *Jud, were active in the German principalities in the 16th century. In the early 17th century the Hapsburgs employed the services of Jacob *Bassevi of Treuenberg of Prague, Joseph Pincherle of Gorizia, and Moses and Jacob Marburger of Gradisca. The rise of the absolute monarchies in Central Europe brought numbers of Jews, mostly of Ashkenazi origin, into the position of negotiating loans for the various courts, giving rise to the phenomenon of *Court Jews. The most famous and most active of them in financial affairs were, in the second half of the 17th and the beginning of the 18th century, Leffmann *Behrends in Hanover, Behrend *Lehmann in Halberstadt, Bendix Goldschmidt in Hamburg, Aaron Beer in Frankfurt, and Samuel *Oppenheimer and Samson *Wertheimer in Vienna. Later Diego d' *Aguilar, and the *Arnstein and *Eskeles families became prominent. In the early 18th century Joseph Suess *Oppenheimer was the outstanding figure in southern Germany; his financial influence was widespread, especially in Wuerttemberg, until his fall and execution in 1738. Important court bankers around the end of the 18th century were Israel *Jacobson in Brunswick, the *Bleichroeder family in Berlin, Simon Baruch and Solomon Oppenheimer in Bonn, the *Rothschilds in Frankfurt, the Reutlinger, Seligmann, and *Haber families in Karlsruhe, the Kaulla family in Stuttgart, and Aron Elias Seligmann, later baron of Eichthal, in Munich.


In the 15th and beginning of the 16th century the Italian loan-bankers reached their greatest eminence, including the Pisa, *Volterra, Norsa, Del Banco, *Rieti, and Tivoli families. In their wealth and style of life these men belonged to the Renaissance milieu as much as the artists and men of letters. However, with the expansion of the institution of the Monte di Pietà and the restrictive policy of the popes of the Counterreformation, their influence declined. The Da Pisa disappeared from Florence in 1570. However there were still between 60 and 70 loan-bankers operating in Rome toward the end of the 16th century and a century later about 20 were still in existence. In the first half of the 16th century about 500 loan-bankers were active throughout Italy; toward the end of the century about 280 remained in 131 places. Abraham del Banco was involved in the establishment of the famous Venetian Banco Giro in 1619.

[Hermann Kellenbenz]

women bankers

Jewish matrimonial and property laws permitted women to manage capital they acquired through dowry, inheritance, and, in case of innocent divorce or widowhood, their ketubbah. While ketubbah payments to a widow or divorcée might include real estate and houses, highly portable pawn pledges and bonds were particularly suitable. The percentage of women involved in moneylending was high: they were responsible for half of all loans in Northern France in the 13th and 14th centuries and in many communities in 13th century England, one-third in 41 German communities between 1350 and 1500, and from one-twentieth of the larger to one-third of the small loan sums in Austria. These figures represent loans granted by women alone (often widows) or at the head of a business consortium and do not include the many women who acted in conjunction with their husbands or relatives. Some women, most of them widows, were active in top-level business with the nobility or rulers. Such female "top bankers" with loans from 1,000 to 12,000 florins, like *Licoricia of Winchester (active 1242–77), Plume of Klosterneuburg (Austria, 1320–40), Reynette of Koblenz (1365–94), Zorline of Frankfurt (ca. 1380–95), Gentlin of Konstanz (ca. 1420–30), Eva (Hefe) zum Buchsbaum of Frankfurt (1401–52), Ricke of Frankfurt (1451–71), and Sara, called Gutlein of Wiener Neustadt (c. 1475–80), sometimes achieved considerable influence. Due to their high tax contributions, some gained administrative power as tax collector (Selda of Radkersburg, Styria, 1338) and even as parnesset, an elected officer of the local Jewish community (*Kaendlein of Regensburg 1354, Joseppine of Regensburg 1374). Like wealthy male Jews, women were arrested to extort high ransoms and became victims of burglary and murder (*Dulce of Worms 1196, Licoricia of Winchester 1277, Kaendlein of Regensburg c. 1364). In contrast to the Sephardi world, women's mobility was not restricted in Ashkenaz. Although contrary to halakhic standards of female personal modesty, contacts with Christians in connection with business dealings were permitted; business-women traveling alone were allowed to disguise themselves as men or as nuns for self-protection (Sefer Hasidim). Some women used their husband's seal (Reynette of Koblenz 1374, 1384, Ricke of Frankfurt 1451–71), others had their own seals (Disslaba of Regensburg 1398). Some signed their records with their Hebrew signature (Mirl of Friesach, Carinthia 1372, Plumel of Maribor 1442, Priba of Maribor 1468, Leah of Voitsberg, Carinthia 1496). Ricke of Frankfurt left a German will (1470). Many women submitted their financial cases to non-Jewish courts and took oaths. Although systematic research on women's business activities in early modern Europe has yet to be done, it appears that the rate of female involvement was not as high as in medieval times. The outstanding personality was *Glueckel of Hameln (1646/47–1724); also important were other wives and widows of the early "Court Jews," Brendele of Frankfurt (active c. 1541–60), Gertraud Munk of Vienna and Prague (1590–1614), and Esther *Liebmann of Berlin (1677–1713).

[Martha Keil (2nd ed.)]

19th and 20th centuries

Jewish banking in the 19th century begins with the rise of the house of *Rothschild in Frankfurt, a city which became the new banking center of Europe as a result of the political upheaval caused by the French Revolution and the Napoleonic Wars. The founder of the house (which became the symbol of the 19th-century type of merchant banking), Meyer Amschel Rothschild started as a banker to the elector of Hesse-Kassel. His sons rose to prominence as the major European bankers Amschel Mayer in Frankfurt, Solomon Mayer in Vienna, Carl Mayer in Naples, James Mayer in Paris, and Nathan Mayer in London. After the death of Abraham Goldsmid and Francis Baring in 1810, Nathan Rothschild became the dominant figure in the London money market. The majority of the English financial dealings with the continent went through the Rothschilds' offices. After the Congress of Vienna (1815) the Rothschilds extended their business into most European states, specializing in the liquidation of inflated paper currencies and in the foundation of floating public debts. In 1818 they made loans to European governments, beginning with Prussia and following with issues to England, Austria, Naples, Russia, and other stales, partly in collaboration with Baring, Reid, Irving and Company. Between 1815 and 1828 the total capital of the Rothschilds rose from 3,332,000 to 118,400,000 francs.

the merchant bankers

Prominent merchant bankers in Germany besides the Rothschilds were Joseph *Mendelssohn and Samuel *Bleichroeder. Mendelssohn founded his firm in Berlin in 1795, and was joined by his brother Abraham *Mendelssohn in 1804; they issued state loans for industrial development to several foreign countries, particularly Russia. Samuel Bleichroeder, Berlin correspondent of the Rothschilds, established his own business in 1803. His son Gerson Bleichroeder became a confidant of Bismarck and served as his agent for financing the war of 1866 and for the transfer of the French war indemnity in 1871. The Bleichroeder bank also made loans to foreign states. After the death of Gerson Bleichroeder in 1893 his partner Paul Schwabach continued the business. The brothers Moses, Marcus, and Gerson *Warburg founded a bank in Hamburg in 1798. Its main business was concerned with the Hamburg overseas trade, especially transactions with England and the United States. Paul M. *Warburg, a brother of Max M. *Warburg, head of the Hamburg bank before World War i, established a branch office in New York. Toward the end of the 18th century J.M. *Speyer, through his bank's provisioning of armies and exchange business, had a capital of 420,000 florins, the largest Jewish fortune in Frankfurt at that time. In 1809 G.J. Elissen opened a banking house which took the name of J.L. Speyer-Elissen in 1818 and Lazard Speyer-Elissen in 1838. Philipp Speyer and Co., the U.S. branch, negotiated the American credit during the Civil War, participated in the development of the railroads in America, and conducted transactions in Mexico and Cuba, partly in association with the Deutsche Bank. In 1928 Speyer amalgamated with C. Schlesinger, Trier, and Company to form Lazard Speyer-Elissen K.a.A., Frankfurt and Berlin. The bank established by Solomon *Oppenheim in Bonn in 1789 acquired a leading position; at the beginning of the 19th century Solomon moved to Cologne, where his son Abraham became one of the most influential bankers in the Rhineland, financing insurance associations, railroad construction, and industrial investment.

Jewish bankers played an important part in the development of joint stock banks. Ludwig *Bamberger and Hermann Markuse were among the founders of the Deutsche Bank (1870), which was active in financing German foreign trade. The Disconto-Gesellschaft, established by David Hansemann in 1851, which amalgamated with the Deutsche Bank in 1929, had several Jewish partners. Eugen *Gutmann was the main founder of the Dresdner Bank, and Abraham Oppenheim was one of the founders of the Bank fuer Handel und Industrie (Darmstaedter Bank; 1853). The leading personality in the Berliner Handelsgesellschaft (established in 1856) was Carl *Fuerstenberg. Richard Witting, brother of Maximilian Harden, was one of the directors of the National bank fuer Deutschland; when it merged with the Darmstaedter Bank in 1921, Jacob *Goldschmidt, then director of the latter, took control of the new enterprise. In 1932 the two other most important banks in Germany, the Deutsche Bank and the Dresdener Bank, were directed by Oskar *Wassermann and Herbert Gutman respectively.

In England, banks were established by Sir David *Salomons (London and Westminster Bank, 1832), the Stern brothers (1833), Samuel *Montagu (1853), Emile Erlanger (1859), the Speyer brothers, *Seligman brothers, and S. Japhet and Co., many of them immigrants from Frankfurt; the Speyer bank negotiated loans on behalf of Greece, Bulgaria, and Hungary, as well as for Latin American states. David *Sassoon and Company, established in Bombay in 1832, had branches throughout the Orient, handling extensive transactions. Sir Ernest *Cassel, partly in association with Sir Carl Meyer, established banks in Egypt and Turkey. Industrial banks were organized by Sir Moses *Montefiore and the Anglo-American Corporation, which was connected with the diamond and finance corporation of A. Dunkelsbueler, established by Sir Ernest *Oppenheimer. In South Africa the General Mining and Finance Corporation was set up by Hamilton Ehrlich and Turk, and one of the most important enterprises in South African financing was the Barnato brothers' company.

In France Achille *Fould, a competitor of the Rothschilds, was a supporter of Napoleon iii and later his finance minister. Together with his brother Benoit he inherited the Paris firm of Fould, Oppenheimer et Cie., which had been established by his father. Meanwhile the brothers Emile and Isaac *Péreire, who moved to Paris from Marseilles in 1822, financed railway construction in France and Spain. Through the Crédit Mobilier, organized in 1852, they mobilized credit for various investment projects, but ran into difficulties in 1867. Among the other important Jewish banks was the Banque de Paris et des Pays-Bas (1872), with Henri Bamberger as one of the directors. The leading position among the private banks was held by Rothschild; from 1889 to 1901 all loans to Russia from Paris were issued through the Rothschild bank. Baron Maurice de *Hirsch from Munich, son-in-law of the Brussels banker Raphael Jonathan *Bischoffsheim, invested successfully in railroad construction. Other Jewish banks were those of Louis Dreyfus and Lazard Frères. In Italy, where Luigi *Luzzatti's agricultural associations were largely philanthropic, Jewish bankers played a leading part in the foundation of the Banca Commerciale Italiana and the Credito Italiano. The Rothschilds, Sterns, and Goldsmids also invested money in Spain and Portugal.

russia and eastern europe

A number of Jewish banks were established in Vienna during the 19th century, the most influential of which was Arnstein and Eskeles. This bank however was declared bankrupt in 1859. Weikersheim and Company and from 1821 Salomon Rothschild also established banks in Vienna. Jews participated in the foundation of the Niederoesterreichische Eskomptgessellschaft (1853) and the Kreditanstalt (1855), which made an essential contribution to the development of the Vienna stock exchange and extended international loan facilities, also investing in industry and railroads. Leading private banks in Hungary were of Jewish origin, such as the Ungarische Allgemeine Kreditbank (Hungarian General Credit Bank; established in 1867) with Siegmund Kornfeld as a general director, the Pester Ungarische Kommerzial-bank (Hungarian Commercial Bank at Pest), established in 1841 by Moritz Ullmann, and the Ungarische Hypotheken-bank (Hungarian Hypothecary Credit Bank; 1869) with Nándor (Ferdinand) Beck de Madarassy as its general director. In Prague the *Petschek family established a bank in 1920; in Galicia, under the Austrian regime, Brody (Nathanson, Kallir) and Lemberg had Jewish banks. Between the end of the 18th century and the beginning of the 19th Jewish banks of some importance rose in Russia. In St. Petersburg Nicolai and Ludwig *Stieglitz, immigrants from Germany, opened a bank in 1803, which under Ludwig (who with his brother was converted to Christianity in 1812) became one of the leading financial institutions in Russia. Otherwise Jewish banking activity was limited to southern Russia, especially to Berdichev and Odessa. In 1860 Yozel (Yerzel) *Guenzburg, originally a tax farmer, established the St. Petersburg bank J.Y. Guenzburg, and later the discount and credit bank there, managed by his son Horace; Guenzburg also established banks in Kiev and Odessa. Lazar (Eliezer) *Poliakoff opened a bank at Moscow in 1860 and participated in the foundation of the Moskowsky Zemelny Bank and other Moscow banks. Poliakoff and his two brothers also founded banks in southern Russia. Abram *Zak was director of the Petersburg Discount and Credit Bank (1871–93), and Soloveitchik established the Siberian Trade Bank. At the beginning of the 20th century private banks of some importance were those of H. *Wawelberg in St. Petersburg, and O. Chayes and R. Sonschein and Company in Odessa.

Toward the end of the 18th century several bankers such as Koenigsberger, Levy, and Simon Simoni emigrated from the west to Poland. Jacob *Epstein, court purveyor to King Stanislas ii Augustus, founded an important dynasty of bankers. The Polish revolt of 1863 caused the bankruptcy of many Jewish banks. The bank of Wilhelm Landauer in Warsaw, established in 1857, closed in that year. However, Landauer returned to Warsaw some years later and opened a joint stock company in 1913. Mieczyslaw Epstein founded the Warsaw Discount Bank in 1871. Leopold *Kronenberg took part in the foundation of the Warsaw Credit Union in 1869 and the following year established the first joint stock bank in Poland, Bank Handlowy at Warsaw. The Natanson family bank was in operation between 1866 and 1932. In Romania, Maurice *Blank (d. 1921) established the house Marmorosch, Blank and Company, which his son, Aristide, directed after him.

scandinavia and the netherlands

The Goeteborgs Bank in 1848 was established in Sweden through the agency of L.E. Magnes, Morris Jacobsson, Edward Magnus, and others. Theodor *Mannheimer was the first managing director of Scandinaviska Kreditakteibolaget, and Louis *Fraenkel managed Stockholm's Handelsbank from 1893 to 1911. The Danish merchant financiers Joseph *Hambro and his son Carl Joachim *Hambro settled in London in 1832 and founded Hambro's Bank there. A leading Danish banker was Isaac *Glückstadt, who managed the Landsmans-Bank at Copenhagen from 1872 until his death in 1910; he was succeeded by his son Emil. A. Levy Martin was finance minister in 1870 and from 1873 till 1897 director of the Copenhagen Handelsbank. From 1913 until his death in 1923, Markus Rubin was director of the Danish Notenbank. In Holland the firm of Lissa and Kann was established in 1805. Another Dutch firm of the same era was Wertheimer and Gompertz, later known as the Bankassociatie. In 1859 the firm of Lippman, Rosenthal and Company was established as a subsidiary of the International Bank of Luxembourg. Its international activities were widespread, especially through Netherlands state loans. The bank of Elzbacher in Amsterdam later merged with the Amsterdamsche Bank. In Rotterdam Rothschild was represented by Moses Ezechiels en Zonen (liquidated in 1888). The bank of Benjamin Marx (established in 1869), later Marx and Company, was in existence until 1922. In Belgium Jacques Errera, Joseph Oppenheim, and Isaac Stern, all from Brussels, and the brothers Sulzbach and J. May from Frankfurt participated in the foundation of the Banque de Bruxelles in 1871. Private banks were those of F.M. Philippson and Company, the Societé Henri Lambert and Cassel and Company. Moving from Alsace to Switzerland in 1812, Isaac Dreyfus established a bank in Basle; after 1849 the firm was known as Isaac Dreyfus Soehne. It participated in the foundation of the Basler Handelsbank as well as the Basler Bankverein. The Hitler regime spelled the end of Jewish banking in the greater part of Europe; all Jewish banks in Germany were liquidated or transferred to a non-Jewish company (Solomon Oppenheim Jr. and Company in Cologne, for example, was changed into the firm of Pferdmenges and Company).

the united states

Already in early colonial times individual Jews were active in America as money brokers, such as Asser *Levy, who functioned in New York City during the second half of the 17th century. Often such figures were helped by their extensive family or fellow-Jewish contacts overseas, as was the case with David *Franks, who was instrumental in raising money for the British army during the French and Indian War with the aid of his brother Moses, a London financier. The best known Jewish financier of the times was the legendary patriot Haym *Salomon, an immigrant from Poland who succeeded under extremely trying conditions in raising large amounts of desperately needed cash for the American Revolution by negotiating bills of exchange with France and the Netherlands. Yet another figure who helped finance the war for American independence was Isaac *Moses, later among the founders of the Bank of New York. It was not until the middle of the 19th century, however, with the arrival in America of a large German-Jewish immigration, that Jewish banking houses on the European model came to exist in the United States. Some of the founders of these firms, like Philip and Gustav *Speyer of Speyer & Co., went to the United States as American representatives of already established European concerns; others, like August *Belmont, crossed the Atlantic with a degree of previously acquired banking experience; still others, like the *Lehman brothers, Meyer and Emanuel, were essentially self-made men. Among other Jewish banking houses started by immigrants from Germany that developed into financial powers during the years 1840–1880 were Kuhn, Loeb Co., Lazard Frères, J.W. Seligman Co., Goldman, Sachs & Co., and Ladenburg, Thalman & Co. All of these firms functioned essentially as investment bankers – the more established field of commercial banking offered relatively few opportunities to the German-Jewish immigrant – a capacity in which they helped to finance large numbers of American utilities and corporations whose rapid growth throughout the latter half of the 19th century created an insatiable demand for capital. To raise such funds these Jewish houses not only freely utilized their widespread European connections, particularly in France, England, and Germany, but created a chain of interlocking associations and directorates among themselves which enabled them quickly to mobilize sums many times larger than their individual holdings and to compete successfully with gentile firms several times their size. Not only was it common for the children and relatives of a given firm to marry each other, but marital alliances frequently occurred as well among different Jewish banking families, as was the case with the *Loebs, the *Kuhns, the *Schiffs, and the *Warburgs. Frequently too the children of such families married into families of large German-Jewish companies in a variety of other fields and the latter would then proceed to raise capital through the banking houses which they had joined. Socially, the result of such commercial and kinship ties was the creation of a German-Jewish banking and business aristocracy based in New York City whose descendants continued for over a century to play a dominant role in the financial, cultural, and political life of the American Jewish community, and to a lesser extent, of the nation at large. The contribution of such Jewish banking houses to the process of capital formation in the United States in the late 19th and early 20th century was considerable by any standard. Several of them, such as Speyer & Co., August Belmont & Co., and J. & W. Seligman, raised large sums for the federal government both during and after the Civil War (the Jewish house of Erlanger Co., on the other hand, obtained sizeable loans for the Confederacy); others, such as Kuhn, Loeb, were particularly active in the westward expansion of the railroads. In the late 19th century Seligman Co. alone was capitalized at an estimated $10,000,000, while during the Russo-Japanese War of 1905 Jacob *Schiff of Kuhn, Loeb was able on short notice to float a bond issue of $200,000,000 on behalf of the Japanese government. Although the total assets of such Jewish firms were nevertheless small when compared to those of the American banking system as a whole, their clannishness and ability to coordinate their actions made them the focus of antisemitic agitation from the 1890s on, when caricatures of ruthless Jewish oligarchs at the head of an international Jewish money conspiracy began to abound in the ranks of the Populist movement. In reality, however, the fiscal policies of the German-Jewish firms tended to be highly conservative and their owners exercised their fortunes with an unusual degree of social as well as fiscal responsibility. Although a number of the great 19th-century Jewish banking houses such as Lazard Frères and Kuhn, Loeb have survived into the present, none has continued as a family or even exclusively Jewish concern and even the most prosperous of them have lost their former importance as a result of the steady trend in the American financial market toward the predominance of ever larger and more impersonal corporations. At the same time, the general field of commercial banking in the United States has remained relatively closed to Jewish participation despite heavy Jewish involvement in such related fields as stock brokerage, investment analysis, and corporate management. A study undertaken by B'nai B'rith in 1939 revealed that out of 93,000 bankers in the United States only 0.6% were Jewish, and that even in New York City Jews formed only 6% of banking executives as compared to 28% of the general population. Similar statistics for a later period are unavailable, but reports of discrimination against Jews in major banks throughout the country persist and in 1968 the American Jewish Committee publicly filed a complaint before the Human Rights Commission of New York City charging the banking system with job bias against Jews.

[Hermann Kellenbenz]

In the latter years of the 20th century and the early years of the 21st, the banking industry consolidated, and some old-line "Jewish" firms were bought or incorporated into others as buyouts and mergers changed the landscape. As Jews assimilated into American life, many advanced in the workplace less along ethnic lines and more along lines of achievement. To be sure, there were many Jews in leadership positions in prominent financial institutions: Felix *Rohatyn at Lazard Frères, Bruce *Wasserstein at several large firms, Sanford *Weill at Citibank, and others, but their financial success was largely attributed to their business acumen rather than to their religious or ethnic background.

George Soros, a Hungarian immigrant, became one of the most successful investors and later spread his wealth to nonprofit organizations and to political causes. Michael Steinhardt and others made their mark in hedge funds or as independent venture capitalists, accumulating great wealth but also making large philanthropic contributions. Carl *Icahn and Irwin L. *Jacobs developed reputations as corporate raiders. Abby Joseph Cohen was the leading investment strategist for Goldman Sachs, and Henry Kaufman, a well-known economist, offered advice about the stock market that was followed by many. In addition, on Wall Street, such firms as Schwab & Co., headed by Charles *Schwab, achieved great success as a low-price stock-market firm.

Some investors – Ivan *Boesky, Michael *Milken, Marc *Rich – became infamous for their questionable financial activities, but whether their religion played a role is highly unlikely. They were perceived as corrupt financial figures, not corrupt Jewish financial figures.

In the last years of the 20th century, a number of Jews had important positions in the nation's economic community. Alan *Greenspan, a Republican, headed the Federal Reserve System for almost 20 years and became a powerful force in Washington. During the Clinton administration, Jewish economists, including Robert *Rubin, the Treasury secretary, and Lawrence *Sommers, his successor and later president of Harvard University, held Cabinet-level positions, and James D. *Wolfensohn headed the World Bank from 1995 to 2005. His successor, chosen by President George W. Bush, was Paul D. Wolfowitz, a veteran foreign policy and defense official in Republican administrations.

[Stewart Kampel (2nd ed.)]

Assessment of the Role of Jewish Bankers

As shown above, Jewish activity, in particular in the late Middle Ages and in the 18th and 19th centuries, often played an important, sometimes a central, constructive role in the economy and social life of various countries, sometimes even internationally. However, banking always remained a subsidiary Jewish economic activity. Frequently, when Jews appeared to command large assets, they gave this impression because they mostly owned mobile property. The wealthy Jews always formed a small group, particularly in comparison with the wealthy nobles or Christian merchants. It was really only in the 19th century that Jewish financiers achieved remarkable wealth, largely resulting from the activities of some European courts in consequence of the upheavals brought about by the French Revolution and the Napoleonic Wars. With the growth of joint stock banks and of central banks in the middle of the 19th century the field of private banking became limited. Around the beginning of the 20th century, Jewish influence in finance and banking had reached its zenith; afterward it declined at an accelerating rate.



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