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User:DGG/History of Jews in American banking

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American Jews have played a major role in American finance or "Wall Street", both at investment banks and investment funds.[1] German Jewish bankers began to assume an important role in American finance in the 1830s when government and private borrowing to pay for canals, railroads and other internal improvement increased rapidly and significantly. Men such as August Belmont (Rothschild's agent in New York and a leading Democrat), Philip Speyer, Jacob Schiff (at Kuhn, Loeb & Company), Joseph Seligman,Philip Lehman (of Lehman Brothers), Jules Bache, and Marcus Goldman (of Goldman Sachs) illustrate this financial elite.[2] These families and the firms which they controlled were bound together by religious and social factors, and by the prevalence of intermarriage. These personal ties fulfilled real business functions before the advent of institutional organization in the 20th century.[3][4] Nevertheless, antisemitic elements often falsely targeted them as key players in a supposed Jewish cabal conspiring to dominate the world.[5]

Since the late 20th century have Jews played a major role in the hedge fund industry, according to Zuckerman (2009)[6] Thus SAC Capital Advisors,[7] Soros Fund Management,[8] Och-Ziff Capital Management,[9] GLG Partners[10] and Renaissance Technologies[11] are large hedge funds cofounded by Jews. They have also played a pivotal role in the private equity industry, co-founding some of the largest firms, such as Blackstone,[12] Carlyle Group,[13] Warburg Pincus,[14] and KKR.[15][16][17]

Colonial times

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An early Jewish banker in the United States was Asser Levy who lived in colonial New York during the second half of the 17th century.[18] In the 1700s, Jewish bankers included Haym Solomon of Revolutionary war era, and Isaac Moses who with Alexander Hamilton founded the Bank of New York in 1784.[19] The most prominent Jewish banker of the eighteenth century was Robert Morris, the key financier of the American Revolution.[20]


  • Haym Solomon in the Revolutionary war (see "Transactions of the Jewish Historical Society of America,"passim),

Nineteenth century

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Banking

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In the middle of the nineteenth century, a number of German Jews founded investment banking firms which later became mainstays of the industry. Most prominent Jewish banks in the United States were investment banks, rather than commercial banks.[21] Jonathan Knee postulates that Jews were forced to focus on the development of investment banks because they were excluded from the commercial banking sector.[22] In many cases, the efforts of Jewish immigrants to start banks was enabled due to the substantial support of their Jewish banking connections in Europe.[23] Several major banks were started following the mid 1800s by Jews, including Goldman Sachs (founded by Samuel Sachs and Marcus Goldman), Kuhn Loeb (Solomon Loeb and Jacob H. Schiff), Lehman Brothers (Henry Lehman),Salomon Brothers, and Bache & Co. (founded by Jules Bache).[24]


Several Jewish bankers played key roles in providing government financing for both sides of the Civil war: Speyer and Seligman family financed the Union, and Emile Erlanger and Company financed the Confederacy.[25][26]

Jewish banking houses were instrumental to the process of capital formation in the United States in the late 19th and early 20th century.[27] For example, the firm of Kuhn, Loeb & Co. played a prominent role in the area of railway finance.

In the late 1860s, The Seligman family transitioned from merchandising to banking, setting up operations in New York, St. Louis, and Philadelphia as well as Frankfurt, Germany, London and Paris that gave European investors an opportunity to buy American government and railroad bonds. In the 1880s the firm provided financing for French efforts to build a canal in Panama as well as the subsequent American endeavor. In the 1890s J.& W. Seligman & Co. Inc. underwrote the securities of newly formed trusts, participated in stock and bond issues in the railroad and steel and wire industries, and invested in Russia and Peru, and in American in shipbuilding, bridges, bicycles, mining, and other enterprises. In 1910 William C. Durant of the fledgling General Motors Corporation gave control of his company to the Seligmans and Lee, Higginson & Co. in return for underwriting $15 million worth of corporate notes.[28][29][30]

Populist targeting of Jews

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Beginning in the early 1880s, declining farm prices also prompted elements of the Populist movement to blame the perceived evils of capitalism and industrialism on Jews because of their alleged racial/religious inclination for financial exploitation and, more specifically, because of the alleged financial manipulations of Jewish financiers such as the Rothschilds.[31] Although Jews played only a minor role in the nation's commercial banking system, the prominence of Jewish investment bankers such as the Rothschilds in Europe, and Jacob Schiff, of Kuhn, Loeb & Co. in New York City, made the claims of anti-Semites believable to some.

The Morgan Bonds scandal injected populist anti-Semitism into the 1896 presidential campaign. It was disclosed that President Grover Cleveland had sold bonds to a syndicate which included J. P. Morgan and the Rothschilds house, bonds which that syndicate was now selling for a profit, the Populists used it as an opportunity to uphold their view of history, and prove to the nation that Washington and Wall Street were in the hands of the international Jewish banking houses.

Another focus of anti-Semitic feeling was the allegation that Jews were at the center of an international conspiracy to fix the currency and thus the economy to a single gold standard.[32]

Jacob Schiff

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Jacob Schiff

Jacob Schiff was perhaps the most influential Jewish banker in the United States at the end of the nineteenth century. He was president of Kuhn Loeb and financed railroads such as the Pennsylvania Railroad and the Louisville and Nashville Railroad, and he took part in the reorganization of the Baltimore & Ohio Railroad in 1896-99, and at various times aided the Westinghouse Electric Company, and the Western Union Telegraph Company.[33]

Schiff was offended by contemporary non-Jews such as Charles W. Eliot (president of Harvard university) who suggesting that the Jewish bankers wielded an "international and interlocking Jewish money power". Schiff took steps to combat these viewpoints in the business world, and attempted to educate Eliot and others who shared those viewpoints.[34]

Twentieth century

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1920s

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Arthur Hertzberg argues that, contrary to the claims that Jews controlled banking and finance, the opposite was true. Hertzberg asserts that Jews were a minority on Wall Street and that there was an "effective ban on allowing Jews into the banking business."[35]

Bank of the United States

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The Bank of United States was a New York City bank that failed in 1930. The run on its Bronx branch is said to have started the collapse of banking during the Great Depression.[36]

[37]

1930s

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The radio speeches of Father Coughlin in the late 1930s attacked Franklin D. Roosevelt's New Dealand the notion of a Jewish financial conspiracy. Such views were also shared by some prominent politicians; Louis T. McFadden, Chairman of the United States House Committee on Banking and Currency, blamed Jews for president Roosevelt's decision to abandon the gold standard, and claimed that "in the United States today, the Gentiles have the slips of paper while the Jews have the lawful money."[38]

ADL

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  • ADL rebukes Rush Limbaugh for comments relating Jews and banking.[39]
  • ADL demands apology from Time Magazine[40]


References

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  1. ^ "Banking and Bankers," Encyclopaedia Judaica. (2nd ed. 2008)online
  2. ^ Stephen Birmingham, "Our Crowd": The Great Jewish Families of New York (1967) pp 8-9, 96-108, 128-42, 233-36, 331-37, 343,
  3. ^ Vincent P. Carosso, "A Financial Elite: New York's German-Jewish Investment Bankers," American Jewish Historical Quarterly, 1976, Vol. 66 Issue 1, pp 67-88
  4. ^ Barry E. Supple, "A Business Elite: German-Jewish Financiers in Nineteenth-Century New York," Business History Review, Summer 1957, Vol. 31 Issue 2, pp 143-177
  5. ^ Richard Levy, ed. Bankers, Jewish" in Antisemitism: A Historical Encyclopedia of Prejudice and Persecution (2005) pp 55-56
  6. ^ Bruce Zuckerman, The Jewish Role In American Life (2009) pp 64, 70
  7. ^ Led by Steven Cohen; Bruce Zuckerman, The Jewish Role In American Life (2009) p. 71
  8. ^ Bruce Zuckerman, The Jewish Role In American Life (2009) p. 72
  9. ^ "Schechter school mourns founder Golda Och, 74" New Jersey Jewish News Jan. 13, 2010
  10. ^ "The 400 Richest Americans:#355 Noam Gottesman" Forbes Sept 17. 1008
  11. ^ Steven L. Pease. The Golden Age of Jewish Achievement (2009) p. 510
  12. ^ See Jamie Johnson, "Wasps Stung over Renaming of the N.Y.P.L." Vanity Fair Daily May 19, 2008
  13. ^ Robin Pogrebin, "Donor Gives Lincoln Center $10 Million",New York Times Sept. 30, 2009
  14. ^ Ron Chernow, The Warburgs (1994) p. 661
  15. ^ R. William Weisberger, "Jews and American Investment Banking,"American Jewish Archives, June 1991, Vol. 43 Issue 1, pp 71-75
  16. ^ On the careers of John Gutfreund (atSalomon Brothers); Felix Rohatyn (based at Lazard); Sanford I. Weill (of Citigroup) and numerous others see Judith Ramsey Ehrlich, The New Crowd: The Changing of the Jewish Guard on Wall Street (1990), pp. 4, 72, 226.
  17. ^ Charles D. Ellis, The Partnership: The Making of Goldman Sachs (2nd ed. 2009) pp 29, 45, 52, 91, 93
  18. ^ Baron, p 223
  19. ^ Krefetz, p 46
  20. ^ Sombart, p 59
  21. ^ Krefetz p 54-55
  22. ^ Knee, Jonathan A. (2007). The Accidental Investment Banker: Inside the Decade That Transformed Wall Street. Random House Digital, Inc. p. 31.
  23. ^ Bodnar, John (1991). The transplanted: a history of immigrants in urban America. Indiana University Press. p. 134.|quote=Jewish banking houses such as those of the Guggenheims, Wertheims, and Baches actually received financial and human resources from Jewish bankers in Europe.}}
  24. ^ Krefetz, p 46
  25. ^ Baron, p 224
  26. ^ J. C. Schwab, "Confederate States of America," p. 102, New York, 1901)
  27. ^ Baron, Salo Wittmayer; Kahan, Arcadius; Gross, Nachum (1975). Economic history of the Jews. p. 224. 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.
  28. ^ Birmingham, Our crowd pp. 231-8, 350
  29. ^ Perry, p 148
  30. ^ Jay P. Pederson, ed. International directory of company histories: Volume 61 (2004) p 141
  31. ^ Knight, Peter (2003). Conspiracy theories in American history: an encyclopedia, Volume 1. ABC-CLIO. p. 82.
  32. ^ Albanese, Catherine L. (1981). America, religions and religion. Wadsworth Pub. Co. By the 1890s anti-Semitic feeling had crystallized around the suspicion that the Jews were responsible for an international conspiracy to base the economy on the single gold standard.
  33. ^ Cohen
  34. ^ Cohen, p 52-3
  35. ^ Hertzberg, Arthur (1989). The Jews in America: four centuries of an uneasy encounter : a history. Columbia University Press. p. 233.
  36. ^ Gray, Christopher (18 August 1991), "Streetscapes: The Bank of the United States in the Bronx; The First Domino In the Depression", The New York Times
  37. ^ Wenger, Beth S. (1999). New York Jews and the Great Depression: Uncertain Promise. Syracuse University Press. p. 11.
  38. ^ Arad, Gulie Ne'eman (2000). America, Its Jews, and the Rise of Nazism. Indianapolis: Indiana University Press. p. 174. ISBN 0253338093.
  39. ^ "ADL Rebukes Limbaugh for remarks on Jews".
  40. ^ "ADL Demands Apology for Time Magazine Sept 9/11 Memorial Cover".
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