Marcus Goldman
banking interests in Wall Street , that , gradually , little by little , the authority of Mr . Schiff , from the financial point of view , over the railroads of the United States has been equaling and then surpassing that obtained by Mr . Morgan , until at last it is acknowledged that there is none other here who can match in the extent or strength of his power that which Mr . Schiff has obtained .”
Eventually , Schiff would channel hundreds of millions of dollars — and perhaps billions — of European investment capital into American corporations , in the process shaping the nation ’ s economic trajectory . The orbit of German-Jewish dynasties who formed his social and professional circle also played a vital role in the development of the modern economy , and the policies and institutions that undergird it .
Paul Warburg , Schiff ’ s partner and brother-in-law , was one of the architects of the Federal Reserve system and served on the first Fed board . Edwin Seligman , son of Joseph Seligman , was a Columbia University economist who led the push to ratify the 16th amendment authorizing a federal income tax . He was one of the intellectual forefathers of progressive taxation , on which our tax system is based .
Henry Goldman and Philip Lehman , childhood friends whose fathers had cofounded Goldman Sachs and Lehman Brothers , respectively , helped to pioneer the modern IPO . Pushed out of railroad finance by the major investment houses ,
Courtesy of The Jacob Rader Marcus Center of the American Jewish Archives , Cincinnati , Ohio at americanjewisharchives . org
Jacob Schiff
they zeroed in on the retail businesses ignored by the top Wall Street firms , pricing intangibles such as future earning power and goodwill into their valuations . A generation of household name businesses — B . F . Goodrich , Sears and Woolworths , to name a few — flourished as a result of their financial innovation .
But the legacy of the “ money kings ”— a term often applied to Schiff and the Seligmans , but also to moguls such as Morgan and Jay Gould — went far beyond finance . Their philanthropic impact rivaled their financial one . That today there is a thriving American Jewish community at all owes , in no small part , to their efforts .
Between 1890 and 1920 , the Jewish population of the United States swelled from 400,000 to 3.4 million as refugees from Eastern Europe and the Russian Empire fled oppressive living conditions and mob violence .
The deluge predictably caused a backlash and politicians stoked fears of disease-carrying foreign criminals who were stealing American jobs and contributing to the moral and cultural decay of American society . ( Sound familiar ?) For years , Schiff , the de facto leader of American Jewry , and his fellow philanthropic stewards beat back efforts to block the immigration of Jews and others who nativists claimed would dilute the nation ’ s Anglo- Saxon pedigree , and they shouldered a weighty obligation to take care of their own that grew heavier with each shipload of immigrants that arrived in New York Harbor . They poured millions into efforts
to help Jews in the United States and abroad . Job training programs , schools , hospitals , English lessons — they helped to found and fund organizations that provided these services and much more , not only anticipating the immediate needs of the new arrivals but paving the way for their rapid “ Americanization .”
There was also a tragic aspect to the story of the “ money kings .” To many American Jews , it seemed they were on the cusp of a new era , one in which ancient prejudices and stereotypes were receding . But not only would antisemitism come roaring back in a new and virulent form during the early 20th century , but German-Jewish bankers — and Schiff and his Warburg in-laws in particular — would figure prominently in the conspiracy theories that persist to this day . In this , America ’ s leading automaker played a singular part . For seven years spanning much of the 1920s , Henry Ford ’ s Dearborn Independent newspaper , week after week , attacked Jews for everything you could imagine , from causing financial panics and wars to wrecking American baseball . These articles were anthologized in four volumes as The International Jew : The World ’ s Foremost Problem and published throughout the world , including in Germany , where Adolf Hitler ’ s growing Nazi movement blanketed the country with this antisemitic propaganda .
More than 100 years have passed since the time of the “ money kings .” But their influence is inescapable , whether strolling through Manhattan , whose very landscape they helped to shape , or in the mechanics of the financial markets . The ongoing immigration wars , the debate over tech monopolies and income inequality , rising antisemitism — there are many eerie modern echoes from that era . Today , the world of over a century ago , the world of the “ money kings ,” seems closer than ever .
Daniel Schulman is the New York Times best-selling author of Sons of Wichita , a biography of the Koch family that was a finalist for the Financial Times and McKinsey Business Book of the Year Award . The deputy editor ( news & politics ) of Mother Jones , his latest book is The Money Kings : The Epic Story of the Jewish Immigrants Who Transformed Wall Street and Shaped Modern America ( Knopf , 2023 ), from which this article has been adapted .
www . MoAF . org | Spring 2024 | FINANCIAL HISTORY 19