JUDAICA - Wisdom In Torah

anking and bankers
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 oldline
“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
118 ENCYCLOPAEDIA JUDAICA, Second Edition, Volume 3