Jacob Schiff

Jacob Henry Schiff
Born	Jakob Heinrich Schiff Frankfurt, Germany
Died	25 September 1920(1920-09-25) (aged 73)
Occupation(s)	Banker, entrepreneur, philanthropist
Known for	Funding American railroads; financing Japan during Russo-Japanese War; Jewish philanthropy

Jacob Henry Schiff (originally Jakob Heinrich Schiff; January 10, 1847 – September 25, 1920) was a German-born American banker, entrepreneur, and philanthropist renowned for funding the growth of American railroads and backing Japanese military efforts during the Russo-Japanese War.

Schiff was born in Frankfurt, Germany, and emigrated to the United States following the American Civil War. He became affiliated with the firm Kuhn, Loeb & Co. Operating from Wall Street, he emerged as a preeminent Jewish financier between 1880 and 1920, actively engaging in significant Jewish matters such as aiding Russian Jews, combating global antisemitism, supporting immigrant assistance, and promoting Zionism. His leadership extended to directorship roles at major corporations including the National City Bank of New York, Equitable Life Assurance Society, Wells Fargo & Company, and the Union Pacific Railroad. His business pursuits frequently intersected with those of E. H. Harriman.

Early life and education

Born in 1847 within Frankfurt’s Judengasse, Schiff was the son of Moses and Clara (née Niederhofheim) Schiff, belonging to an esteemed Ashkenazi Jewish rabbinical lineage tracing back to 1370. Moses Schiff worked as a broker for the Rothschilds. Jacob received his education in Frankfurt and commenced an apprenticeship in banking and brokerage in 1861.

Following the conclusion of the Civil War in 1865, Schiff arrived in New York City on August 6. By November 1866, he had established himself as a broker and joined Budge, Schiff & Company in 1867. He obtained U.S. citizenship by September 1870. After Budge, Schiff & Company dissolved in 1872, he briefly returned to Germany to oversee the Hamburg branch of the London & Hanseatic Bank. Upon his father’s passing in 1873, Schiff went back to Frankfurt but soon accepted an invitation from Abraham Kuhn of Kuhn, Loeb & Co. to join their New York office in 1874. Shortly after, he assumed effective control over the firm’s operations.

Career

Together with H. B. Claflin, Marcellus Hartley, Robert L. Cutting, and Joseph Seligman, Schiff co-established the Continental Bank of New York in August 1870.

Kuhn, Loeb & Company

Schiff became part of Kuhn, Loeb & Company in January 1875, utilizing his international connections with Sir Ernest Cassel from London, Robert Fleming of Dundee, and associates at the Banque de Paris et des Pays-Bas. On May 6, 1875, he wed Therese Loeb, daughter of Solomon Loeb. The couple had two children: Mortimer L. Schiff and Frieda, who married Felix M. Warburg in 1895. Mortimer and Felix both became partners at Kuhn, Loeb & Co.

By 1885, Schiff had risen to lead Kuhn, Loeb & Company. He financed prominent Eastern railroads such as the Pennsylvania Railroad and the Louisville & Nashville Railroad, and played a key role in restructuring the Baltimore and Ohio Railroad between 1896 and 1899. His investments also included companies like American Smelting & Refining Company (ASARCO), the Westinghouse Electric Company, and Western Union. Nevertheless, his involvement in reorganizing New York's Metropolitan Street Railway in 1902 met with limited success.

In collaboration with E. H. Harriman, Schiff engaged in competitive efforts against rivals like James J. Hill and J.P. Morgan & Company for dominance over Western railroads. He held board memberships at institutions including the Equitable Life Assurance Society, National City Bank of New York, Central Trust Company, Western Union Telegraph Company, Union Pacific Railroad, and Bond & Mortgage Guarantee Company. In September 1914, he joined the board of Wells Fargo & Company, taking over from his brother-in-law, Paul Warburg, who departed to serve on the initial board of the Federal Reserve.

National loans

One of Schiff's most significant financial undertakings took place during the Russo-Japanese War (1904–1905), when he met with Takahashi Korekiyo, the deputy governor of the Bank of Japan, in Paris in April 1904. Through Kuhn, Loeb & Co., Schiff consented to provide loans amounting to $200 million (equivalent to $ billion in )—a pioneering issuance of Japanese bonds on Wall Street. These funds financed roughly half of Japan’s military campaign. Schiff’s support stemmed partly from his conviction in national determination over monetary gold and Japan’s position as an underdog challenging a European empire. Additionally, it likely represented a reaction to antisemitic measures by the Russian Empire, notably the 1903 Kishinev pogrom.

This financing drew international attention and had profound effects. Japan’s armed forces, dependent on imported weaponry, benefited directly from Schiff’s capital infusion. In gratitude, Japan honored Schiff with the Order of the Sacred Treasure in 1905 and the Order of the Rising Sun, Gold and Silver Star in 1907—the second highest rank—making him the first foreign recipient personally recognized by Emperor Meiji. Furthermore, he was granted a private audience with King Edward VII of the United Kingdom in 1904.

Schiff's lending extended beyond Japan to various countries, including those that later formed part of the Central Powers. During World War I, he advocated to U.S. President Woodrow Wilson and Allied leaders for a prompt resolution to the war, even at the expense of victory. Concerned about his relatives in Germany and America's future, he facilitated humanitarian loans to France and other nations while opposing submarine warfare.

He strictly forbade any loan capital from reaching the Russian Empire due to its antisemitic Tsarist government. After the Tsar's abdication in 1917, Schiff anticipated an end to Jewish persecution and consequently lifted his restrictions on lending to Russia.

Nonetheless, following the Bolshevik seizure of power:

"Schiff's objection to Russia was rooted in its anti-Semitism. He never supported socialism domestically. After the Tsar’s downfall in March 1917 and Alexander Kerensky’s provisional government declared Jews equal citizens, Schiff openly backed them and utilized his wealth along with Kuhn Loeb resources to provide substantial loans to Kerensky’s administration. When Lenin and Trotsky assumed control in November 1917, Schiff promptly repudiated them, ceased further funding, began financing anti-Bolshevik factions, and demanded repayment of funds loaned to Kerensky. He also participated in British initiatives encouraging Russian Jews to continue resisting Germany."

Charitable endeavors

Guided by the Jewish value of Zedakah, Schiff committed from an early age to donate a tenth of his earnings to charitable causes. He maintained a deep affinity for the Jewish community, exemplified through philanthropy such as founding the Jewish Industrial Removal Office, which relocated Jewish immigrants from New York to Western states, and establishing an immigrant gateway via Galveston, Texas. He supported aid for victims of Russian pogroms and contributed to institutions like Hebrew Union College, the Jewish Theological Seminary, the Jewish Division of the New York Public Library, and the American Jewish Committee.

As a prominent American Jewish benefactor, Schiff contributed extensively across nearly every major Jewish initiative, including presiding over the Montefiore Home for Chronic Invalids and backing organizations such as the Young Men's Hebrew Association and New York’s Jewish Theological Seminary.

His generosity also reached secular endeavors: he served on the Board of Managers for the New York Zoological Society and supported groups like the Boy Scouts of America, Harvard Semitic Museum, American Museum of Natural History, Metropolitan Museum of Art, American Fine Arts Society, American Geographical Society, and Barnard College. Moreover, he championed civil rights and social welfare organizations including the American Red Cross, Visiting Nurse Service of New York, New York’s Henry Street Settlement, and the Tuskegee Institute.

Schiff actively worked toward enhancing civic life in New York City, holding vice presidency at the New York Chamber of Commerce and engaging with the Committee of 70, which played a role in dismantling the corrupt practices of the Tweed Ring. To mark his 70th birthday, he gifted $700,000 to various charitable entities and public institutions.

Upholding the Talmudic teaching that "twice blessed is he who gives in secret," Schiff seldom attached his name publicly to funded buildings—except for Montefiore Hospital’s Schiff Pavilion—and preferred discretion regarding his donations. His total philanthropic contributions are estimated between $50 million and $100 million.

World War I

The Action Française movement, led by Charles Maurras, accused Schiff of favoring Germany and impeding American entry into World War I. Maurras alleged that a telegram sent by Schiff and other American Jewish figures persuaded President Wilson to accept German demands at the post-war peace negotiations, including holding a plebiscite in Upper Silesia instead of transferring it to Poland. However, no evidence of such a telegram has ever been found. In reality, Schiff had stopped funding Germany and the Central Powers by 1914, ceased using German publicly, and actively backed the Allied powers.

As a follower of Reform Judaism, Schiff was an advocate for secular Zionism. Although he disagreed with certain aspects of Theodor Herzl’s vision and was concerned that Zionism might cast doubts on his allegiance to America, he made substantial donations to Jewish initiatives in Israel, such as the Technical Institute of Haifa. When conditions deteriorated for Jews in Eastern Europe amid the Russian Revolution of 1917 and ensuing turmoil, Schiff increased his financial support for the Zionist cause. He expressed willingness to join the movement if permitted to release a prepared statement, but since this was declined, he never officially became a member.

Journalist George Kennan observed that Schiff funded revolutionary propaganda during the Russo-Japanese War and the 1905 Revolution through the Society of Friends of Russian Freedom. According to The Jewish Communal Register of New York City, Schiff utilized his resources and influence to assist opponents of Tsarist Russia and helped prevent Russia from accessing U.S. financial markets.

Death

Schiff passed away at his residence on Manhattan’s Fifth Avenue on September 25, 1920. His funeral took place three days later at Temple Emanu-El in Manhattan.

His estate was appraised at approximately $50 million (equivalent to about $ today). He allocated $1.35 million in bequests to various organizations, mainly those he supported during his lifetime. The largest donations included $500,000 to the Federation for Jewish Philanthropic Societies of New York City and $300,000 to the Montefiore Home.

He was interred at Salem Fields Cemetery in Brooklyn.

Legacy

Following his death, leadership of Kuhn, Loeb & Company passed to his son, Mortimer Leo Schiff (1877–1931).

In 1982, Schiff was honored with induction into the Junior Achievement U.S. Business Hall of Fame.

The Jacob Schiff Center, bearing his name, served as a significant Jewish cultural hub and synagogue from the 1930s through at least the 1960s in the Fordham neighborhood of The Bronx.

Additionally, New York City public school number 192 in West Harlem carries his name and educates students from pre-K through fifth grade.

In Germany, an effort to name a street Jacob-Schiff-Straße in Frankfurt—intended to recognize his philanthropic contributions—was reversed by the Nazi regime in 1933. It was renamed Mummstraße as part of their aryanization policies.

Family

• Wife: Therese (née Loeb)
• Children: Mortimer Schiff; Frieda Warburg, née Schiff
• Father: Moses Schiff
• Mother: Clara Schiff, née Niederhofheim
• Granddaughter: Dorothy Schiff
• Grandsons: John M. Schiff, Henry Schiff
• Great Grandson: David T. Schiff
• Great-Great-Grandson: Hubert Jacob Henry Schiff
• Son-in-Law: Felix Warburg
• Brother-in-Law: Paul Warburg

Andrew Neman Schiff, son of David T. Schiff, was formerly married to Karenna Gore—daughter of former Vice President Al Gore—with whom he had three children prior to their divorce in 2010.

References

• Gower, Adam. (2018). Jacob Schiff and the Art of Risk, (Palgrave Studies in the History of Finance) - https://jacobschiff.com/
• Cohen, Naomi Wiener. (1999). Jacob H. Schiff: a Study in American Jewish Leadership. Hanover, New Hampshire: University Press of New England.
• Schiff, Jacob Henry and Cyrus Adler. (1928). Jacob H. Schiff; his Life and Letters. Garden City, New York: Doubleday.

External links

• Jewish Encyclopedia
• Passage from The Lady Upstairs showcasing Jacob Schiff's impact