Today, few people remember the name “Jacob Schiff” yet during the late 19th century and early 20th century, you would have to travel a long way to find someone who didn’t know his name.
A contemporary of bankers like J. P. Morgan, Jacob Schiff was the foremost Jewish banker on Wall Street at the time, and came to either own, or be a director of several major corporations such as Wells Fargo, Union Pacific Railroad and Equitable Life Assurance Society.
Early Life
The man history would remember as Jacob Schiff was born as Jakob Heinrich Schiff into a distinguished family of German Ashkenazi Jews in Frankfurt, in the German Confederation.
Jakob’s father, Moses Schiff, was an agent for the Rothschild family, first the family’s founder, Mayer Amschel Rothschild, and later his son, Amschel Mayer (the head of the family’s Frankfurt branch).
Several of his relatives had become famous in their own right, such as his uncle or his prescient ancestor (depending on the source) David Televe Schiff, who served as the Chief Rabbi of the United Kingdom from 1765 to 1791.
Another distinguished relative includes renowned Talmudic scholar and commentator, Meir Ben Jacob Schiff, who also became the first member of the Schiff family to settle in Frankfurt in 1370.
Much like other Jewish boys of the time, Jacob was well educated, receiving a world class education from several Jewish schools in and around Frankfurt and became an apprentice business broker and banker in 1861, at the age of only 14.
Working for his brother-in-law’s bank, a young Jacob learned the basics of the European banking trade and the skills that would one day make him one of the world’s foremost bankers.
In late July 1865, not long after the end of the American Civil War that April, Jacob Schiff left his native Germany for the US, not to escape poverty or because his family was there. No, he went there because it was an investment.
Continental Bank of New York
Arriving in New York on August 6, Jacob immediately engrained himself in the local German-Jewish community and began learning English, so he could better .
Kuhn, Loeb & Company
Russo-Japanese War
By 1904, relations between the Russian Empire and Japan had deteriorated rapidly. Over the last few decades, both nations had expanded further into the Far East, namely China and Korea, but were now encroaching on each other’s territory, wanting it all for themselves.
For Japan, it was about asserting their dominance over China, who’d long asserted their dominance over Japan. For Russia, it was about gaining a port they could use and that wouldn’t be easily blockaded like their ports on the Black Sea could.
Eventually, tensions over the Russian-built port of Port Arthur reached a tipping point, and the two countries went to war.
At the time, most in the West believed it would be an easy Japanese victory, as no Western Power had fallen to an Eastern one in centuries. And pretty much everyone though it would be a quick war and a resounding Russian victory.
But Jacob Schiff had other plans.
Angered at how Jews had been treated in Russia, namely the recent Kishinev Pogrom that had happened in 1903, Jacob’s agents sent a telegram to Takahashi Korekiyo, then the deputy governor of the Bank of Japan, ordering him to meet with Schiff in Paris.
Though initially hesitant, when Schiff revealed that he had only contacted them to spite Russia over their mistreatment of Jews, Korekiyo traveled to Paris, where Jacob extended the Japanese government loans of $200 million, or roughly half the money Japan needed for the war, through Kuhn, Loeb & Co.
Using this money, the Japanese were able to outspend their Russian counterparts, which in turn, led to their quick and decisive victory over the much larger Russian military.
For his efforts, Schiff was awarded numerous honors by the Japanese, including the Order of the Sacred Treasure and the Order of the Rising Sun. The latter of these awards, was awarded to him in person, and personally by Emperor Meiji in the Imperial Palace, becoming the first foreigner to ever receive an honor solely reserved for native-born Japanese people.
Due to his role in financing the Japanese, world leaders and monarchs were clawing at the opportunity to meet with the Jewish financier that broke Russia, hoping to recruit him in the event of a future war, and hoping to avoid getting on his bad side as Russia had done.
In 1904, Jacob traveled to Europe aboard oceanliner Kaiser Wilhelm II and had a private audience with King Edward VII, discussing in part Britain’s taking in of many Russian Jews fleeing the pogroms.
WWI
Later Life
Death
Forgotten Legacy
How Can I Replicate What Jacob Schiff Did?
What Can we Learn From Jacob Schiff?
Stand Firm
Give Back
It Doesn’t Matter What People Say About You
As one of the richest men of his time, and a Jew no less (in a time when antisemitism was still widespread), Jacob Schiff was the victim of numerous death threats and conspiracy theories, both during his life and long after he was gone.
These conspiracy theories include everything from using his wealth to prevent the US from entering WWI, to lobbying President Wilson to push for a quick end to the war (even without a US victory), to ensuring Upper Silesia had a referendum to decide which country it wanted to be a part of.
Cartoons published in American newspapers also depicted Schiff as a robber baron who didn’t steal just from the people, but from the government too – especially at times it could least afford it.
Yet Jacob didn’t let this stop him. But it actually appears he did the opposite: he let it fuel him. With every new conspiracy theory or cartoon published about him, Jacob expanded his business empire and increased his donations to charities that resonated with him.
Make Powerful Friends (And Enemies)
Has the story of Jacob Schiff inspired you? Tell me in the comments!
