User:DGG/History of Jews in American banking

American Jews have played a major role in American finance or "Wall Street", both at investment banks and investment funds. 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. 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. Nevertheless, antisemitic elements often falsely targeted them as key players in a supposed Jewish cabal conspiring to dominate the world.

Since the late 20th century have Jews played a major role in the hedge fund industry, according to Zuckerman (2009) Thus SAC Capital Advisors, Soros Fund Management, Och-Ziff Capital Management, GLG Partners and Renaissance Technologies 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, Carlyle Group, Warburg Pincus, and KKR.

Colonial times
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. 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. The most prominent Jewish banker of the eighteenth century was Robert Morris, the key financier of the American Revolution.


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

Banking
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. Jonathan Knee postulates that Jews were forced to focus on the development of investment banks because they were excluded from the commercial banking sector. 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. 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).

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.

Jewish banking houses were instrumental to the process of capital formation in the United States in the late 19th and early 20th century. 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.

Populist targeting of Jews
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. 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.

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.

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.

1920s
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."

Bank of the United States
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.

1930s
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."

ADL

 * ADL rebukes Rush Limbaugh for comments relating Jews and banking.
 * ADL demands apology from Time Magazine