The Jews in America Trilogy (53 page)

It was April, 1918, and the North Atlantic was full of U-boats. Nevertheless, he sailed off for England, not at all sure how he would be received there. Renouncing his British citizenship had, as he expected, been criticized, and also the British had not forgotten Jacob Schiff's stand on the Allied loan. As recently as February of that year—nearly four years after Lord Reading's visit—the London
Times
had mentioned Schiff adversely, quoting him as having told a
Times
correspondent that he was “willing to help the Kaiser rather than the Allies.” As Kahn sailed off for Europe, however, his anti-Kaiser position was helped considerably by a published report that Germany now considered Otto Kahn the number one enemy of the state. All submarines in the Atlantic, it was said, had received instructions to torpedo Kahn's boat, and to give this project top priority. The Kaiser was supposed to have said, “We would rather eliminate him than either the President or Pershing.”
*

Though Kahn later confessed to being “frightened” during the crossing,
the voyage took place without incident, and Kahn was received respectfully in England, where he was known for St. Dunstan's, and where he was described as an example of “changed sentiment of Germans in the United States.” He was a far greater success in France, where they remembered Otto Kahn for his work to place French operas in the repertory of the Metropolitan, and they gave him a hero's welcome. Speaking in French, announcing that he would give 10,000 francs to the French Society of Dramatic Writers, he called France “
la Terre Sainte de l'humanité,
” and the deafening applause is said to have continued for eighty minutes. He had dinner with Clemenceau, who called him “the greatest living American,” and then, though the battle of the Aisne was raging, he paid a visit to the front and dined with General Pershing in a château which had been bombarded by shellfire an hour earlier.
*
He then went on to Spain and, perhaps, the most important of his contributions to the Allied war effort.

In Madrid, after conferring with King Alfonso XIII, whom Kahn described as “very intelligent, exceedingly well posted and one of the most attractive men I have ever met,” Kahn happened to overhear, at a diplomatic reception, a conversation between “a pair of swarthy fellows.”

The men, speaking in Spanish, apparently assumed that Kahn, an American, could not understand what they were saying. They were wrong. Kahn found some of their remarks highly interesting. There was, one of them hinted, to be an uprising very soon of the Spartacus League in Brussels. The Spartacus League, sometimes called the German Leninists, eventually became the foundation of the German Communist party, and during the war the League had functioned as an underground group to stir up internal dissent and to undermine German unity. (Later, the League's chief, Karl Liebknecht, received a prison sentence for his and-Junker activities during the war.)

Kahn was immediately aware of how important news of an underground revolution could be to the Allies. Quivering with the excitement of international intrigue, he hurried to the British Ambassador in Madrid. The Ambassador listened gravely to what Kahn had to say, and that evening placed Kahn's report in the diplomatic pouch to London. In London it went directly to Downing Street and into the hands of Lloyd George, who, reportedly, “could scarcely believe what he read. But knowing Kahn's reputation for scrupulous accuracy, he investigated the report and found it true.”

Kahn's report persuaded the Allied strategists to move ahead strongly. “He did us great service by reporting on this affair,” one of Lloyd George's ministers said later, and it has even been claimed that the final armistice would have been delayed by as much as six months if it hadn't been for the efforts of Secret Agent Otto Kahn.

By the end of the war Otto Kahn was being called “The King of New York.” And, in the process, the sour reputation of Kuhn, Loeb & Company at the war's outset had sweetened considerably.

*
In 1910 Paul Warburg and Nelson Aldrich together drafted the Aldrich Bill, the first to include central banking as an element of banking reform. Paul Warburg had, meanwhile, set up the National Citizens' League for Promotion of a Sound Banking System. The Federal Reserve Board Act, largely Warburg-designed, was passed in 1913, but the System was not operative until 1915. Warburg resigned from Kuhn, Loeb in 1917 to serve on the Board.

*
It was a subtle way to continue to hammer the point, with Americans and Britishers, that Schiff was pro-German—though he never was.

*
It is wise to remember that Kahn, at this point, had employed the publicist Ivy Lee to handle his public relations. Though very possibly true, this story smacks of press agentry.

*
In World War I bombardments often stopped conveniently for lunch.

41

CALAMITIES AND SOLUTIONS

After the reaction to his war loan stand, Jacob Schiff had little more to say about the war with Germany. One of his rare public statements about the war was made in the summer of 1918, just a few months before the Armistice, when he said, “Though I left Germany as a very young man and adopted this as my country fifty-three years ago, I believe I understand Prussian aspirations and Hohenzollern methods sufficiently to confirm my belief in the most forcible necessity for winning this war completely.” Throughout the war he had concentrated on another, and to him equally crucial, matter.

He had always believed in the principle of
Zedakah
, the charity which literally means “justice.” During his youth in Germany, he recalled, “Kindliness was the keynote of the household and from the first ten-pfennig piece that was received as an allowance it was made our duty to put one-tenth aside for charity, according to the old Jewish tradition.” He had continued this 10 percent tithing system throughout his life and, though he was called one of New York's foremost philanthropists, he insisted that only what he had given above and beyond this figure could be considered “philanthropy.” He once startled a well-meaning woman who congratulated him on a particularly large gift by saying, somewhat abruptly, “That wasn't my
money.” He meant, of course, that the gift came from the one-tenth of his income that he felt
had
to be given away.

He had an individualistic approach to giving that would have dismayed a modern foundation executive. In addition to having invented the “matching gift” system, he also believed that a man's giving should be done in his lifetime and, most important, under his personal supervision. In his spare time, he visited the Lower East Side looking for worthy “cases” among immigrants. He personally headed his pet project, Montefiore Hospital—originally founded for Jewish “incurables,” and later broadened at his insistence—and hired the staff as well as paid regular visits to all the patients. To raise money, he once organized and headed a benefit bazaar in Central Park which netted $160,000 for the hospital—much more than the most glittering charity ball can earn today. He also believed that self-help was an essential part of any charity, and frequently wrote personal letters to get immigrants jobs. For one young man who wanted to be a merchant he purchased a candy store; for a man who had cut hair in Europe he bought a barbershop. He rented any number of newsstands, and installed his cases behind them. He occasionally hired men directly into Kuhn, Loeb & Company, and his son-in-law, Felix Warburg, adopted his habit of hiring promising youngsters. (He once hired the hat boy at Savarin's restaurant and made him an office boy; he was George W. Bovenizer, later to become one of the firm's most important partners. Felix also hired his wife's milliner's son.) With J. P. Morgan, Seth Low, and James Speyer, Schiff developed a plan to found “a pawn shop on humanitarian principles,” which became the Provident Loan Society. Each founder contributed $5,000—and Schiff assessed each Kuhn, Loeb partner in that amount also—and the Society started with capital of $100,000. Soon, it was loaning out money at the rate of $34 million a year.

In 1912 the newspapers were full of gloomy talk about trusts and everyone was muttering about the abuses of great wealth. The
New York Times
, however, published an article about what it called “the New York public service trust,” and the men whose charities most benefited the city. “It is impossible to consider,” said the
Times
, “what New York's so-called public activities would do without these men. As we name things ‘trusts,' here we have one—it is a trust of public spirit.” Heading this list of leaders were Joseph Seligman's son, Isaac Newton Seligman, Felix Warburg, and Jacob Schiff. Conspicuously absent from the list was the name of Rockefeller.

The
Times
article distressed Schiff, who believed in the Talmudic
principle that twice blessed is he who gives in secret. Though he gave a building to the Jewish Theological Seminary; two buildings to the Young Men's Hebrew Association; a social hall to Barnard College; the Semitic Museum building, and much of its contents, to Harvard; a large endowment to Frankfurt University in Germany; and the building which houses the Israel Institute of Technology in Haifa, he would never permit his name to be attached to any of these structures. His single exception to this rule was the Schiff Pavilion at his Montefiore Hospital. He would never discuss the size of his gifts and rebuffed reporters who asked him about his philanthropies. Because of Schiff's secrecy, the exact total amount of his giving is now impossible to calculate. It has been estimated at between $50 and $100 million.

In 1906 a small group of the most important men in the German Jewish banking crowd had met at Jacob Schiff's house to discuss a matter of some urgency. Their worry was anti-Semitism. The Dreyfus case had not yet been settled, and the coals from the Kishinev pogroms had not cooled. To Schiff, it had begun to seem as though all the gains which Jews had made over the past hundred years were being threatened and might soon be lost. Out of the meeting came the American Jewish Committee, an organization designed to protect the rights and better the condition of Jews throughout the world. In its way, it was something of an innovation, for the AJC proposed to combine traditional Jewish communal giving with the techniques of such American overseas philanthropies as the Red Cross.

The AJC was an organization sponsored, at the outset, by a mere handful of extremely rich men. It was really all in the family and “in the crowd,” and it soon became clear that a less loosely structured, larger, and more formal and all-encompassing sort of organization would be required to do the task the AJC had set for itself. As 1914—“the comma in the twentieth century”—approached, the relief of Jews in Eastern Europe became a far more overpowering problem than that of Jews on the Lower East Side. In Russia and Rumania it had become clear government policy to force Jews to emigrate, but where would they go? The slums of New York and London were overcrowded and seemed incapable of holding any more, while millions clamored to be received. In the salons of Paris, Berlin, and Vienna, anti-Semitic chatter was becoming fashionable, and even certain politicians in Washington and London were making racist allusions with the caricature of the poor Eastern European Jew who had found his way to the Lower East Side or to Whitechapel as their target. Implications of what the Jews would have to face throughout the next half-century
were beginning to dawn as, across the Continent of Europe, the lights began to go out.

During the war between 600,000 and 700,000 Jews fled eastward out of Poland and the Baltic countries, and another 100,000 from Galicia and Bukovina. Others escaped westward—half a million to Austria, perhaps 100,000 into Germany. The migrations were terrified and erratic, for no one knew where he was going or whether, or for how long, he would be allowed to stay. Some thirty thousand Jewish refugees camped, without shelter, in a Russian forest. When Turkey entered the war on the side of Germany, there was suddenly a desperate situation for Jewish communities in Palestine. Many Jews in the Holy Land had escaped from Czarist Russia, and they were now suspected as enemy aliens. At the end of August, 1914, Henry Morgenthau, who was United States Ambassador to Turkey, cabled Jacob Schiff asking for $50,000 in immediate aid. The American Jewish Committee contributed $25,000 of this figure, Schiff personally gave $12,500, and the Provisional Zionist Committee another $12,500. But as the war spread and hopes for an early peace vanished, it was obvious to Schiff that the relief work to be done in Europe was beyond the scope of the AJC.

American Jews were, of course, divided. The AJC was merely another symbol of that division. In a crisis that faced all the Jews, one could not have a factionalized solution. All Jews in America would have somehow to join in a consolidated effort.

There were, at the time, hundreds of Jewish charitable organizations in the United States. In October, 1914, Schiff asked representatives of forty of the largest to meet with his AJC. At that meeting, a committee consisting of Oscar S. Straus, Julian W. Mack, Louis D. Brandeis, Harry Fischel, and Meyer London, who “commanded the respect of every element,” was asked to select one hundred leading American Jews to be the American Jewish Relief Committee. “All Jews,” Schiff announced solemnly, “of every shade of thought, irrespective of the land of their birth, are admonished to contribute with the utmost generosity.” Louis Marshall was to be president of this new organization, and Jacob Schiff the treasurer. Schiff, however, asked that this honor be given to his son-in-law, Felix Warburg.

Working closely with Schiff, Felix decided that the treasurer's chief job would be to set up a disbursing agency through which American funds could be sent on to Europe. For this purpose—which, at first, seemed simple but which later on became so staggeringly important that it completely eclipsed its parent organization—Felix held his first
meeting of the Joint Distribution Committee of American Funds for the Relief of Jewish War Sufferers on November 27, 1914. This was the famous Joint Distribution Committee which, by the end of the war, was distributing an income of as much as $16.4 million a year.