Jewish financiers and industry, 1890–1914: england and Germany

  • Daniel Gutwein


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  1. 1.
    The two basic alternatives advanced in the framework of the scholarly debate were developed by Werner Sombart and Max Weber. On Sombart's and Weber's Jewish theory, see W. Sombart,The Jews and Modern Capitalism (London, 1913); M. Weber,The Protestant Ethics and the Spirit of Capitalism (New York, 1958), 117, 165, 180, 186–87, 191, 197, 222; M. Weber,General Economic History (New York, 1961), 151–52, 258–70. For a scholarly discussion of their Jewish theories, see T. Oelsner, “The Place of the Jews in Economic History as Viewed by German Scholars: A Critical-Comparative Analysis,”Leo Baeck Institute Year Book 7 (1962): 183–212; W. Mosse, “Judaism, Jews and Capitalism: Weber, Sombart and Beyond,”Leo Baeck Institute Year Book 24 (1979): 3–15; F. Raphael,Judaism et capitalism: Essai sur la controverse entre Max Weber et Werner Sombart (Paris, 1982); F. Raphel, “Max Weber and Ancient Judaism,”Leo Baeck Institute Year Book 18 (1973): 41–62; E. Redlich,Steeped in Two Cultures (New York, 1971), 94–5; M. Arkin, “Sombart, Modern Capitalism and Jewish Enterprise,” in M. Arkin,Aspects of Jewish Economic History (Philadelphia, 1975), 143–48; H. Leibschutz, “Max Weber's Historical Interpretation of Judaism,”Leo Baeck Institute Year Book 9 (1964): 41–68; P. Mendes-Flohr, “Werner Sombart's: the Jews and Modern Capitalism — An Analysis of its Ideological Premises,”Leo Baeck Institute Year Book 21 (1976): 87–107.Google Scholar
  2. 2.
    For this kind of argument, see F. Roderich-Stoletheim (alias Theodor Fritsch),The Riddle of the Jew's Success (Leipzig, 1927). See also, P. Pulzer,The Rise of Political Anti-Semitism in Germany (London, 1988), 138–41, 272–80.Google Scholar
  3. 3.
    E. Silberner,Western Socialism and the Jewish Question (Jerusalem, 1955), 133–80 (Hebrew); J. Carlebach,Karl Marx and the Radical Critique of Judaism (London, 1978), 187–369; D. Gutwein, “Marx on the Relationship between Jews and Capitalism: From Sombart to Weber,”Zion 55 (1990): 419–47 (Hebrew).Google Scholar
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    S. Almog, “Productivization, Proletarization and ‘Hebrew Labour’,” S. Almog et al. eds.,Transition and Change in Modern Jewish History (Jerusalem, 1987), 41–70 (Hebrew); D. Gutwein, “Proletarization and Politicization: Borochov and Trends in the Development of the Non-Proletarization Theory,”Shvut 14 (1990): 141–86 (Hebrew).Google Scholar
  6. 6.
    W. E. Mosse,Jews in the German Economy: the German-Jewish Economic Elite, 1820–1935 (Oxford, 1987).Google Scholar
  7. 7.
    For a summary of British “exceptionalism,” see G. Ingham,Capitalism Divided? The City and Industry in British Social Development (Houndmills and London, 1984), 1–39, and the notes and bibliography enclosed. For further discussion on the question of finance-capitalism in Britain, see P. L. Cottrell,Industrial Finance, 1830–1914: The Finance and Organisation of English Manufacturing Industry (London, 1980).Google Scholar
  8. 8.
    J. A. Schumpeter,Imperialism and Social Classes (New York, 1951), 106–7.Google Scholar
  9. 9.
    B. Semmel,Imperialism and Social Reform: English Social Imperial Thought, 1895–1914 (London, 1960), 145.Google Scholar
  10. 10.
    Ingham,Capitalism Divided?, 143. Cf. W. D. Rubinstein, “Wealth, Elites and Class Structure of Modern Britain,”Past and Present 76 (1977): 99, 112–24.Google Scholar
  11. 11.
    T. M. Endelman, “Communal Solidarity among Jewish Elite of Victorian London,”Victorian Studies 28 (1985): 521–25; and cf. T. M. Endelman,Radical Assimilation in English Jewish History, 1656–1945 (Bloomington, Indiana, 1990), 73–143.Google Scholar
  12. 12.
    C. Holmes,Anti-Semitism in British Society, 1876–1939 (New York, 1972), 63–88; S. G. Bayme, “Jewish Leadership and Anti-Semitism in Britain, 1898–1918” (Ph.D. diss., Columbia University, 1977), 63–198. Cf. P. Aldag (alias F. P. Kruger),Juden beherrschen England (Berlin, 1939); P. Aldag,Juden erobern England (Berlin, 1939).Google Scholar
  13. 13.
    W. D. Rubinstein, “Jews among Top British Wealth Holders, 1857–1969,”Jewish Social Studies 34 (1972): 73–84; W. D. Rubinstein, “The Jewish Economic Elite in Britain, 1815–1939,” in N. Gross, ed.,Jews in Economic Life (Jerusalem, 1985), 326–27 (Hebrew); Endelman, “Communal Solidarity,” 517. Cf. H. Pollins,Economic History of the Jews in England (London and Toronto, 1982), 107–14, 167–70.Google Scholar
  14. 14.
    W. D. Rubinstein,Men of Property: the Very Wealthy in Britain since the Industrial Revolution (London, 1981), 92.Google Scholar
  15. 15.
    C. Grunwald,Studies in the History of the German Jews in Global Banking (The Jewish Economic History Project, Hebrew University of Jerusalem, draft manuscript, n.d.), 94–106. Cf. C. C. Aronsfeld, “German Jews in Victorian England,”Leo Baeck Institute Year Book 7 (1962): 312–29.Google Scholar
  16. 16.
    S. D. Chapman,The Rise of Merchant Banking (London, 1984), 17, 44–56.Google Scholar
  17. 17.
    On the intra-City struggle see: J. Clapham,The Bank of England, II (Cambridge, 1944). 271–374; R.S. Sayers,The Bank of England, I (Cambridge, 1976), 1–53; M. De Cecco,Money and Empire (Totowa, N.J., 1975), 76–102, 127–202; W.T.G. King,History of the London Discount Market (London, 1936), 299–321; Ingham,Capitalism Divided?, 62–169, passim.Google Scholar
  18. 18.
    The special relationship between the merchant banks and the Bank of England resulted from a situation in which, in order to prevent conflicts of interest, managers of the joint-stock banks were prevented by law from serving as directors of the Bank. Thus, most of the members of the Bank's directorship were recruited from the ranks of the merchant bankers, who in English terms were not considered bankers. See P. Emden,Money Powers of Europe (London, 1938), 377–79; W. Bagehot, Lombard Street (London, 1922), 202–3; Y. Cassis,Les Banquiers de la City à l'Époque Edwardienne, 1890–1914 (Genève, 1984), 101–12; G.K. Young,Merchant Banking (London, 1971), 5–28.Google Scholar
  19. 19.
    On the Rothschilds stand on monetary policy and in the intra-City struggle, see D. Gutwein,The Divided Elite: Economics, Politics and Anglo-Jewry, 1882–1917 (Leiden, 1992), 99–124. On the business structure of the English Rothschilds, see Chapman,The Rise of Merchant Banking, 17–25, 171–72; R. Davis,The English Rothschilds (London, 1983), 21–50, 129–59.Google Scholar
  20. 20.
    On Schuster, see Schuster, “Schuster, sir Felix Otto,” and G. C. Simpson, “Schuster, Sir Arthur,” in L. G. Wickham Lagg, ed.,The Dictionary of National Biography, vol. 1931–1940 (Oxford, 1949), 791–94; Y. Cassis, “Schuster Felix,” in D.J. Jeremy, ed.,Dictionary of Business Biography 5 (London, 1985), 77–82.Google Scholar
  21. 21.
    Grunwald,German Jews in Global Banking, 95–6.Google Scholar
  22. 22.
    SeeNew Witness, 10 September 1914, 513;New Witness, 29 October 1914, 626. Cf. C. C. Aronsfeld, “Jewish Enemy Aliens in England During the First World War,”Jewish Social Studies 18 (1956): 275–83. Holmes,Anti-Semitism in British Society, 123–24.Google Scholar
  23. 23.
    In Schuster's view, “the bank ought never to supply the trader with working capital. I think it is bad for the trader. I think the banker ought to give temporary accommodation to tide the trader over the time when he is short until the time the money comes in again — for temporary purposes only. If a trader is not sufficiently provided with working capital and depends on the bank, there is sure to be trouble at some time.” U.S. National Monetary Commission,Interviews on the Banking and Currency Systems of England, France, Germany, Switzerland and Italy, Senate Doc. No. 405, 61st Cong., 2d sess., 1910, 47–8.Google Scholar
  24. 24.
    Cassis, “Schuster,” 79; Ingham,Capitalism Divided?, 273; Cottrell,Industrial Finance, 237–39.Google Scholar
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    De Cecco,Money and Empire, 140–44; and see below.Google Scholar
  26. 26.
    Regarding Schuster's positions, see F. Schuster, “Foreign Trade and the Money Market,”The Monthly Review 14 (1904): 1–33;The Bank of England and the State (Manchester, 1906); “Our Gold Reserves,”The Journal of the Institute of Bankers 28 (1907): 1–25; “A Letter to the Editor,”The Journal of the Institute of Bankers 28 (1907): 86; “Inaugural Address of the President,”The Journal of the Institute of Bankers 28 (1907): 559–80; “Inaugural Address of the President,”The Journal of the Institute of Bankers 29 (1908): 553–69.Google Scholar
  27. 27.
    Schuster, “Our Gold Reserves,” 9.Google Scholar
  28. 28.
    On Montagu and Samuel Montagu & Co., see L. H. Montagu,Samuel Montagu (London, 1913), in particular, 56–65; E. Green, “Montagu Samuel,” in D.J. Jeremy, ed.,Dictionary of Business Biography 14 (London, 1985), 298–301; P. Emden,Jews of Britain (London, 1943), 228–36; Gutwein,The Divided Elite, passim.Google Scholar
  29. 29.
    See, for example, Emden,Jews of Britain, 228;The Economist, 14 January 1911;Daily Telegraph, 13 January 1911;Lancaster Post, 13 January 1911.Google Scholar
  30. 30.
    My bookThe Divided Elite thoroughly discusses Montagu's views on economic policy in general and on monetary policy in particular. The discussion in this paper focuses only on certain aspects that are important to the issue of Montagu's relation to industry. The following survey is based on S. Montagu, “Dangers of Modern Finance,”Fortnightly Review 51 (1892): 322–36; S. Montagu,Free Trade & Fair Trade and the Causes of Bad Trade (London, 1886); S. Montagu, “Silver and Indian Fiance,”Forthnightly Review 52 (1892): 545–55; S. Montagu, “Plea for a British Dollar,”Murray's Magazine (February 1888): 191–97.Google Scholar
  31. 31.
    Montagu, “Dangers,” 322–25, 327–30;The Economist, 10 November 1888.Google Scholar
  32. 32.
    Cf. A. I. Bloomfield,Monetary Policy (New York, 1959), 23–4; R. H. I. Palgrave,Bank Rate and Money Market (London, 1903), v–ix, 196–7; J. M. Keynes,A Tract on Monetary Reform (London, 1929), v–vi.Google Scholar
  33. 33.
    Montagu, “Dangers,” 328–30;The Economist, 10 November 1888.Google Scholar
  34. 34.
    Cf. J. M. Keynes, ATreatise On Money, II (London, 1953), 170; Keynes,Monetary Reform, 9.Google Scholar
  35. 35.
    Montagu, “Dangers,” 330.Google Scholar
  36. 36.
    Gutwein,The Divided Elite, 66–99.Google Scholar
  37. 37.
    The Economist, 10 November 1888.Google Scholar
  38. 38.
    Montagu, “Dangers,” 330, 335–6; Clapham,The Bank of England, 342–45; R.S. Sayers,Bank of England Operations (London, 1936), 12–14; King,History of the London Discount Market, 308–10.Google Scholar
  39. 39.
    Montagu, “Dangers,” 332–35;The Economist, 7 May 1887;The Oracle, 4 April 1891;The Times, 9 September 1886, 22 April 1887; Gold and Silver Commission,First Report (P.P. 1887, xxiii): 83. On the reserve law, see K. W Dam,Rules of the Game (London, 1982), 26.Google Scholar
  40. 40.
    Montagu, “Dangers,” 329;The Manchester Guardian, 12 November 1888. Cf. Sayers,The Bank of England, 24–7; Clapham,The Bank of England, 301.Google Scholar
  41. 41.
    Montagu, “Dangers,” 328.Google Scholar
  42. 42.
    Gold and Silver Commission,First Report (P.P. 1887, xxii): 82–3; (P.P. 1887, xxiii): 79–85;The City Leader, 14 February 1891;The Oracle, 4 April 1891; and cf. Sayer,The Bank of England, 1.Google Scholar
  43. 43.
    Rubinstein, “Wealth, Elites and Class Structure,” 116–7; W. D. Rubinstein, “The Victorian Middle Class: Wealth, Occupation and Geography,”Economic History Review 30 (1977): 621–22; Chapman,The Rise of Merchant Banking, 98, 132; W. Ashworth,An Economic History of England (London, 1967), 168–69; A. Feaveryear,The Pound Sterling (London, 1963), 319–21.Google Scholar
  44. 44.
    The concensus between Schuster and Montagu was not limited to monetary questions; it was evident in party politics as well. After the 1885 split in the Liberal Party, Schuster and Montagu were among the few leading Citymen who remained loyal to Gladstonian Liberalism. In the 1906 general elections Schuster stood, unsuccessfully, as Liberal candidate for the City with the active support of Montagu who chaired one of his meetings,City Press, 6 January 1906.Google Scholar
  45. 45.
    Cf. the stand taken by Edward Holden, chairman of the Middland Bank, the other leader of the joint-stock banks' campaign against the Bank's monetary policy; De Cecco,Money and Empire, 101–2, 132–33, 144, 175–77, 218–21.Google Scholar

Copyright information

© Haifa University Press 1994

Authors and Affiliations

  • Daniel Gutwein
    • 1
  1. 1.University of HaifaIsrael

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