Without lifting a gun, Jacob H. Schiff crushed the Czarist army and plunged its finest battleships down to a watery grave! Schiff, a direct descendant of the Maharam Schiff, was born in Frankfurt in 5607/1847. Although he studied at Rav Samson Raphael Hirsch’s religious school, it can hardly be said that he kept to his alma mater’s standards once he had left for the US at the age of eighteen. Instead, he devoted his energies to high fi nance and became managing director of Kuhn, Loeb & Co., one of the two most influential private international banking houses of the Western Hemisphere.

At the turn of the last century, he wielded his powerful influence against Czar Nicholas II after the eruption of the Russo-Japanese War in 5664/1904. It was largely thanks to Schiff’s efforts that the struggle ended in a crushing defeat over Russia, leading Russia’s Minister of Finance to declare in 5671/1911, “Our government will never forgive or forget what the Jew Schiff did to us… He was one of the most dangerous men we had against us abroad.”

BLACKMAIL

Schiff had an iron scruple when it came to lending money. He could not tolerate Czarist Russia’s inhuman persecution of its Jewish subjects and believed that no Jew should lend the Czar a cent. He harbored a withering contempt for the world of Jewish finance that lent Russia money during the 5650s/1890s with no strings attached. Jewish finance should have demanded better conditions for Russia’s Jews, he criticized. “But, instead, [it] closed its eye to make a despicable profit, and rendered service to the Russian government, selling her Jewish subjects for a few pieces of silver.”

Then came the opportunity of a lifetime. In February 5664/1904, Schiff invited a number of Jewish communal leaders to a meeting in his home. “Within 72 hours, war will break out between Japan and Russia,” he informed the gathering. “The question has been presented to me of undertaking a loan to Japan. I would like to get your views as to what effect my undertaking of this would have upon the Jewish people in Russia.” Whatever they told him, Schiff left the meeting convinced that his best course was to threaten Russia with financial blackmail. He would convince Russia that mistreating Jews came at disastrous cost. Through his widespread influence, he made it difficult for Russia to raise loans in the US at even three to four times the normal profit.

Desperate, Russia’s anti-Semitic Minister of the Interior, Vyacheslav von Plehve, let it be known via proxy that he was willing to confer with Schiff and formulate some kind of deal.

Schiff wrote back: “June 21, 1904… I must repeat… that the unwillingness of American money markets to take up Russian financing… are due purely to the disgust that is felt here against a system of government which permits such things as the recent Kishinev episode [a major pogrom] and the legal discrimination which is the order of the day in Russia…

“If his Excellency von Plehve really wants me to come… he must not say… that he is prepared to see me; he must say that he wishes to see me – and the invitation must be addressed to me directly. The only condition which I must lay down is this: I cannot enter a country which admits me only by special consideration and which is closed to all members of the Jewish faith except by special dispensation. If I am to come to Russia, the existing restriction against the issuing of passports for foreign Jews must first be abolished…”

The meeting never took place. When Russian Jews objected to Schiff’s strategy, well cognizant of the fact that it might backfire onto their heads, Schiff brushed their objections aside with a spurious argument: “It is simply one more case of the experience which Moses had in Egypt when he intervened for the Children of Israel and tried to stir them up, ‘but they hearkened not unto him, for anguish of spirit and for bondage (Shemos 6:9).’” Schiff also helped organize the distribution of revolutionary literature to Russian POWs held in Japan.

JAPANESE DESPERATION

Besides stymieing Russia’s finances, Schiff actively supported the Japanese cause. Baron Korekiyo Takahashi, the Japanese official in charge of selling war bonds, was desperate. New York bankers showed no interest in investing in Japan’s war and even in Britain, Japan’s official ally, the pickings were minimal.

In his diary, Takahashi complains how the fantastically wealthy Rothschild House refused to contribute a penny:

“The House of Rothschild cannot come in openly during the war. If they did, it will be known… to St. Petersburg. They cannot do anything that might inflict oppression on the Jews by the Russian Government.”

Then Takahashi struck gold at a London dinner. Who was sitting next to him but Jacob H. Schiff! Takahashi poured out his heart to the powerful financier, informing him that Japan needed at least five million pounds sterling (thirty million dollars) to continue her life-and-death struggle. And much more would be needed later on.

His appeal fell on willing ears. Only a few weeks earlier, Schiff had written to Rothschild claiming that the only hope for Russian Jews was for Russia to suffer an upheaval resulting from the Russo- Japanese War. Here, at last, was his golden opportunity to make this happen.

“A system of government… capable of such cruelties and outrages at home as well in foreign relations must be overhauled from the foundations up in the interests of the oppressed race, the Russian people, and the world at large… and taught an object lesson,” he told the Japanese statesman.

Schiff agreed to set US financial machinery in motion and raise the required funds. “[It was not] so much [because of] my father’s interest in Japan,” his daughter, Frieda, explained later, “but, rather, his hatred of Imperial Russia and its anti-Semitic policies that prompted him to take this great financial risk.” He would show Russia that the dollar was mightier than the sword.

JAPANESE WAR BONDS

As good as his word, Schiff proceeded to spur major US banks and insurance companies into action. After subscriptions to the Japanese bonds opened at 10:00am, May 12, 5664/1904, the bonds sold like wildfire, and even more so after Japan began overwhelming the Russian army on land and at sea.

People were almost breaking down doors to get their hands on Japanese bonds. The New York Times of March 1, 5665/1905, describes scenes of market madness.

“When the office force arrived for work, the lower corridor outside the doors of the banking house was jammed with people so that it was hardly possible to reach the elevators. Outside the portal, there was a double line of people extending across William Street and two or three doors up Pine Street.”

“An employee reported: ‘They fairly tore us to pieces… Until 11 or 12 o’clock, we had not time to breath.’”

Altogether, of the total of 410 million dollars raised by Japan to win its war, 180 million dollars was raised in the US. After Japan’s victory in 5665/1905, Schiff was granted diplomatic honors in Britain and Japan. The British king, Edward VII, invited him for a luncheon at Buckingham Palace. Then he was invited by the Japanese emperor to personally receive one of Japan’s highest honors, the Second Order of the Sacred Treasure.

“It is the first time the Emperor has invited a foreign private citizen to have a repast at the palace; heretofore, only foreign princes having been thus honored,” he boasted.

Schiff and a large entourage of relatives, friends and servants set off in four private rail coaches to San Francisco and sailed off to Japan by liner, pausing briefly en route to visit Queen Liliuokalani of Honolulu. Later, during a festive lunch at the Japanese Imperial Palace, Schiff surprised his royal hosts by lifting his glass in a toast, “To the Emperor, first in war, first in peace, first in the hearts of his countrymen.” In Japan, toasts were unknown.

He made a second mistake by casually remarking to Baron Takahashi’s fifteenyear- old daughter, Wakiko, “You must come and visit us in New York some time.” The Japanese baron understood that his daughter had been invited to stay with the Schiffs for three years! Schiff’s wife was less than delighted.

“Mother believes it somewhat of a responsibility we are undertaking in assuming charge of the responsibility of the girl and her education,” Schiff recorded at the time, “but we have decided to assume the responsibility.”

IN RETROSPECT

In retrospect, Schiff’s personal duel with the Czar of Russia probably caused more harm than good. The Jews were targeted as scapegoats for his defeat and suffered a series of violent pogroms. In addition, Schiff’s powerful influence reinforced the “Jewish International Conspiracy” myth, portrayed in the infamous “Protocols of the Elders of Zion” that the Czar’s secret police had disseminated in 5663/1903.

Although Schiff’s efforts during the Japanese war and later during World War I helped precipitate the Russian Revolution, this only led to a repression far worse than anything the Jews ever suffered under the Czars.

Years later, it seemed that Schiff’s private war might have a positive spinoff after all. During the 5690s/1930s, when Germany began deporting tens of thousands of Jews, the Japanese remembered the great power the Jew Schiff had wielded during their war and considered that it might be a good idea to have people like him living in Japan. This gave rise to the Fugu Plan that might have saved hundreds of thousands of Jews.

The Fugu (Puffer Fish) is regarded as a rare delicacy in Japan. The only problem is that its flesh contains deadly poison that has to be carefully prepared by an expert, leaving only enough poison to provide a pleasant tingling sensation; inexpertly prepared Fugu fish paralyzes and kills. In the same vein, the Japanese believed that although the Jews were a valuable asset, like the delicious Fugu fish, they needed to be watched carefully in order to keep them from putting their “Protocols of the Elders of Zion” plots into action. Plans were made to create autonomous Jewish settlements in the Far East. For various reasons, the Fugu Plan collapsed. In summation, there is little doubt that Schiff’s strong-arm tactics were an irresponsible, risky gamble in contravention to the navi’s advice in times of adversary: “Go, My nation, come into your rooms and close your doors after you. Hide for a little moment until anger passes” (Yeshayahu 26:20).

(Sources: 1) Best, Gary Dean. “Financing a Foreign War: Jacob H. Schiff and Japan, 1904-05.” American Jewish Historical Review no. 61 1971/72; 2) Birmingham, Stephen. Our Crowd: The Great Jewish Families of New York. New York: Harper & Row, 1967; 3) Cohen, Naomi Wiener. Jacob H. Schiff: a Study in American Jewish Leadership. Hanover, N.H.: Brandeis University Press, 1999; 4) Adler, Cyrus. Jacob H. Schiff. Philadelphia: Jewish Publication Society, 1947.)