Manfred and Anne Lehmann Foundation

The History of Jewish Banking

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The History of Jewish Banking Jewish bankers have been prominent throughout our history. It is fascinating to study their origin and development, because they played an important role in Jewish history as a whole. There is no doubt that they constituted a highly disproportionate segment of the banking world.

In my opinion, there must have been something basic in Judaism that formed the basis for this excellence. I would say that the Torah, before any other code or law, set down strict rules for commercial honesty and public-mindedness, so that a Jewish banker was always more trusted than other bankers. The biblical laws commanding honest and reliable weights and measurements, regulating interest-taking, and governing the handling of pawns, all set the basis for honest money lending. In the Talmud, laws controlling honest commerce and money lending abound. It is therefore not surprising that the basic Hebrew word for moneylender, "shulchani" ("money changer") -- found in the Mishnah -- ultimately took the meaning "banker."

Similarly, the predominance of Jews in the medical profession -- 45 percent of all Nobel Prize winners in medicine have been Jews! -- can, in my opinion, be traced to the unprecedented care for human health expressed in the Torah and in subsequent Jewish laws. No other nation ever cared so much for the physical well-being of each and every one of its members. Such attitudes and inclinations are carried over for hundreds of generations -- either through education and personal example of elders, or by way of genes.

Early Banking

In the Tenach we find several transactions involving payment of money, such as Abraham's purchase of the Machpelah and Jeremiah's purchase of land in his native city. But there must also have been doing a thriving money lending business, since as soon as the Jews were exiled to Babylonia we surprisingly encounter at least two full-fledged Jewish banks operating there -- the banking houses of Murashu and Egibi. Many cuneiform tablets evidencing their money lending transactions and bearing Jewish names have been preserved. The "banking" skill of these Jews must have been preceded by generations of experience and tradition.

No wonder then that Jews were sought out by their rulers in the early days of exile in Europe. The Roman armies marching north in Europe, along the Rhine river, encouraged Jewish money lenders and traders to accompany them. They were the founders of the earliest Ashkenzic communities, such as Mainz, Speyer, Worms, and Trier.

Before them, Jews in partnership with the Phoenicians had founded trading settlements along the Western Mediterranean. The outlook of Jewish businessmen and moneylenders, from the beginning, was international. The Diaspora itself offered the advantage of families having members in all corners of the world -- Jews who could always trust each other. The worldwide trust remained the hallmark of Jewish bankers throughout the ages.

Jewish Banking in Germany

While Jews carried on money transactions in most countries of the Diaspora, their long-range success was most remarkable in Germany. In the documents found in the Cairo Geniza, covering the 11th to 13th centuries, we find adequate testimony of Jews carrying on commerce from one end of the then known world to the other -- from Spain to India. But these communities -- after flourishing for some centuries, died out. German Jewry, however, existed for over 1,000 years.

In the Middle Ages, Jews were often restricted by law to money lending and tax collecting. Even a great man such as Rabbeinu Tam was a "banker" in the medieval sense -- even operating his "bank" during Chol Hamoed.

German Jews came to their full bloom in the years shortly after the 30-year war, when the Germany of the monolithic "Holy Roman Empire" fell into three small duchies and municipalities, each with financial worries and needs for financing. The local dukes and princes would reach into the ghettos of Germany to select skilled Jews with proven ability to manipulate money. Some of these rulers had insatiable appetites for money -- to be used on their lavish courts, their military campaigns and repayment of old debts. This need created the position of the Court Jew, occupied by an exceptionally fine class of Jews who excelled in finance but also in their concern for their suffering and oppressed brethren. Some of the finest Court Jews were Oppenheim, Wertheirmer of Vienna and Behrend Lehmann of Halberstadt in the 17th century. Without them, German Judaism would have died out.

They also laid the foundation for the great banking families of the 18th century. As an example, Behrend Lehmann who had achieved the position of virtual Minister of Finance to the King of Saxonia, established far-flung branches of his business with sons and nephews manning offices in various European cities. Lehmann's example was copied by the Rothschilds a few decades after his death. By distributing five sons -- to Vienna, Paris, London, Naples and Frankfurt -- the founder of the dynasty, Moshe Amsehl Rothschild, established one of the most powerful financial empires the Jews ever possessed. But the Rothschilds were not alone in achieving banking greatness.

Here is a partial list of Jewish bankers and the dates when they were founded: 1750 N.M. Bamberger, Berlin; 1764 Gebrueder Veit, Berlin; 1795 Joseph Mendelshn Berlin; 1798 M.M. Warburg, Hamburg; 1803 S. Bleichroder, Berlin; 1811 Leopold Seligman, Cologne; 1815 A.S. Goldshmidt, Coblenz.

As Germany was unified into an empire in 1871, the need for large scale loans grew. Kaiser Wilhelm and Count Bismarck founded their administration almost entirely on the financial help rendered by their Jewish banker, Bleichroeder.

In 1856, when the Russian Czar needed a large loan, Jewish bankers helped him out without regard to the oppression which their Jewish brethren suffered under him. Only one Jewish banker, Jacob I. Schiff -- whose descendents founded the American private bank Kuh, Loeb & Co. -- refused to lend his money to a Russian czar!

Jewish Bankers in England

English Jews, before their expulsion in 1290, had been outstanding bankers, who helped their sovereigns. Such Jews as Aaron of Lincoln and Aaron of York have gone into history as exemplary bankers. But all this did not help such after some terrible pogroms, all English Jews were expelled. It was only 400 years later, under Oliver Cromwell, that Jews were re-admitted to England, after the famous Dutch-Portuguese philosopher Menasse ben Israel had lobbied in London. Since the early arrivals were of Portuguese ancestry, with outstanding commercial and banking traditions, it did not take long before important Jewish banking firms were established in London, after moving there from Amsterdam, such as the de Costa, de Medinas, Lopez and Salvador families. Many became stock brokers. Later famous stockbrokers were the Montefiores, David Ricardo and Benjamin Gompertz from Amsterdam. When Ashkenazic Jews emigrated to England, some of them laid the foundations to well-known British banks. David Solomons, whose ancestors had come to England in 1689 became London's first Jewish mayor and was a founder of the Westminster Bank, today one of England's leading banks. Another early Jewish banking house was that of Mocatta and Goldsmid founded in 1782 and still flourishing today as bullion brokers.

The banking house of Samuel Montegue and Co. was established in 1863 and is still and important factor in London's city. Other banks, which are not clearly identified as of Jewish origin, are the Hambro Bank, of Danish-Jewish origins, and the Wagg banking firms, today known as J. Henry Schroder, Wagg and Co. goes back to the famous Samuel family which produced Herbert Samuel, the first High Commissioner in the British Mandate of Palestine after World War I.

Dominating the field of English Jewish bankers, are the Rothschilds. When Nathan M. Rothschild came form Frankfurt to England, he started a dynasty which until this day is outstanding in financial and Jewish life. His brother-in-law Sir Moses Montefiore, although the legendary benefactors of Jews everywhere and founder of modern Israel, never failed to attend board meetings of his companies, especially the Alliance Insurance company which he and his brothers-in-law had founded in 1824 and which still today is a powerful insurance company.

Jewish bankers played a prominent role in the United States, France, Belgium, Holland, Vienna, Italy, Scandinavia, Russia, Egypt, Turkey, South Africa and, finally, today in Israel. Many of them were interlocked through marriage and common family origins. They gave their Jewish communities much prestige and support.

The Holocaust gave sadly a fatal blow to Jewish banks in the lands under Hitler. Individual bankers were heroic in their fight to help their fellow Jews, especially the case of Max Warburgn of Hamburg comes to mind. Most of the Jewish banks ravaged by Hitler have been rebuilt and are again flourishing. We must remember the Jewish banks of the past and relations of the past with reverence and respect. When Jewish communities were powerless, without political or military forces to defend them, many a staunch Jewish banker stood up for them and saved entire communities. If we take a look at the thousands of years of Jewish banking business, we realize with pride that their success can be laid at the feet of Mt. Sinai where their ancestors stood and learnt the laws of honesty and reliability in business.

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