The Institutionalization of Affluence

T HE J EWISH ROLE in the post-Civil War economy transcended its palpable impact on merchandising and finance, even the manufacture and distribution of clothing and other dry goods. In the 1880s, Joseph Fels, born in Virginia of immigrant parents, pioneered the manufacture of “Naphtha” soap flakes, then nurtured Fels Naphtha into the largest soap manufacturer in the United States. Adolph Lewisohn started out in America in 1867 as a representative of his father's Hamburg-based bristle company. In 1871 he encountered a young man, Thomas A. Edison, who had invented a sound-recording contraption and insisted that voices eventually would be transmitted across continents by wire—copper wire. Young Lewisohn was persuaded. Within months he moved into the copper factoring business, and did well. Later yet, he and his brother Leonard purchased a mine of their own in Butte, Montana, for a mere $75,000. If the price was bargain-basement, it was due to the lack of transportation facilities from Butte to the railroad terminus in Helena. The brothers then pressed James J. Hill, chairman of the Great Northern Railway, to build a connecting branch to Butte. Hill, in turn, demanded a guaranteed minimum tonnage. For the Lewisohns, the risk was considerable. They took it—and won. By the early 1890s, the “mother” lode alone was turning out $35 million in annual profits. In 1898 the Lewisohns merged their holdings with the Rockefeller interests of Standard Oil to create the United Metals Selling Company, thereby controlling 55 percent of the copper produced in the United States. The Lewisohns were well satisfied.

The Rockefellers were not. Their goal was to create a vast cartel, the American Smelting & Refining Company, by effecting a merger of their own enterprise with twenty-three independent copper-mining firms. But to their dismay, one of the largest of the independents declined the offer. This was the Colorado Smelting & Refining Company, and it was owned by M. Guggenheim Sons. The eldest of a Jewish tailor's twelve children, young Meyer Guggenheim had arrived with his wife and children from Switzerland in 1856. Peddling in the Pennsylvania coal country, he noticed that housewives were complaining of burns incurred from the use of a highly caustic stove polish. Within the year, Guggenheim managed to devise and manufacture a noncaustic polish, then to bring over his brothers and sisters and put them to work in his flourishing polish company. Yet the family achieved its major financial breakthrough shortly after the Civil War, when Guggenheim risked an investment in several Colorado lead and silver mines. Eventually, after much travail and expense, the mines began to produce. Guggenheim became a multimillionaire. Forming a new partnership with his seven sons, he set about purchasing extensive additional mining properties. Once again, his judgment was uncannily astute. Most of his mines became producers. Subsequently, from its paneled boardroom in lower Manhattan, M. Guggenheim Sons built a conglomerate that included Colorado Smelting & Refining, Kennecott Copper, Nevada Consolidated, Esperanza Gold Mine (in Mexico), and Chile Copper. By 1898, Guggenheim enterprises were producing nearly half the world's copper supply.

This was the family whose Colorado Smelting & Refining Company was coveted by the Rockefeller-Lewisohn interests. Led by Daniel Guggenheim, the managing partner, the brothers fought back shrewdly and ruthlessly. They dumped their vast stocks of lead on the market below cost, forced staggering losses on American Smelting & Refining, then bought up huge blocks of the company's stock at bargain prices. By the time the smoke cleared, American Smelting & Refining was obliged to accept Daniel Guggenheim as its president and four other Guggenheim brothers as board members as the price of acquiring Guggenheim interests. In effect, American Smelting & Refining became a Guggenheim acquisition, rather than the other way around. Thereafter, the family's domain grew exponentially. By the twentieth century, it extended from the Yukon to Mexico, Bolivia, and Chile and from Latin America to Angola and the Congo. Silver, gold, copper, zinc, lead, and nitrates were among the metals and minerals extracted from distant Guggenheim mines and refined in Guggenheim smelters. By then, too, in the swashbuckling tradition of American empire-building, the Guggenheims had emerged as one of the five or six wealthiest families in the United States. For many decades they remained the nearest Jewish equivalent of the Rockefellers.

As they set about protecting their vast estates, moreover, these Jewish dynasts often found it as useful in the United States as in western Europe to marry among each other. Solomon Loeb and Abraham Kuhn, it is recalled, married each other's sisters, and Jacob Schiff became an instant partner by marrying Loeb's daughter. In turn, Felix Warburg, scion of a distinguished Hamburg banking family, assured himself a senior partnership in Kuhn, Loeb by marrying Schiff's daughter Frieda. Felix's brother Paul married Solomon Loeb's daughter Nina (from Loeb's second wife) and thus became his own brother's uncle. Another partner, Otto Kahn, married Adelaide Wolff, daughter of one of the firm's original investors. At Goldman, Sachs & Co., two Sachs boys married two Goldman daughters. Heidelbach, Ickelheimer & Co. was founded in 1876 after the marriage of Isaac Ickelheimer to Philip Heidelbach's daughter. Four of Hallgarten's partners—Bernhard Mainzer, Charles Hallgarten, Sigmund Neustadt, Casimir Stralem—also were tightly knit. Mainzer's sister married Charles Hallgarten. Neustadt's daughter married Stralem. Mayer Lehman's son Sigmund married his first cousin Emanuel's daughter Harriet. Just as Joseph Seligman and his wife had been first cousins, now Joseph's sister's son, Eugene Stettheimer, married Joseph's brother's Henry's daughter Grace. The Seligmans also had connections by marriage with the Lewisohns, Kuhns, Loebs, and Guggenheims. The marriage of Benjamin Guggenheim and Florette Seligman in 1894 united two of the pre-eminent American-Jewish dynasties.

As their wealth accumulated, the German-Jewish royalists and the remnant of the Sephardic “aristocrats” quit New York's older Jewish neighborhoods. Schiff and the other millionaires settled into palatial mansions on Fifth Avenue. Those who were comfortably affluent moved to the East Side between Thirtieth and Fifty-seventh streets, and to the West Side between Fifty-ninth and Ninety-sixth streets, where they occupied the luxurious brownstones then in fashion. (With the arrival of the East Europeans later, they would move even farther uptown.) Their elite club by then was the Harmonie, founded in 1852 as the Harmonie Gesellschaft. German remained its official language, and after 1871 the Kaiser's portrait hung in the hall. German remained the language in their homes, of course. Indeed, the Loebs, Goldmans, and Lehmans employed only German governesses, and when the children reached college age, they often were dispatched to universities in Germany. In the interim, the boys were sent to Dr. Julius Sachs's (English-language) Institute, the stern Old World school in which uniformed students were subjected to rigid training in classics and languages. At one point, Dr. Sachs was turning out Lehmans, Meyers, Goldmans, Loebs, Cullmans, Zinssers, and other scions who were ready for Harvard or Columbia or German universities.

Except for the Schiffs and Guggenheims, a world unto themselves, most of the solidly established German-Jewish haut monde enjoyed social intercourse with upper-class Gentile society. As fashion plates and arbiters of taste, they figured prominently in the rotogravure sections of the press. A Philadelphia newspaper gave a characteristic account of an 1880 Jewish high-society wedding:

The general press even described elegant Purim celebrations, one of which was attended by Mrs. Theodore Roosevelt.

Notwithstanding their success, the German-Jewish millionaires were by no means content simply to enjoy the luxuries and privileges of wealth. Nathan Straus of the Macy department-store family established a chain of free-milk stations for New York's poor children. Benjamin Altman, another department-store tycoon, left a multimillion-dollar art collection to the Metropolitan Museum. Adolph Lewisohn donated a stadium to the City College of New York and an endowment for free summer concerts. The Guggenheims were celebrated for their art and literary fellowships, their art museum, their support of aeronautical research. Otto Kahn, president of the Metropolitan Opera, covered the Met's deficits with annual gifts of at least one hundred thousand dollars. “I must atone for my wealth,” the Kuhn, Loeb partner once explained to a reporter. In San Francisco, Jewish munificence was even more overwhelming. It produced the city's best-known attractions, from the San Francisco Repertory Theater and Fleischhacker Pool to Sutro Forest, Steinhart Aquarium, Golden Gate Park, and the California Academy of Science. Effulgence of this scope reflected more than insecurity; it bespoke genuine gratitude to a nation that had given immigrant Jews a chance to come into their own, and more. TnaSr7pIITss0Lk8/OH/MjNvR2Yt+DKw71l4SsnC3xWl9Y7iUHnuXYQmaWoQskDy