Montefiore Home for Chronic Invalids , 1890 . Jacob Schiff served as Montefiore ’ s president from 1885 until his death in 1920 .
bid for Northern Pacific ’ s stock in the open market . It was one of the few times that Morgan was caught napping ( he was vacationing in France ), and the resulting bidders ’ war between Schiff and Morgan caused the price of Northern Pacific ’ s stock to increase in a matter of days to $ 1,000 per share , up from the $ 70 to $ 80 per share price range at which it had been trading just a few days earlier . In the end , the Morgan and Schiff forces entered into a pact that led to their shared control of the Northern Pacific .
For the remainder of their business lives , Morgan and Schiff continued their rivalries as railroad financiers . Later , they expanded their focus towards new industries that emerged in the early 20th century . Morgan & Co . played a leading role in the creation of behemoths such US Steel , Standard Oil , Edison Electric and International Harvester . At the same time , Kuhn , Loeb & Co . had its own , if slightly more modest , list of newly formed businesses . That list included Westinghouse Electric , US Rubber and the Western Union Telegraph Company .
Philanthropy
During the 50 or so years that Morgan and Schiff were raising capital for developing businesses , they were simultaneously providing a substantial amount of funding for not-for-profit and charitable causes . While both bankers made highly generous donations to well-known educational and cultural institutions , they “ invested ” much more heavily in endeavors that held special interest to them . Morgan , for instance , was an avid and life-long collector of antiquities and precious art and his very sizeable collections were often donated to a select group of art museums . Those museums included the Morgan Library and Museum that he connected to his Madison Avenue mansion . The library and museum have grown over the years and have become an important fixture in the fine arts community .
Schiff is best remembered as a promoter of Jewish causes and social work . The time between 1880 and 1920 became known as the “ Schiff Era ” of philanthropy in recognition of his innumerable gifts to Jewish causes and endeavors , including the Hebrew Union College at Cincinnati , the New York Seminary and the Semitic Museum at Harvard University . Though Schiff had not received a university degree , he was drawn to educational endeavors and made substantial brick-and-mortar gifts to Barnard College , Columbia University , Cornell University and Johns Hopkins University .
His most substantial efforts and funding , however , were for the benefit of all , irrespective of religious beliefs . The most notable of his many charities may have been the Montefiore Hospital ( now affiliated with the Albert Einstein Medical School ), which he called his “ labor of love .” Between 1885 and his death in 1920 , he served as Montefiore ’ s president . When he first came upon the “ hospital ” it was little more than a small home for chronic invalids . But with Schiff ’ s money-raising initiatives and personal dedication — he spent virtually every Sunday at the hospital — the “ home ” grew to become one of the leading hospitals in New York .
Another of his major charitable acts was the funding and development of the Henry Street Settlement in Manhattan ’ s Lower
East Side . During much of the time Schiff was at the helm of Kuhn , Loeb , the American economy was soaring , and the United States had transformed itself from a debtor nation to a creditor nation . But at the same time , tens of thousands of impoverished Eastern European immigrants were swarming into the country each year . A majority of them arrived in New York without working skills , family connections , language or money . The result was a rise in crime from the tenement housing and deplorable living conditions .
An idealistic young woman , Lillian Wald , observed the devastation and squalor of the tenements and chose to live among the tenants to provide at least minimal medical services through her Visiting Nurses Service . Taken by the social turmoil she had witnessed and the resources needed to overcome it , she contacted Schiff . He , too , was overcome by the miserable living conditions , and , in an effort to improve them , he purchased the building that would become a service location for destitute families : The Henry Street Settlement House . Over the years , Schiff was closely involved in the settlement and was its most effective fundraiser . Today the Henry Street facilities offer multi-mission programs in education , employment opportunities , health and wellness programs , senior services , sports and recreation .
The United States experienced rapid growth following the end of the Civil War . But many early projects , especially railroads , were plagued with a history of management incompetence , fraudulent activities , and , inevitably , bankruptcies . International investors , of course , were wary of providing capital to finance America ’ s unstable industrial growth . Fortunately , Morgan and Schiff , with their reputations for honesty and financial prowess , were able to re-establish credibility among overseas investors . It is no exaggeration to say that Morgan and Schiff had become America ’ s indispensable bankers .
Edward Morris is Professor Emeritus of Finance at Lindenwood University . His latest book is Wall Streeters : The Creators and Corruptors of American Finance ( Columbia Business School Publishing ). He can be reached at emorris @ lindenwood . edu or through his website : edwardlmorris . com .
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