THE JEWS AND MODERN CAPITALISM

THE JEWS AND MODERN CAPITALISM

By WERNER SOMBART

PROFESSOR AT THE HANDELSHOCHSCHULE IN BERLIN; FORMERLY PROFESSOR OF ECONOMICS AT THE UNIVERSITY OF BRESLAW

NEW YORK

E. P. DUTTON & COMPANY

31 WEST TWENTY-THIRD STREET

1915

CONTENTS

TRANSLATOR'S INTRODUCTORY NOTE, p. xv.

PART I

THE CONTRIBUTION OF THE JEWS TO MODERN ECONOMIC LIFE

CHAPTER I

INTRODUCTORY

Statistic and genetic methods, p. 3. Advantages and disadvantages of the first, pp. 3-4. The need of supplementing it by the second, p. 4. How the genetic method is to be applied, p. 5. Considerations to be borne in mind in regard to the term "Jew," p. 5. Jewish influence may appear larger than it actually was, p. 6. Reasons for this, p. 7. Lack of exact information, p. 7. Baptized Jews, p. 7. Jewesses, p. 8. Crypto-Jews, p. 8. "Unofficial" Jewish influence, p. 9.

CHAPTER II

THE SHIFTING OF THE CENTRE OF ECONOMIC LIFE SINCE THE SIXTEENTH CENTURY

CHAPTER III

THE QUICKENING OF INTERNATIONAL TRADE

Jewish influence quantitatively considered, p. 22, in England, p. 22, at the Leipzig fairs, p. 23, in the Levant trade, p. 24. The commodities in which they dealt, p. 25. Their trading on a large scale, p. 25. They introduced new commodities, p. 26. The variety of Jewish trade, p. 26. Their predominating influence in gold-producing countries, p. 27.

CHAPTER IV

THE FOUNDATION OF MODERN COLONIES

Jews keen colonial settlers, p. 28, in East Indies, p. 29, in Australia and South Africa, p. 29, in America, p. 30. How America was bound up with the Jews, p. 30. Jews and the discovery of America, p. 31. Jewish settlers there, p. 32, in the West Indies and in South America, p. 32, in the United States, p. 37. America's debt to the Jews, p. 43. Jewish immigration into America, p. 45.

THE FOUNDATION OF THE MODERN STATE

The Jews and the founders of modern States, p. 49. Similarity of interests, p. 50. What the Jews did for the modern State, p. 51.

(1) The Jess as Purveyors: in England, p. 51; in France, p. 51; in Germany, p. 52; in Anstria, p. 52.

(2) The Jews as Finenciers: in Holland, p. 54; in England, p. 54;

in France, p. 56; in Germany and Austria, p. 57; "Court Jews," p. 57; in the United States, p. 59.

CHAPTER VI

THE PREDOMINANCE OF COMMERCE IN ECONOMIC LIFE

Influence of Stock Exchange, p. 61; Securities—their rise, dealings in and creation of, p. 61.

• (2) Buying and Selling Securities: Necessity for a legal code regulating exchange, p. 80; Jewish influence in the formation of such a code, p. 81; as in the establishment of a market for securities, p. 82. History of Stock Exchange activities, p. 83; Jews and their relation to these activities, p. 83; in Venice and Amsterdam, p. 83; in Frankfort, Hamburg, and Bordeaux, p. 84. Where Stock Exchanges first arose, p. 85; assumption—Jews were prominent speculators, p. 85; facts in support of the assumption, p. 86; predominance of Jews on the London Stock Exchange, p. 88; "Jews Walk" in 'Change Alley, p. 88; wealthy Jews in England in 17th and 18th centuries, p. 89. Stock-jobbing as a specialized profession introduced into the London Stock Exchange by Jews, p. 90; proof of this, p. 90. London owes to the Jews its position as the chief financial centre of the world, p. 91. Jews and the Stock Exchange in Paris, p. 92; in Frankfort, Hamburg, and Berlin, p. 93. Contemporary opinion concerning the Stock Exchange in the 18th century, p. 95; Postlethwayt, p. 95; Hume and Adam Smith, p. 96; change in public opinion, p. 97. Hence beginning of a new period in the history of the Stock Exchange, p. 97. Some characteristics of the new state of affairs, p. 98; increase in the volume of securities, p. 98; Jews and the new state of affairs, p. 99. The Rothschilds, p. 99; their influence, p. 99.

industrial undertakers, p. 111.

CHAPTER VII

THE GROWTH OF A CAPITALISTIC POINT OF VIEW IN ECONOMIC LIFE

The outer structure of modern economic life owes much to Jews, p. 115; so does its inner spirit, p. 115. Illustrations from contemporary opinion, p. 115. Jews regarded as "Interlopers," p. 116. Instances from Germany, p. 116; England (Sir Josiah Child), p. 117; France, p. 118; Sweden and Poland, p. 118. Why were the Jews such keen competitors? p. 118. Contemporary opinion offered various reasons, p. 118. Real reason: Jews were the pioneers of a new economic order, p. 119. The economic outlook of the 17th and 18th centuries, p. 120; regulated economic activities, p. 121; no competition, p. 122; no advertisement, p. 122; just price, p. 126. Attitude of the Jews to this outlook, p. 127; they were not the only "interlopers," p. 128; what distinguished the Jews from the others, p. 129; the Jew a business man, p. 131; illustration from the Memoirs of Glückel von Hameln, p. 131; from non-Jewish sources, p. 133; including popular proverbs, p. 134. Speific charges against Jewish traders all characteristic of modern commerce: their enterprise, p. 136; their attempts to catch customers, p. 137; their utilization of advertisements, p. 140; their cutting of prices, p. 141. Explanations for the last, p. 143; allegation that Jews lowered quality of goods, p. 145; in reality Jews adopted principle of substitution, p. 146. Jews sold more cheaply than others because they were content with lesser profits, p. 148. Small profits, quick returns, p. 150. Instances of Jewish commercial enterprise: the waste products business, p. 151; the general store, p. 151; payment by instalments, p. 152; and catering, p. 152. The Jewish outlook was the modern outlook, p. 153. How may it be accounted for it p. 153.

PART II

THE APTITUDE OF THE JEWS FOR MODERN CAPITALISM

CHAPTER VIII

THE PROBLEM

Need for clear formulation of the question to be solved, p. 157. The Jewish aptitude—for what? p. 157; how did this aptitude develop? p. 157. The answer to the first question is Capitalism, p. 158. Previous considerations of the question somewhat vague, p. 158. The answer to the second question may refer to either "subjective" or "objective" circumstances, p. 158.

WHAT IS A CAPITALIST UNDERTAKER

Conception of capitalism, p. 160; profit the mainspring of the system, p. 160; economic rationalism, p. 160. The functions of the capitalistic undertaker, p. 161; his twofold nature, p. 162; he is an undertaker—a man with an object in view, p. 162; he is also a trader, p. 162. Analysis of the conception "undertaker," p. 163. Analysis of that of "trader," p. 165.

CHAPTER X

THE OBJECTIVE CIRCUMSTANCES IN THE JEWISH APTITUDE FOR MODERN CAPITALISM

These circumstances looked at in a fourfold aspect, p. 169.

• (1) Jewish Dispersion over a wide area: The Jews a scattered people, p. 170. Branches of one family in different centres, p. 170; hence their "great correspondence," p. 171. The Spectator quoted, p. 172; their linguistic ability, p. 173; consequences of this gift, p. 174; consequence of their "great correspondence," p. 175.

• (2) The Jews as Aliens: in what sense true? p. 175. Advantages of this position, p. 176. True also in the sense that Jews looked upon

• (3) Jews as Semi-citizens: Subject to restrictions, p. 178; economic effects slight, p. 178. Some instances of restrictions, p. 178; case of Prussia most instructive, p. 179. The restrictions to a large extent a dead letter, p. 181. Real restrictions: their exclusion from gilds and from public life, p. 181. Economic consequences of the latter, p. 182.

CHAPTER XI

THE SIGNIFICANCE OF THE JEWISH RELIGION IN ECONOMIC LIFE

(1) The Importance of Religion for the Jewish People: Religion and economic life, p. 191. The Jewish religion: some characteristics, p. 192. Its comprehensive influence, p. 192; it is known of all, p. 192. Jews a most "God-fearing" people, p. 193. Obedience to religious precepts found among all classes of Jews, p. 195.

(2) The Sources of the Jewish Religion: The Bible, the Talmud, and the Codes, p. 197. Realistic [critical] attitude towards the sources, p. 198. The attitude of the orthodox Jew, p. 201. Significance of the sources for practical life, p. 202. To what extent is the Talmud a

norm? p. 203. Influence of the Codes, p. 205.

(3) The Fundamental Ideas of the Jewish Religion: Judaism and Capitalism, p. 205. Judaism a product of intellect, p. 206; has not mysteries, p. 207; does not appeal to the sensuous, p. 208; rests on a contract between God and Israel, p. 209. Illustrations of the last, p. 210. The quantitative conception of sin, p. 211. In theological literature money is regarded as a means to an end, p. 212. The Talmudic doctors are acquainted with business, p. 213.

ectivities, p. 221.

• (5) The Rationalization of Life: The duty of the pious man is to be holy and to obey God's commandments, p. 222. Holiness degenerated into Formalism, p. 223. Holiness understood to mean the Rationalization of Life, p. 225. The very existence of the law has an influence on man, p. 226. What was the purpose of its enactments? p. 227. Rationalization of the love of Nature, p. 228; of the love for art, p. 228. Self-control and circumspection in speech, p. 229; food, p. 230; and sexual life, p. 231. The Jewish view of marriage, p. 233. Effect of the rationalization of life, more especially of the sexual life, on economic activities, p. 234. The Jews' intense love of family-life, p. 235; purity of Jewish family-life, p. 235; Jewish family-life and economic activities, p. 237.
• (6) Israel and the Nations: The Jew created the Ghetto, p. 238. Jewish self-consciousness, p. 239. Jews always a people apart, p. 239. Economic effect of this seclusion, p. 241. Lending at interest, p. 242. "Your neighbour" and the "stranger," p. 242. Intercourse with the "stranger," p. 245. The Jews the apostles of laissez-faire, p. 246.
• (7) Judaism and Puritanism: Identity of view in the two, p. 249. How the latter was influenced by the former is a very difficult question, p. 249.

CHAPTER XII

JEWISH CHARACTERISTICS

• (3) Tewish Characteristics as applied to Capitalism: Similarity between Judaism and Capitalism, p. 274. The kindred trio—Capitalism, Judaism, and Liberalism, p. 275. The Jew is well fitted to be an undertaker, p. 276; and also a trader, p. 277.

PART III

THE ORIGIN OF THE JEWISH GENIUS

CHAPTER XIII

THE RACE PROBLEM

Consideration of the origin of the Jewish genius necessary to supplement the conclusion already arrived at, p. 281. The problem many-sided, p. 282. The question of Jewish race and the general race question, p. 283.

• (1) The Anthropology of the Jew: Agreement as to the essential facts, p. 283. Are the Jews a pure race? p. 285. Influence of proselytes overestimated, p. 285. Mixed marriages, p. 286. Physiological differences, p. 289; differences in physiognomy, p. 289.
• (2) The Jewish "Race": What is a "race"? p. 291. The Jews a

CHAPTER XIV

THE VICISSITUDES OF THE JEWISH PROPLE

The great outstanding fact—a Southern people transplanted among Northern peoples, p. 323. The Jews a desert and nomadic people. p. 324. They conquer Canaan, p. 325; yet continue to be filled with the nomadic spirit, p. 326. Proof of this in the nomadic character of their early literature, p. 327. The term "Nomadic" by no means uncomplimentary, p. 328. The influence of the Exile, p. 329. The Diaspora, p. 331. The Wandering Jew, p. 333. The Jews become town-dwellers, p. 334. Modern cities are great deserts, p. 334. Contrast between the cold North and the warm South, p. 335. Jewish characteristics due to peculiar environment, p. 337. The opinions of Juan Huarte de San Juan, p. 337. Jewish intellectuality and desert life, p. 339. Jewish adaptability and nomad life, p. 341. Jewish energy and their Southern origin, p. 342. "Sylvanism" and Feudalism compared with "Saharaism" and Capitalism, p. 343. The Jews and money, p. 344. The Jews and the Ghetto, p. 347.

NOTES AND REFERENCES, p. 355.

TRANSLATOR'S INTRODUCTORY NOTE

For some years past Sombart has been considering the revision of his magnum opus on modern capitalism, and in the course of his studies came across the problem, quite accidentally, as he himself tells us, of the relation between the Jews and modern capitalism. The topic fascinated him, and he set about inquiring what that relationship precisely was. The results of his labours were published in the book 1 of which this is an English edition.

The English version is slightly shorter than the German original. The portions that have been left out (with the author's concurrence) are not very long and relate to general technical questions, such as the modern race theory or the early history of credit instruments. Furthermore, everything found within square brackets has been added by the translator.

My best thanks are due to my wife, who has been constantly helpful with suggestions and criticisms, and to my friend Leon Simon for the verse rendering on p. 208.

ME

London, April 21, 1913

CHAPTER I

INTRODUCTORY

be found. In the first place, even the best statistics do not tell us everything; nay, often the most important aspect of what we are trying to discover is omitted. Statistics are silent as to the dynamic effects which strong individualities produce in economic, as indeed in all human life—effects which have consequences reaching far beyond the limits of their immediate surroundings. Their actual importance for the general tendency of any particular development is greater far than any set of figures can reveal. Therefore the statistical method must be supplemented by some other.

But more than this. The statistical method, owing to lack of information, cannot always be utilized. It is indeed a lucky accident that we possess figures recording the number of those engaged in any industry or trade, and showing their comparative relation to the rest of the population. But a statistical study of this kind, on a large scale, is really only a possibility for modern and future times. Even then the path of the investigator is beset by difficulties. Still, a careful examination of various sources, including the assessments made by Jewish communities on their members, may lead to fruitful results. I hope that this book will give an impetus to such studies, of which, at the present time, there is only one that is really useful—the enquiry of Sigmund Mayr, of Vienna.

that mark our modern economic life were given their first form by Jews, i.e., either that some particular form of organization was first introduced by the Jews, or that some well-known business principles, now accepted on all hands as fundamental, are specific expressions of the Jewish spirit. This of necessity demands that the history of the factors in economic development should be traced to their earliest beginnings. In other words, we must study the childhood of the modern capitalistic system, or, at any rate, the age in which it received its modern form. But not the childhood only: its whole history must be considered. For throughout, down to these very days, new elements are constantly entering the fabric of capitalism and changes appear in its characteristics. Wherever such are noted our aim must be to discover to whose influence they are due. Often enough this will not be easy; sometimes it will even be impossible; and scientific imagination must come to the aid of the scholar.

Another point should not be overlooked. In many cases the people who are responsible for a fundamental idea or innovation in economic life are not always the inventors (using that word in its narrowest meaning). It has often been asserted that the Jews have no inventive powers; that not only technical but also economic discoveries were made by non-Jews alone, and that the Jews have always been able cleverly to utilize the ideas of others. I dissent from this general view in its entirety. We meet with Jewish inventors in the sphere of technical science, and certainly in that of economics, as I hope to show in this work. But even if the assertion which we have mentioned were true, it would prove nothing against the view that Jews have given certain aspects of economic life the specific features they bear. In the economic world it is not so much the inventors that

matter as those who are able to apply the inventions: not those who conceive ideas (e.g., the hire-purchase system) as those who can utilize them in everyday life.

Before proceeding to the problem before us—the share of the Jews in the work of building up our modern capitalistic system—we must mention one other point of importance. In a specialized study of this kind Jewish influence may appear larger than it actually was. That is in the nature of our study, where the whole problem is looked at from only one point of view. If we were enquiring into the influence of mechanical inventions on modern economic life the same would apply: in a monograph that influence would tend to appear larger than it really was. I mention this point, obvious though it is, lest it be said that I have exaggerated the part played by the Jews. There were undoubtedly a thousand and one other causes that helped to make the economic system of our time what it is. Without the discovery of America and its silver treasures, without the mechanical inventions of technical science, without the ethnical peculiarities of modern European nations and their vicissitudes, capitalism would have been as impossible as without the Jews.

In the long story of capitalism, Jewish influence forms but one chapter. Its relative importance to the others I shall show in the new edition of my Modern Capitalism, which I hope to have ready before long.

This caveat will, I trust, help the general reader to a proper appreciation of the influence of Jews on modern economic life. But it must be taken in conjunction with another. If on the one hand we are to make some allowance, should our studies apparently tend to give Jews a preponderating weight in economic affairs, on the other hand, their contribution is very often even larger than we are led to believe. For our researches can deal only with one portion of the problem, seeing that all the material

is not available. Who to-day knows anything definite about the individuals, or groups, who founded this or that industry, established this or that branch of commerce, first adopted this or that business principle? And even where we are able to name these pioneers with certainty, there comes the further question, were they Jews or not?

The tendency to apostasy is stronger among Austrian Jews, especially among those of Vienna. At the present time, between five and six hundred Jews in that city renounce their faith every year, and from 1868 to 1903 there have been no less than 9085. The process grows apace; in the years 1868 to 1879 there was on an average one baptism annually for every 1200 Jews; in the period 1880 to 1889 it was one for 420-430 Jews; while between 1890 and 1903 it had reached one for every 260-270.3

But the renegade Jews are not the only group whose influence on the economic development of our time it is difficult to estimate. There are others to which the same applies. I am not thinking of the Jewesses who married into Christian families, and who, though they thus ceased to be Jewish, at any rate in name, must nevertheless have retained their Jewish characteristics. The people I have in mind are the crypto-Jews, who played so important a part in history, and whom we encounter in every century. In some periods they formed a very large section of Jewry. But their non-Jewish pose was so admirably sustained that among their contemporaries they passed as Christians or Mohammedans. We are told, for example, of the Jews of the South of France in the 15th and 16th centuries, who came originally from Spain and Portugal (and the description applies to the Marannos everywhere): "They practised all the outward forms of Catholicism; their births, marriages and deaths were entered on the registers of the church, and they received the sacraments of baptism, marriage and

Finally, our enquiries will not be able to take any account of all those Jews who, prior to 1848, took an active part in the economic life of their time, but who were unknown to the authorities. The laws forbade Jews to exercise their callings. They were therefore compelled to do so, either under cover of some fictitious Christian person or under the protection of a "privileged" Jew, or they were forced to resort to some other trick in order to circumvent the law. Reliable authorities are of opinion that the number of Jews who in many a town lived secretly in this way must have been exceedingly large. In the forties of last century, for example, it is said that no less than 12,000 Jews, at a moderate estimate, were to be found in Vienna. The wholesale textile trade was at that time already in their hands, and entire districts in the centre of the city were full of Jewish shops. But the official list of traders of 1845 contained in an appendix the names of only sixty-three Jews, who were described as "tolerated Jewish traders,"

What that contribution was we shall now proceed to show.

CHAPTER II

THE SHIFTING OF THE CENTRE OF ECONOMIC LIFE SINCE THE SIXTEENTH CENTURY

The most ludicrous explanations of this well-known fact have been suggested by historians. It has been said, for example, that the cause which led to the economic decline of Spain and Portugal and of the Italian and South German city states was the discovery of America and of the new route to the East Indies; that the same cause lessened the volume of the commerce of the Levant, and therefore undermined the position of the Italian commercial cities which depended upon it. But this explanation is not in any way satisfactory. In the first place, Levantine commerce maintained its pre-eminence through

18th centuries, such as few French or English cities could rival?

This is not the place to go into the question in all its many-sidedness. A number of causes contributed to bring about the results we have mentioned. But from the point of view of our problem one possibility should not be passed over which, in my opinion, deserves most serious consideration, and which, so far as I know, has not yet been thought of. Cannot we bring into connexion the shifting of the economic centre from Southern to Northern Europe with the wanderings of the Jews? The mere suggestion at once throws a flood of light on the events of those days, hitherto shrouded in semi-darkness. It is indeed surprising that the parallelism has not before been observed between Jewish wanderings and settlement on the one hand, and the economic vicissitudes of the different peoples and states on the other. Israel passes over Europe like the sun: at its coming new life bursts forth; at its going all falls into decay. A short résumé of the changing fortunes of the Jewish people since the 15th century will lend support to this contention.

The first event to be recalled, an event of world-wide import, is the expulsion of the Jews from Spain (1492) and from Portugal (1495 and 1497). It should never be forgotten that on the day before Columbus set sail from Palos to discover America (August 3, 1492) 300,000 Jews are said to have emigrated from Spain to Navarre, France, Portugal and the East; nor that, in the years during which Vasco da Gama searched for and found the sea-passage to the East Indies, the Jews were driven from other parts of the Pyrenean Peninsula.74

It was by a remarkable stroke of fate that these two occurrences, equally portentous in their significance—the opening-up of new continents and the mightiest upheavals in the distribution of the Jewish people—should have coincided. But the expulsion of the Jews from the Pyrenear Peninsula did not altogether put an end to their history there. Numerous Jews remained behind as pseudo-Christians (Marannos), and it was only as the Inquisition from the days of Philip II onwards, became more and more relentless that these Jews were forced to leave the land of their birth. During the centuries that followed, and especially towards the end of the 16th, the Spanish and Portuguese Jews settled in other countries. It was during this period that the doom of the economic prosperity of the Pyrenean Peninsula was sealed.

The same fate overtook them in the 16th century in a number of Italian cities. They were driven from Sicily (1492), from Naples (1540-1), from Genoa and from Venice (1550). Here also economic decline and Jewish emigration coincided in point of time.

the only two that were able to maintain their former splendour, and indeed to add to it from day to day, were Frankfort and Hamburg.10

In France in the 17th and 18th centuries the rising towns were Marseilles, Bordeaux, Rouen—again the havens of refuge of the Jewish exiles. 11

As for Holland, it is well-known that at the end of the 16th century a sudden upward development (in the capitalistic sense) took place there. The first Portuguese Marannos settled in Amsterdam in 1593, and very soon their numbers increased. The first synagogue in Amsterdam was opened in 1598, and by about the middle of the 17th century there were Jewish communities in many Dutch cities. In Amsterdam, at the beginning of the 18th century, the estimated number of Jews was 2400. But even by the middle of the 17th century their intellectual influence was already marked; the writers on international law and the political philosophers speak of the ancient Hebrew commonwealth as an ideal which the Dutch constitution might well seek to emulate. The Jews themselves called Amsterdam at that time their grand New Jerusalem.

brief space during which Antwerp became the commercial centre and the money-market of the world should have been just that between the coming and the going of the Marannos.¹⁶

It was the same in England. The economic development of the country, in other words, the growth of capitalism, 17 ran parallel with the influx of Jews, mostly of Spanish and Portuguese origin. 18

It was believed that there were no Jews in England from the time of their expulsion under Edward I (1290) until their more or less officially recognized return under Cromwell (1654-56). The best authorities on Anglo-Jewish history are now agreed that this is a mistake. There were always Jews in England; but not till the 16th century did they begin to be numerous. Already in the reign of Elizabeth many were met with, and the Queen herself had a fondness for Hebrew studies and for intercourse with Jews. Her own physician was a Jew, Rodrigo Lopez, on whom Shakespeare modelled his Shylock. Later on, as is generally known, the Jews, as a result of the efforts of Manasseh ben Israel, obtained the right of unrestricted domicile. Their numbers were increased by further streams of immigrants including, after the 18th century, Jews from Germany, until, according to the author of the Anglia Judaica, there were 6000 Jews in London alone in the year 1738.19

When all is said, however, the fact that the migration of the Jews and the economic vicissitudes of peoples were coincident events does not necessarily prove that the arrival of Jews in any land was the only cause of its rise or their departure the only cause of its decline. To assert as much would be to argue on the fallacy "post hoc, ergo propter hoc." Nor are the arguments of later historians on this subject conclusive, and therefore I will not mention any in support of my thesis.20 But the

opinions of contemporaries always, as I think, deserve attention. So I will acquaint the reader with some of them, for very often a word suffices to throw a flood of light on their age.

When the Senate of Venice, in 1550, decided to expel the Marannos and to forbid commercial intercourse with them, the Christian merchants of the city declared that it would mean their ruin and that they might as well leave Venice with the exiles, seeing that they made their living by trading with the Jews. The Jews controlled the Spanish wool trade, the trade in Spanish silk and crimsons, sugar, pepper, Indian spices and pearls. A great part of the entire export trade was carried on by Jews, who supplied the Venetians with goods to be sold on commission; and they were also bill-brokers.²¹

In England the Jews found a protector in Cromwell, who was actuated solely by considerations of an economic nature. He believed that he would need the wealthy Jewish merchants to extend the financial and commercial prosperity of the country. Nor was he blind to the usefulness of having moneyed support for the government.²²

Like Cromwell, Colbert, the great French statesman of the 17th century, was also sympathetically inclined towards the Jews, and in my opinion it is of no small significance that these two organizers, both of whom consolidated modern European states, should have been so keenly alive to the fitness of the Jew in aiding the economic (i.e., capitalistic) progress of a country. In one of his Ordinances to the Intendant of Languedoc, Colbert points out what great benefits the city of Marseilles derived from the commercial capabilities of the Jews.²³ The inhabitants of the great French trading centres in which the Jews played an important rôle were in no need of being taught the lesson; they knew it from their own

experience and, accordingly, they brought all their influence to bear on keeping their Jewish fellow-citizens within their walls. Again and again we hear laudatory accounts of the Jews, more especially from the inhabitants of Bordeaux. In 1675 an army of mercenaries ravaged Bordeaux, and many of the rich Jews prepared to depart. The Town Council was terrified, and the report presented by its members is worth quoting. "The Portuguese who occupy whole streets and do considerable business have asked for their passports. They and those aliens who do a very large trade are resolved to leave; indeed, the wealthiest among them, Gaspar Gonzales and Alvares, have already departed. We are very much afraid that commerce will cease altogether." ²⁴ A few years later the Sous-Intendant of Languedoc summed up the situation in the words "without them (the Jews) the trade of Bordeaux and of the whole province would be inevitably ruined." ²⁵

We have already seen how the fugitives from the Iberian Peninsula in the 16th century streamed into Antwerp, the commercial metropolis of the Spanish Netherlands. About the middle of the century, the Emperor in a decree dated July 17, 1549 withdrew the privileges which had been accorded them. Thereupon the mayor and sheriffs, as well as the Consul of the city, sent a petition to the Bishop of Arras in which they showed the obstacles in the way of carrying out the Imperial mandate. The Portuguese, they pointed out, were large undertakers; they had brought great wealth with them from the lands of their birth, and they maintained an extensive trade. "We must bear in mind," they continued, "that Antwerp has grown great gradually, and that a long space of time was needed before it could obtain possession of its commerce. Now the ruin of the city would necessarily bring with it the

ruin of the land, and all this must be carefully considered before the Jews are expelled." Indeed, the mayor, Nicholas Van den Meeren, went even further in the matter. When Queen Mary of Hungary, the Regent of the Netherlands, was staying in Ruppelmonde, he paid her a visit in order to defend the cause of the New Christians, and excused the conduct of the rulers of Antwerp in not publishing the Imperial decree by informing her that it was contrary to all the best interests of the city.²⁶ His efforts, however, were unsuccessful, and the Jews, as we have already seen, left Antwerp for Amsterdam.

Antwerp lost no small part of its former glory by reason, of the departure of the Jews, and in the 17th centrary especially it was realized how much they contributed to bring about material prosperity. In 1653 a committee was appointed to consider the question whether the Jews should be allowed into Antwerp, and it expressed itself on the matter in the following terms: "And as for the inconveniences which are to be feared and apprehended in the public interest—that they (the Jews) will attract to themselves all trade, that they will be guilty of a thousand frauds and tricks, and that by their usury they will devour the wealth of good Catholics—it seems to us on the contrary that by the trade which they will expand far beyond its present limits the benefit derived will be for the good of the whole land, and gold and silver will be available in greater quantities for the needs of the state." 27

The Dutch in the 17th century required no such recommendations; they were fully alive to the gain which the Jews brought. When Manasseh ben Israel left Amsterdam on his famous mission to England, the Dutch Government became anxious; they feared lest it should be a question of transplanting the Dutch Jews to

England, and they therefore instructed Neuport, their ambassador in London, to sound Manasseh as to his intentions. He reported (December 1655) that all was well, and that there was no cause for apprehension. "Manasseh ben Israel hath been to see me, and did assure me that he doth not desire anything for the Jews in Holland but only for those as sit in the Inquisition in Spain and Portugal." 28

So much for the judgment of contemporaries. But as a complete proof even that will not serve. We must

form our own judgment from the facts, and therefore our first aim must be to seek these out. That means that we must find from the original sources what contributions the Jews made to the building-up of our modern economic life from the end of the 15th century onward—the period, that is, when Jewish history and general European economic progress both tended in the same direction. We shall then also be able to state definitely to what extent the Jews influenced the shifting of the centre of economic life.

My own view is, as I may say in anticipation, that the importance of the Jews was twofold. On the one hand, they influenced the outward form of modern capitalism; on the other, they gave expression to its inward spirit. Under the first heading, the Jews contributed no small share in giving to economic relations the international aspect they bear to-day; in helping the modern state, that framework of capitalism, to become what it is; and lastly, in giving the capitalistic organization its peculiar features, by inventing a good many details of the commercial machinery which moves the business life of to-day, and by co-operating in the perfecting of others. Under the second heading, the importance of the Jews is so enormous because they, above all others, endowed economic life with its modern spirit; they seized upon the essential idea of capitalism and carried it to its fullest development.

We shall consider these points in turn, in order to obtain a proper notion of the problem. Our intention is to do no more than ask a question or two, and here and there to suggest an answer. We want merely to set the reader thinking. It will be for later research to gather sufficient material by which to judge whether, and to what extent, the views as to cause and effect here propounded have any foundation in actual fact.

CHAPTER III

THE QUICKENING OF INTERNATIONAL TRADE

It would appear that even before their formal admission into England—that is, in the first half of the 17th century—the extent of the trade in the hands of Jews totalled one-twelfth of that of the whole kingdom.33 Unfortunately we are not told on what authority this calculation rests, but that it cannot be far from the truth is apparent from a statement in a petition of the merchants of London. The question was whether Jews should pay the duty on imports levied on foreigners. The petitioners point out that if the Jews were exempted, the Crown would sustain a loss of ten thousand pounds annually.34

We are remarkably well informed as to the proportion of trading done by Jews at the Leipzig fairs, 35 and as these were for a long period the centre of German commerce, we have here a standard by which to measure its

intensive and extensive development. But not alone for Germany. One or two of the neighbouring countries, especially Bohemia and Poland, can also be included in the survey. From the end of the 17th century onwards we find that the Jews take an increasing share in the fairs, and all the authorities who have gone into the figures are agreed that it was the Jews who gave to the Leipzig fairs their great importance.36

It is only since the Easter fair of 1756 that we are able to compare the Jewish with the Christian traders, as far as numbers are concerned, for it is only from that date that the Archives possess statistics of the latter. The average number of Jews attending the Leipzig fair was as follows:—

Note especially the speedy increase towards the end of the 17th and 18th centuries and also at the beginning of the 19th.

If we glance at the period 1766 to 1839, we see that the fairs were visited annually by an average of 3185 Jews and 13,005 Christians—that is to say, the Jews form 24.49 per cent., or nearly one-quarter of the total number of Christian merchants. Indeed, in some years, as for example between 1810 and 1820, the Jewish visitors form 33\frac{1}{2} per cent. of the total of their colleagues (4896 Jews and 14,366 Christians). This is significant enough, and there is no need to lay stress on the fact that in all probability the figures given in the table are underestimated.

The share taken by Jews in the commerce of a country may sometimes be ascertained by indirect means. We know, for example, that the trade of Hamburg with Spain and Portugal, and also with Holland, in the 17th century was almost entirely in the hands of the Jews.37 Now some 20 per cent. of the ships' cargoes leaving Hamburg were destined for the Iberian Peninsula, and some 30 per cent. for Holland.38

Here we are met by a striking fact. The Jews for a long time practically monopolized the trade in articles of luxury, and to the fashionable world of the aristocratic 17th and 18th centuries this trade was of supreme moment. What sort of commodities, then, did the Jews specialize in? Jewellery, precious stones, pearls and silks.⁴¹ Gold and silver jewellery, because they had always been prominent in the market for precious metals. Pearls and stones, because they were among the first to settle in those lands (especially Brazil) where these are to be found; and silks, because of their ancient connexions with the trading centres of the Orient.

But the greatest characteristic of "Jew-commerce" during the earlier capitalistic age was, to my mind, the supremacy which Jewish traders obtained, either directly or by way of Spain and Portugal, in the lands from which it was possible to draw large supplies of ready money. I am thinking of the newly discovered gold and silver countries in Central and South America. Again and again we find it recorded that the Jews brought ready money into the country. The theoretical speculator and the practical politician knew well enough that here was the source of all capitalistic development. We too, now that the mists of Adam Smith's doctrines have lifted, have realized the same thing. The establishment of modern economic life meant, for the most part, and of necessity, the obtaining of the precious metals, and in this work no one was so successfully engaged as the Jewish traders. This leads us at once to the subject of the next chapter, which deals with the share of the Jews in colonial expansion.

CHAPTER IV

THE FOUNDATION OF MODERN COLONIES

That the Jews should have been keen colonial settlers was only natural, seeing that the New World, though it was but the Old in a new garb, seemed to hold out a greater promise of happiness to them than cross-grained old Europe, more especially when their last Dorado (Spain) proved an inhospitable refuge. And this applies equally to all colonial enterprises, whether in the East or the West or the South of the globe. There were probably many Jews resident in the East Indies even in mediæval times,⁵¹ and when the nations of Europe, after 1498, stretched out their hands to seize the lands of an ancient civilization, the Jews were welcomed as bulwarks of European supremacy, though primarily they came as pioneers of trade. In all likelihood—exact proofs have not yet been established—the ships of the Portuguese and of the Dutch must have brought shoals of Jewish settlers to their respective Indian possessions. At any rate, Jews participated extensively in all the Dutch settlements, including those in the East. We are told that Jews were large shareholders in the Dutch East

India Company.⁵² We know that the Governor of the Company who, "if he did not actually establish the power of Holland in Java, certainly contributed most to strengthen it," ⁵³ was called Cohn (Coen). Furthermore, a glance at the portraits of the Governors of the Dutch colonies would make it appear that this Coen is not the only Jew among them.⁵⁴ Jews were also Directors of the Company; ⁵⁵ in short, no colonial enterprise was complete without them.⁵⁶

But the real sphere of Jewish influence in colonial

voyage of Columbus were thus supplied by Jews. The money which was equally necessary came from the same quarter, at any rate as regards his first two voyages. For the first voyage, Columbus obtained a loan from Louis de Santangel, who was of the King's Council; and it was to Santangel, the patron of the expedition, and to Gabriel Saniheg, a Maranno, the Treasurer of Aragon, that the first two letters of Columbus were addressed. The second voyage was also undertaken with the aid of Jewish money, this time certainly not voluntarily contributed. On their expulsion from Spain in 1492, the Jews were compelled to leave much treasure behind; this was seized by Ferdinand for the State Exchequer, and with a portion of it Columbus was financed.

But more than that. A number of Jews were among the companions of Columbus, and the first European to set foot on American soil was a Jew—Louis de Torres. So the latest researches would have us believe.⁶²

But what caps all—Columbus himself is claimed to have been a I give this piece of information for what it is worth, without guaranteeing its accuracy. At a meeting of the Geographical Society of Madrid, Don Celso Garcia de la Riega, a scholar famous for his researches on Columbus, read a paper in which he stated that Christobal Colon (not Columbus) was a Spaniard who on his mother's side was of descent. He showed by reference to documents in the town of Pontevedra, in the province of Galicia, that the family of Colon lived there between 1428 and 1528, and that the Christian names found among them were the same as those prevalent among the relatives of the Spanish admiral. These Colons and the Fonterosa family intermarried. The latter were undoubtedly Jews, or they had only recently been converted, and Christobal's mother was called Suzanna Fonterosa. When disorders broke

The history of the Jews in the American colonies, and therefore the history of the colonies themselves, falls into two periods, separated by the expulsion of the Jews from Brazil in 1654.

We have already mentioned the establishment of the sugar industry in St. Thomas by Jews in 1492. By the year 1550 this industry had reached the height of its development on the island. There were sixty plantations with sugar mills and refineries, producing annually, as may be seen from the tenth part paid to the King, 150,000 arrobes of sugar.65

Despite this, the year 1654 marks an epoch in the annals of American-Jewish history. For it was in that year that a goodly number of the Brazilian Jews settled in other parts of America and thereby moved the economic centre of gravity.

In 1664 Thomas Modyford introduced sugar manufacturing from Barbados into Jamaica, 76 which in consequence soon became wealthy. Now, while in 1656, the year in which the English finally wrested the island from Spain, there were only three small refineries in Jamaica, in 1670 there were already 75 mills at work, many of them having an output of 2000 cwts. By 1700 sugar was the principal export of Jamaica and the source of its riches. The petition of the English merchants of

early as 1587, but it was not until the "Dutch" refugees from Brazil settled there that it attained any degree of success.

In all this we must never lose sight of the fact that in those critical centuries in which the colonial system was taking root in America (and with it modern capitalism), the production of sugar was the backbone of the entire colonial economy, leaving out of account, of course, the mining of silver, gold and gems in Brazil. Indeed, it is somewhat difficult exactly to picture to ourselves the enormous significance in those centuries of sugar-making and sugar-selling. The Council of Trade in Paris (1701) was guilty of no exaggerated language when it placed on record its belief that "French shipping owes its splendour to the commerce of the sugar-producing islands, and it is only by means of this that the navy can be maintained and strengthened." Now, it must be remembered that the Jews had almost monopolized the sugar trade; the French branch in particular being controlled by the wealthy family of the Gradis of Bordeaux.81

The position which the Jews had obtained for themselves in Central and South America was thus a powerful
one. But it became even more so when towards the end
of the 17th century the English colonies in North America\nentered into commercial relations with the West Indies.
To this close union, which again Jewish merchants helped
to bring about, the North American Continent (as we
shall see) owes its existence. We have thus arrived
at the point where it is essential to consider the Jewish
factor in the growth of the United States from their first
origins. Once more Jewish elements combined, this time
to give the United States their ultimate economic form.
As this view is absolutely opposed to that generally
accepted (at least in Europe), the question must receive
full consideration.

of this country." 82 On the same occasion ex-President Cleveland remarked: "I believe that it can be safely claimed that few, if any, of those contributing nationalities have directly and indirectly been more influential in giving shape and direction to the Americanism of to-day." 83

It can scarcely be doubted that the immigration of numerous Jews into all the States during the last few decades must have had a stupendous effect on American economic life everywhere. Consider that there are more than a million Jews in New York to-day, and that the greater number of the immigrants have not yet embarked on a capitalistic career. If the conditions in America continue to develop along the same lines as in the last generation, if the immigration statistics and the proportion of births among all the nationalities remain the same, our imagination may picture the United States of fifty or

a hundred years hence as a land inhabited only by Slavs, Negroes and Jews, wherein the Jews will naturally occupy the position of economic leadership.

But these are dreams of the future which have no place in this connexion, where our main concern is with the past and the present. That Jews have taken a prominent share in American life in the present and in the past may be conceded; perhaps a more prominent share than would at first sight appear. Nevertheless, the enormous weight which, in common with many others who have the right of forming an opinion on the subject, I attach to their influence, cannot be adequately explained merely from the point of view of their numbers. It is rather the particular kind of influence that I lay stress on, and this can be accounted for by a variety of complex causes.

That is why I am not anxious to overemphasize the fact, momentous enough in itself, that the Jews in America practically control a number of important branches of commerce; indeed, it is not too much to say that they monopolize them, or at least did so for a considerable length of time. Take the wheat trade, especially in the West; take tobacco; take cotton. We see at once that they who rule supreme in three such mighty industries must perforce take a leading part in the economic activities of the nation as a whole. For all that I do not labour this fact, for to my mind the significance of the Jews for the economic development of the United States lies rooted in causes far deeper than these.

Since the first quickening of the capitalistic spirit on the coastlands of the ocean and in the forests and prairies

United States would never have won complete independence had not the Jews supplied the needs of their armies and furnished them with the indispensable sinews of war. But what the Jews accomplished in this direction did not arise out of specifically American conditions. It was a general phenomenon, met with throughout the history of the modern capitalistic States, and we shall do justice to instances of it when dealing with wider issues.

P Such in outline is the mental picture I have conceived

of the economic development of the United States. Subsequent writers dealing with this subject will be able to fill in more ample details; I myself have only come across a few. But these are so similar in character that they can hardly be taken as isolated instances. The conclusion is forced upon us that they are typical. Nor do I alone hold this view. Governor Pardel of California, for example, remarked in 1905: "He (the Jew) has been the leading financier of thousands of prosperous communities. He has been enterprising and aggressive." 89

Let me quote some of the illustrations I have met with. In 1785 Abraham Mordecai settled in Alabama. "He established a trading-post two miles west of Line Creek, carrying on an extensive trade with the Indians, and exchanging his goods for pinkroot, hickory, nut oil and peltries of all kinds." 90 Similarly in Albany: "As early as 1661, when Albany was but a small trading post, a Jewish trader named Asser Levi (or Leevi) became the owner of real estate there." 91 Chicago has the same story. The first brick house was built by a Jew, Benedict Schubert, who became the first merchant tailor in Chicago, while another Jew, Philip Newburg, was the first to introduce the tobacco business. 92 In Kentucky we hear of a Jewish settler as early as 1816. When in that year the Bank of the United States opened a branch in Lexington, a Mr. Solomon, who had arrived in 1808, was made cashier. 93 In Maryland, 94 Michigan, 95 Ohio 96 and Pennsylvania 97 it is on record that Jewish traders were among the earliest settlers, though nothing is known of their activity.

On the other hand, a great deal is known of Jews in Texas, where they were among the pioneers of capitalism. Thus, for example, Jacob de Cordova "was by far the most extensive land locator in the State until 1856." The Cordova's Land Agency soon became famous not only in

Texas but in New York, Philadelphia and Baltimore, where the owners of large tracts of Texas land resided. Again, Morris Koppore in 1863 became President of the National Bank of Texas. Henry Castro was an immigration agent; "between the years 1843-6 Castro introduced into Texas over 5000 immigrants... transporting them in 27 ships, chiefly from the Rhenish provinces... He fed his colonists for a year, furnished them with cows, farming implements, seeds, medicine, and in short with everything they needed." 98

Sometimes branches of one and the same family distributed themselves in different States, and were thereby enabled to carry on business most successfully. Perhaps the best instance is the history of the Seligman family. There were eight brothers (the sons of David Seligman, of Bayersdorf, in Bavaria) who started a concern which now has branches in all the most important centres in the States. Their story began with the arrival in America in the year 1837 of Joseph Seligman. Two other brothers followed in 1839; a third came two years later. The four began business as clothiers in Lancaster, moving shortly after to Selma Ala. From here they opened three branches in three other towns. By 1848 two more brothers had arrived from Germany and the six moved North. In 1850, Jesse Seligman opened a shop in San Francisco—in the first brick house in that city. Seven years later a banking business was added to the clothing shop, and in 1862 the house of Seligman Brothers was established in New York, San Francisco, London, Paris and Frankfort.99

In the Southern States likewise the Jew played the part of the trader in the midst of agricultural settlers. Too Here also (as in Southern and Central America) we find him quite early as the owner of vast plantations. In South Carolina indeed, "Jew's Land" is synonymous

with "Large Plantations." 101 It was in the South that Moses Lindo became famous as one of the first undertakers in the production of indigo.

These examples must suffice. We believe they tend to illustrate our general statement, which is supported also by the fact that there was a constant stream of Jewish emigration to the United States from their earliest foundation. It is true that there are no actual figures to show the proportion of the Jewish population to the total body of settlers. But the numerous indications of a general nature that we do find make it pretty certain that there must always have been a large number of Jews in America.

It must not be forgotten that in the earliest years the population was thinly scattered and very sparse. New Amsterdam had less than 1000 inhabitants. 102 That being so, a shipful of Jews who came from Brazil to settle there made a great difference, and in assessing Jewish influence on the whole district we shall have to rate it highly. 103 Or take another instance. When the first settlement in Georgia was established, forty Jews were among the settlers. The number may seem insignificant, but when we consider the meagre population of the colony, Jewish influence must be accounted strong. So, too, in Savannah, where in 1733 there were already twelve Jewish families in what was then a tiny commercial centre. 104

That America early became the goal of German and Polish Jewish emigrants is well known. Thus we are told: "Among the poorer Jewish families of Posen there was seldom one which in the second quarter of the 19th century did not have at least one son (and in most cases the ablest and not least enterprising) who sailed away across the ocean to flee from the narrowness and the oppression of his native land." 105 We are not

48 THE JEWS AND MODERN CAPITALISM

CHAPTER V

The development of the modern colonial system and the establishment of the modern State are two phenomena dependent on one another. The one is inconceivable without the other, and the genesis of modern capitalism is bound up with both. Hence, in order to discover the importance of any historic factor in the growth of capitalism it will be necessary to find out what, and how great a part that factor played in both the colonial system and the foundation of the modern State. In the last chapter we considered the Jews in relation to the colonial system; in the present we shall do the same for the modern State.

A cursory glance would make it appear that in no direction could the Jews, the "Stateless" people, have had less influence than in the establishment of modern States. Not one of the statesmen of whom we think in this connexion was a Jew—neither Charles the Fifth, nor Louis the Eleventh, neither Richelieu, Mazarin, Colbert, Cromwell, Frederick William of Prussia nor Frederick the Great. 1074 However, when speaking of these modern statesmen and rulers, we can hardly do so without perforce thinking of the Jews: it would be like Faust without Mephistopheles. Arm in arm the Jew and the ruler stride through the age which historians call modern. To me this union is symbolic of the rise of capitalism, and consequently of the modern State. In most countries

I. THE JEWS AS PURVEYORS.

Although there are numerous cases on record of Jews acting in the capacity of army-contractors in Spain previous to 1492, I shall not refer to this period, because it lies outside the scope of our present considerations.

We shall confine ourselves to the centuries that followed and begin with England.

In the 17th and 18th centuries the Jews had already achieved renown as army-purveyors. Under the Commonwealth the most famous army-contractor was Antonio Fernandez Carvajal, "the great Jew," who came to London some time between 1630 and 1635, and was very soon accounted among the most prominent traders in the land. In 1649 he was one of the five London merchants entrusted by the Council of State with the army contract for corn. 108 It is said that he annually imported into England silver to the value of £100,000. In the period that ensued, especially in the wars of William III, Sir Solomon Medina ("the Jew Medina") was "the great contractor," and for his services he was knighted, being the first professing Jew to receive that honour. 109

It was the same in the wars of the Spanish Succession; here, too, Jews were the principal army-contractors. In 1716 the Jews of Strassburg recall the services they rendered the armies of Louis XIV by furnishing information and supplying provisions. In Indeed, Louis XIV's army-contractor-in-chief was a Jew, Jacob Worms by name; Is and in the 18th century Jews gradually took a more and more prominent part in this work. In 1727 the Jews of Metz brought into the city in the space of six weeks 2000 horses for food and more than 5000 for remounts. Is Field-Marshal Maurice of Saxony, the victor of Fontenoy, expressed the opinion that his armies were never better served with supplies than when the Jews were the contractors. Is One of the best known of the Jewish army-contractors in the time of the last two Louis was Cerf Beer, in whose patent of naturalization it is recorded that "... in the wars which raged in Alsace

Similarly, the house of the Gradis, of Bordeaux, was an establishment of international repute in the 18th century. Abraham Gradis set up large storehouses in Quebec to supply the needs of the French troops there. 116 Under the Revolutionary Government, under the Directory, in the Napoleonic Wars it was always Jews who acted as purveyors. 117 In this connexion a public notice displayed in the streets of Paris in 1795 is significant. There was a famine in the city and the Jews were called upon to show their gratitude for the rights bestowed upon them by the Revolution by bringing in corn. "They alone," says the author of the notice, "can successfully accomplish this enterprise, thanks to their business relations, of which their fellow citizens ought to have full benefit." 118 A parallel story comes from Dresden. In 1720 the Court Jew, Jonas Meyer, saved the town from starvation by supplying it with large quantities of corn. (The Chronicler mentions 40,000 bushels.) 119

All over Germany the Jews from an early date were found in the ranks of army-contractors. Let us enumerate a few of them. There was Isaac Meyer in the 16th century, who, when Cardinal Albrecht admitted him a resident of Halberstadt in 1537, was enjoined by him, in view of the dangerous times, "to supply our monastery with good weapons and armour." There was Joselman von Rosheim, who in 1548 received an imperial letter of protection because he had supplied both money and provisions for the army. In 1546 there is a record of Bohemian Jews who provided great-coats and blankets for the army. In the next century (1633) another Bohemian Jew, Lazarus by name, received an official declaration that

he "obtained either in person, or at his own expense, valuable information for the Imperial troops, and that he made it his business to see that the army had a good supply of ammunition and clothing." The Great Elector also had recourse to Jews for his military needs. Leimann Gompertz and Solomon Elias were his contractors for cannon, powder and so forth. There are numerous others: Samuel Julius, remount contractor under the Elector Frederick Augustus of Saxony; the Model family, court-purveyors and army-contractors in the Duchy of Ansbach in the 17th and 18th centuries are well known. Is In short, as one writer of the time pithily expresses it, "all the contractors are Jews and all the Jews are contractors." Is

Austria does not differ in this respect from Germany, France and England. The wealthy Jews, who in the reign of the Emperor Leopold received permission to re-settle in Vienna (1670)—the Oppenheimers, Wertheimers, Mayer Herschel and the rest—were all army-contractors. And we find the same thing in all the countries under the Austrian Crown. Lastly, we must mention the Jewish army-contractors who provisioned the American troops in the Revolutionary and Civil Wars. 127

II. THE JEWS AS FINANCIERS.

This has been a theme on which many historians have written, and we are tolerably well informed concerning this aspect of Jewish history in all ages. It will not be necessary for me, therefore, to enter into this question in great detail; the enumeration of a few well-known facts will suffice.

Already in the Middle Ages we find that everywhere taxes, salt-mines and royal domains were farmed out to Jews; that Jews were royal treasurers and money-lenders, most frequently, of course, in the Pyrenean Peninsula, where the Almoxarife and the Rendeiros were chosen preferably from among the ranks of the rich Jews. But as this period does not specially concern us here, I will not mention any names but refer the reader to the general literature on the subject. 128

It was, however, in modern times, when the State as we know it to-day first originated, that the activity of the Jews as financial advisers of princes was fraught with mighty influence. Take Holland, where although officially deterred from being servants of the Crown, they very quickly occupied positions of authority. We recall Moses Machado, the favourite of William III; Belmonte, a family of ambassadors (Lords of Schoonenberg); the wealthy Suasso, who in 1688 lent William two million gulden, and others. 129

The effects of the Jewish haute finance in Holland made themselves felt beyond the borders of the Netherlands, because that country in the 17th and 18th centuries was the reservoir from which all the needy princes of Europe drew their money. Men like the Pintos, Delmontes, Bueno de Mesquita, Francis Mels and many others may in truth be regarded as the leading financiers of Northern Europe during that period. 130

Next, English finance was at this time also very extensively controlled by Jews. 131 The monetary needs of the Long Parliament gave the first impetus to the settlement of rich Jews in England. Long before their admission by Cromwell, wealthy crypto-Jews, especially from Spain and Portugal, migrated thither via Amsterdam: the year 1643 brought an exceptionally large contingent. Their rallying-point was the house of the Portuguese Ambassador in London, Antonio de Souza, himself a Maranno. Prominent among them

was Antonio Fernandez Carvajal, who has already been mentioned, and who was as great a financier as he was an army-contractor. It was he who supplied the Commonwealth with funds. The little colony was further increased under the later Stuarts, notably under Charles the Second. In the retinue of his Portuguese bride, Catherine of Braganza, were quite a number of moneyed Jews, among them the brothers Da Sylva, Portuguese bankers of Amsterdam, who were entrusted with the transmission and administration of the Queen's dowry. 132 Contemporaneously with them came the Mendes and the Da Costas from Spain and Portugal, who united their families under the name of Mendes da Costa.

About the same period the Ashkenazi (German) Jews began to arrive in the country. On the whole, these could hardly compare for wealth with their Sephardi (Spanish) brethren, yet they also had their capitalistic magnates, such as Benjamin Levy for example.

Under William III their numbers were still further increased, and the links between the court and the rich Jews were strengthened. Sir Solomon Medina, who has also been already mentioned, followed the King from Holland, as his banker, and with him came the Suasso, another of the plutocratic families. Under Queen Anne one of the most prominent financiers in England was Menasseh Lopez, and by the time the South Sea Bubble burst, the Jews as a body were the greatest financial power in the country. They had kept clear of the wild speculations which had preceded the disaster and so retained their fortunes unimpaired. Accordingly, when the Government issued a loan on the Land Tax, the Jews were in a position to take up one quarter of it. During this critical period the chief family was that of the Gideons, whose representative, Sampson Gideon (1699–1762), was the "trusted adviser of the Government," the

friend of Walpole, the "pillar of the State credit." In 1745, the year of panics, Sampson raised a loan of £1,700,000 for the assistance of the Government. On his death his influence passed to the firm of Francis and Joseph Salvador, who retained it till the beginning of the 19th century, when the Rothschilds succeeded to the financial leadership.

It is easier to trace Jewish influence in finance in

Elector owed the Emperor, 145 and lastly, in the Marggravate of Bayreuth, there were the Baiersdorfs. 146

And now comes an extraordinary thing. Whilst for centuries (especially during the 17th and the 18th—the two so momentous in the growth of the modern State) the Jews had personal financial dealings with the rulers, in the century that followed (but even during the two already mentioned) the system of public credit gradually took a new form. This forced the big capitalist from his dominating position more and more into the background, and allowed an ever-increasing number of miscellaneous creditors to take his place. Through the evolution of the modern method of floating loans the public credit was, so to speak, "democratized," and, in consequence, the Court Jew became superfluous. But the Jews themselves were not the least who aided the growth of this new system of borrowing, and thus they

CHAPTER VI

THE PREDOMINANCE OF COMMERCE IN ECONOMIC LIFE

It is a matter of common knowledge that the Stock Exchange in modern times is becoming more and more the heart of all economic activities. With the fuller development of capitalism this was only to be expected, and there were three clear stages in the process. The first was the evolution of credit from being a personal matter into one of an impersonal relationship. It took shape and form in securities. Stage two: these securities were made mobile—that is, bought and sold in a market. The last stage was the formation of undertakings for the purpose of creating such securities.

In all the stages the Jew was ever present with his creative genius. We may even go further and say that it was due specifically to the Jewish spirit that these characteristics of modern economic life came into being.

I. THE ORIGIN OF SECURITIES. 151

Securities represent the standardization of personal indebtedness. 152 We may speak of "standardization" in this sense when a relationship which was originally personal becomes impersonal; where before human beings directly acted and reacted on each other, now a system obtains. An instance or two will make our meaning clear. Where before work was done by man, it is now done by a machine. That is the standardization of work.

In olden times a battle was won by the superior personal initiative of the general in command; nowadays victory falls to the leader who can most skilfully utilize the body of experience gathered in the course of years and can best apply the complicated methods of tactics and strategy; who has at his disposal the best guns and who has the most effective organization for provisioning his men. We may speak in this instance of the "standardization" of war. A business becomes standardized when the head of the firm who came into personal contact with his employees on the one hand and with his customers on the other, is succeeded by a board of directors, under whom is an army of officials, all working on an organized plan, and consequently business is more or less of an automatic process.

Now, at a particular stage in the growth of capitalism credit became standardized. That is to say, that whereas before indebtedness arose as the result of an agreement between two people who knew each other, it was now rearranged on a systematic basis, and the people concerned might be entire strangers. The new relationship is expressed by negotiable instruments, whether bill of exchange or security or banknote or mortgage deed, and a careful analysis of each of them will prove this conclusively.

Of the three persons mentioned in a bill of exchange, the specified party in whose favour the document is made out (the payee) or, if no name is mentioned, the bearer of the document may be quite unknown to the other two; he may have had no direct business relation with the party making out the bill (the drawer), yet this document establishes a claim of the former on the latter—general and impersonal. 153

The security gives the owner the right to participate in the capital and the profit of a concern with which he has no direct personal contact. He may never even have seen the building in which the undertaking in question is housed, and when he parts with his security to another person he transfers his right of participation.

Similarly with a banknote. The holder has a claim on the bank of issue despite the fact that he personally may never have deposited a penny with it.

That this method of reasoning requires great caution is self-evident. Yet it may lead to useful conclusions for all that. There are cases, as we shall see, where the share of the Jews in the extension of some economic policy or machinery may be proved by a fund of documentary evidence. In other instances, and they are

Bearing this in mind, let us enquire into the genesis of one or two types of credit instruments.

1. The Bill of Exchange.

Not merely the early history of the bill of exchange but rather that of the modern endorsable bill is what we are concerned with most of all. It is generally accepted that the endorsing of bills of exchange had been fully developed prior to the 17th century, and the first complete legal recognition of such endorsement was found in Holland (Proclamation in Amsterdam of January 24, 1651). 156 Now, as we shall see presently, all developments in the money and credit systems of Holland in the 17th century were due more or less to Jewish influence. Some authorities trace the origin of endorsable bills of exchange to Venice, where they were made illegal by a law of December 14, 1593. 157 It is fairly certain that the use of circulating endorsable bills in Venice must have been first commenced by Jews, seeing that we know that nearly all bill-broking in the Adriatic city in the 16th century was in their hands. In the petition of the Christian merchants of Venice of the year 1550 (to which reference has already been made) the passage relating to the bill business of Jews reads as follows 158:—

^"We carry on the same commerce with them also in matters of exchange, because they continually remit to us their money . . . sending cash, in order that we may change it for them for Lyons, Flanders and other parts of the world on our Exchange, or indeed that we may buy for them silken cloths and other merchandise according to their convenience, gaining our usual commission.

had become so unpopular in Genoa that they had aroused the hatred of the citizens; we know, finally, that there were constant communications between the Genoese bankers and the Jewish, or rather Maranno, banking houses of the Spanish cities, e.g., with the Espinosas, the leading bankers in Seville. 160

2. Securities (Stocks and Shares).

In all early instances the security was for unequal and varying sums. The personal relationship thus showed itself plainly enough. In some companies shares could not be transferred at all except by consent of all the other members. In fact, the security was just a certificate of membership, and throughout the 18th century such securities as were made out in the name of a specified person predominated. Even where there was freedom of transfer from one person to another (as in the case of the Dutch East India Company) the process was beset with innumerable obstacles and difficulties. 163

3. Banknotes.

Many opinions prevail as to the precise occasion when banknotes first came into use. For my own part I lay stress on the standardization here also. The first time any banker issued a note without reference to some

But perhaps no particular firm introduced the new paper money. It may have come into existence in order to satisfy the needs of some locality. Nevertheless, if we take as the place of its origin the town where the earliest banks reached a high degree of perfection, we shall surely be on the safe side. From this point of view Venice is admirably qualified. Now Venice was a city of Jews, and that is wherein its interest for us lies in this connexion. According to a list dating from the year 1152, there were no fewer than 1300 Jews in Venice. 169 In the 16th century their number was estimated at 6000; and Jewish manufacturers employed 4000 Christian workmen. 170 These figures, to be sure, have no scientific value, but they do show that the Jews must have been pretty numerous in Venice. From other sources we are acquainted with some of their activities. Thus, we find Jews among the leading bankers—one of the most influential families were the Lipmans; and in 1550, as we have already noted, the

Christian merchants of Venice stated that they might as well emigrate if trade with the Marannos were forbidden them.

It is possible that the Marannos may have founded the business of banking even while they were yet in Spain. We have, however, no satisfactory information, though many writers have dealt with the subject.¹⁷¹ There is a strong probability that at the time when measures were taken against them (16th century) the Jews were the leading bankers in the Pyrenean Peninsula. If this be so, is not the presumption justifiable that before then, too, the Jews engaged in banking?