The Jews in America Trilogy (61 page)

And, in the careless reaches of Fire Island in a recent summer, a situation developed between two neighboring families—let us call them the A's and the B's—that split the community for several weeks. It began when Mrs. A's little boy—call him Billy—appeared outside Mrs. B's large front window and, for reasons that are uncertain, made unpleasant faces and spat on the glass. Mrs. B, who saw the deed, was incensed. She charged out of her house, seized young Billy, and spanked him so soundly that Billy ran wailing home saying that Mrs. B had “beaten” him. Mrs. A, outraged, went to her telephone and harsh words flew back and forth between the two women. The feud then escalated to the point where both families consulted their lawyers, and the A's instigated a suit against the B's for Mrs. B's abusive treatment of Billy. At the height of the furor, one neighbor remarked half-seriously, “Well, at least nobody can say that anti-Semitism enters into it”—since both the A's and the B's were Jewish. “Oh, but you're entirely wrong!” cried a friend. “That's what's at the
heart
of it. Didn't you know? The A's are
white
Jews.”

There continues to be that question of class. The old differentiation between the German “uptown” Jew and the Russian of the “Lower East Side” has become a difference between the “quiet, cultivated Wall Street type” and the “noisy, pushy, Seventh Avenue type”—who do not mix any more easily than oil and water. And out of all this has come the impression that Jews “dominate” both these fields in the city.

A
Fortune
survey in 1936, however, looking into the billowing anti-Semitism in both Europe and America, pointed out that the Jewish community had not at all monopolized industry, as was often claimed, though Jews had tended to gravitate toward certain segments of it. There were then, as there continue to be, few Jews in important positions in the insurance business. Yet the liquor business, which traditionally was the prerogative of Jews in Poland (for one reason because
they did not drink), is heavily in Jewish (non-German) hands in the United States, accounting for about half of the distillers. Advertising is essentially a “white, Anglo-Saxon Protestant” business in New York, yet broadcasting, which is so closely allied to it, might be said to be the opposite, since the major networks are headed by Jews. There have been few Jews, if any, in automobile manufacturing, though there are many in dealerships and the car-rental business; there are few in heavy industry, hardly any in transportation or utilities. The magazine remarked on a “tendency to crowd together [and a] pronounced psychological trait: clannishness, tribal inclinations,” and said that the Jewish influence and position were “to be found in those reaches of industry where manufacturer and merchant meet, hence the dominance in retailing.”

The survey took notice of the historical accidents that tended to move Jewish businessmen from one area to another—from the theater into the motion picture industry, from the junk business, which was such an easy start for a penniless immigrant, to the scrap-metal business. The magazine added: “Wherever Jews may be, industrially or culturally or professionally or merely geographically, they are always present in numbers and almost always present as Jews.” But note was also taken that many German Jews, who had got their start in dry goods and the clothing trade—and who had provided employment for many later-arriving Eastern Jews—considered themselves as having “graduated” into banking, and having “turned over” the garment industry to the rude Easterners.

Yet even in finance the Jewish position was limited to certain types of banking. In the 1930's, of 420 directors of the New York Clearing House, only thirty were Jews. There were practically no Jewish employees in the largest commercial banks, nor are there today. In investment banking Jews occupied a strong but not overwhelming position. Kuhn, Loeb had become the largest Jewish house, followed by the Seligmans, Speyers, Ladenburg-Thalmann, and Lehman Brothers, but none of these was as large as the House of Morgan, and, collectively, they were easily outweighed by non-Jewish houses, including Dillon, Read, which might be termed a semi-Jewish house.
*
In foreign loans, Morgan did 20 percent of the business, followed by the National City Bank and Dillon, Bead, with 12 percent apiece. In domestic
activity, however, Kuhn, Loeb and Morgan were nearly neck and neck—putting the lie, somewhat, to notions of the “international” aspect of Jewish banking. Of 252 members of the New York Stock Exchange, only forty-six were Jewish.

With the creation of the Securities and Exchange Commission and the network of laws controlling the stock market, Wall Street banking lost much of its old raffishness and, to many people's way of thinking, much of its romance and all its fun. In place of its old free-wheeling excitement—the noise and hubbub, sights and sounds that had first appealed to the early Seligman brothers—Wall Street assumed a new sobriety; the daredevil days were over, and in their place had come a new mood of caution, a new emphasis on conformity and routine. The handshaken agreement—as well as the double-cross—became less popular in an age of adding machines, paperwork, and lawyers. Investment banking and stockbrokerage had become, according to one Wall Street man, “less of a game and more of a business.” At the same time, any essential differences between the operations of the German Jewish bankers, who had once relied heavily on ties of friendship and kinship, and their gentile counterparts began to blur and disappear. And, ironically, as Wall Street, that notorious painted lady, became respectable, the third- and fourth-generation German Jews had, in many cases, turned to more “respectable” operations than banking—to teaching, medicine, law, publishing. Soon there was not a single one of the so-called “Jewish houses” which did not have a number of non-Jewish partners, and only a few today are headed by members of the founding families. Among them are Kuhn, Loeb, whose senior partners today include John M. Schiff and Frederick M. Warburg, both great-grandsons of Solomon Loeb, and Gilbert W. Kahn, Otto Kahn's son who, through his mother, is a grandson of another founder, Abraham Wolff. Lehman Brothers, too, is headed by Emanuel Lehman's grandson, Robert Lehman. But others, such as Goldman, Sachs and J. & W. Seligman & Company, have passed “out of the crowd.”

There is one young Jewish house which has demonstrated that much can be accomplished in the old-time way—through a judicious mixture of marriages, sons, mergers, and money. Carl Morris Loeb was born in Frankfurt, the son of a dry-goods merchant, and, in what was becoming a time-honored way, ran away from the family retailing business as a youth to work as an office boy for one of Germany's leading metal-fabricating firms, Metallgesellschaft. In 1892, when Loeb was seventeen, the firm sent the young man to work in the St. Louis office of its
United States subsidiary, the American Metal Company. He had an uncanny “feel” for commodity values, and within three years was manager of the St. Louis office.

At this point, young Loeb came to the attention of American Metal's president, Jacob Langeloth. But even more important, from the standpoint of his future career, was Carl Loeb's choice of a wife. She was Adeline Moses, the daughter of Alfred Huger Moses, the head of one of the most prominent Jewish families in the South.
*
The Moses family had been merchant bankers in Montgomery, and, though Adeline's father had experienced hard times in the post-Civil War South—which explained his presence in St. Louis in the real-estate business—he had other important qualifications. The original Lehman brothers, Mayer and Emanuel, had been his best friends in Montgomery.

Jacob Langeloth brought Carl Loeb to New York, at the age of thirty, to be a vice president of American Metal, and there—though, as everyone pointed out, they were not “real” Loebs—Adeline's connection with the Lehmans proved socially helpful. The new Loebs became fixtures of the German Jewish crowd, and ten years later Carl M. Loeb was president of the American Metal Company. This was his fortunate position when, during World War I, American Metal became separated from its German parent, Metallgesellschaft, and, in one of the shortest success stories on record, Carl Loeb found himself in control of the American company.

Soon however, Carl Loeb was quarreling with his board of directors, who considered their president too dictatorial. In the summer of 1929 Loeb offered his resignation, and it was accepted. Once again, he had chosen, uncannily, the most auspicious moment. Part of the separation agreement was that he sell back some eighty thousand shares of American Metal that he owned at the stock's considerably inflated market price. He did so, and six months later American Metal had dropped 50 percent in the great crash. In 1930 Carl Loeb was out of a job, but very rich.

He was a handsome, imperious man, whose wife never called him anything but a respectful “Mr. Loeb.” In New York the couple occupied what has been described as a “His and Hers apartment,” a vast affair spread out across a building so large that their respective bedrooms were exactly a block apart. Mr. Loeb's favorite means of communication throughout this large territory was the handwritten
memorandum signed “C.M.L.” He liked to entertain opulently, and, before an important dinner party, he liked to stage a full dress rehearsal of the forthcoming dinner one night ahead of the actual affair, complete in every detail including substitute guests who stood in for the guests expected the following night.
*
Sometimes, as is so often the case in show business, the rehearsals went better than the actual performances—as happened when Loeb entertained a visiting Belgian financier whom he particularly wanted to impress. The dinner was disastrous. Mrs. Loeb had retired to her bedroom afterward, when she heard her husband's footsteps approaching down the long corridor that separated the two apartments. Waiting breathlessly for his angry knock, she saw instead a memorandum slipped beneath her door. It said: “Fire the cook. C.M.L.”

Adeline Loeb was the crowd's Mrs. Malaprop, beloved for her slips of the tongue and, at times, what seemed like slips of the entire mind. Meeting Otto Kahn for the first time, she is said to have gushed, “I know your father, the Aga!” When told the story of how Oscar Levant, whose ex-wife married Arthur Loew, had wickedly telephoned the newlyweds on their wedding night to ask, “What's playing at Loew's State?” Mrs. Loeb waited patiently for a punch line and, when none came, asked, “Well, what was?” On another occasion, when one of her sons got into a fight at the Century Country Club and she reproached him, he said, “But Mother, he called me a son of a bitch!” Mrs. Loeb replied, “That's funny. He doesn't even know me.”

For a while after his retirement from American Metal, Carl Loeb busied himself as a gentleman of leisure, and he and his wife took a world cruise. But he was a restless, ambitious man, and soon Adeline Loeb was turning to her son John to say, “Do something about your father. I'd do anything to get him out of the house.” John Loeb's solution was simple and direct. He suggested to his father that they buy a seat on the New York Stock Exchange. Carl asked his son one question: “Do you think you can run an investment banking house?”

John replied that he thought he could. He had already learned certain lessons from previous generations of bankers in the crowd, and among them was the importance of marrying well. Just as the Lehmans had secured their position by marrying Goodharts and Lewisohns, so John L. Loeb secured his by marrying a Lehman—the youngest
daughter of the Arthur Lehmans, Frances, who is always called “Peter” because, some say, she bore a childhood resemblance to Peter Rabbit. Others say her father, in his Old World way, had always wanted a boy. When John and Peter Loeb were married, it was said that he was an adventurer and had married her for her money, even though the great fortune she
might
have inherited from her grandfather, Adolph Lewisohn, failed to materialize, thanks to the latter's industrious spending. What she had more than money was social position and, of course, banking connections. One sister was married to Richard Bernhard, a partner at Wertheim & Company. Another married Benjamin Buttenwieser, still one of the most important partners at Kuhn, Loeb.

John Loeb's new firm opened its doors in January, 1931. Six years later, through a merger with Rhoades & Company, an old gentile firm that needed money, the Loebs' firm, which needed a prestige name, became Carl M. Loeb, Rhoades & Company. Like his banking predecessors, John Loeb has kept his house tightly “in the family,” employing, among others, his son, John Loeb, Jr., a nephew, Thomas Kempner, and, until his recent death, a son-in-law, Richard Beaty, as Loeb, Rhoades partners. There has never been any doubt, however, about who is in charge. Today, John L. Loeb (the L. stands for Langeloth) heads a firm whose partners decorate the boards of directors of sixty American corporations; which manages investment funds totaling over $500 million; which has brokerage income alone of $27 million a year; which has fourteen offices and more than a thousand employees of its own, plus twenty-two correspondent firms in 140 cities in the United States and Canada. The firm's $12.5 million in stated capital places it among the top firms in Wall Street. It need hardly be added that John Loeb, since he is married to one, enjoys excellent relations with the still larger and more prestigious House of Lehman.

John Loeb has inherited his father's astonishing sense of timing. Thanks to antennae around the world that amount to something very like a private CIA, he completed the sale of the firm's major Cuban sugar holdings the day before Fidel Castro took over. In 1945 the Loeb and Lehman millions received a new infusion of wealth when Clifford W. Michel joined Loeb, Rhoades. Michel was married to the former Barbara Richards, one of the granddaughters of Jules Bache, and therefore related to the Cahns and the Sheftels and, by marriage at least, to the Lewisohns (to whom the Lehmans, of course, were already related). Another Bache granddaughter was Mrs. F. Warren Pershing, wife of the son of the World War I General, and head of Pershing & Company, a rich brokerage house. Then, in 1953, John Loeb's daughter,
Ann, married Edgar Bronfman, elder son of Samuel Bronfman, the founder and chief executive of Distillers Corporation—Seagrams, Ltd., undoubtedly the richest man in Canada and among the wealthiest in the world. Bronfman money is not formally a part of Loeb, Rhoades capital, but one of the firm's partners has said, “He's a kind of partner who is awfully important.” (At the Loeb-Bronfman wedding, Mr. Loeb was overheard to say, “Now I know what it feels like to be a poor relation.”) The Bronfman millions, however, have joined Loeb-Lehman and Bache holdings to make up the largest single holding of stock in New York's Empire Trust Company, which has assets of some $300 million. Edgar Bronfman, now in his middle thirties and head of his father's American subsidiary, Joseph E. Seagram & Sons, joined the board of directors of the Empire Trust Company in 1963. The young Bronfmans occupy a New York apartment with its own gymnasium, an air-conditioned estate is Westchester built in the Georgian style, and a 4,480-acre hideaway in Florida called, appropriately, the V.O. Ranch.