"Revisiting the German-Jewish 'Business Elite'"

Histories of Wall Street have tended to posit a sharp division between New York’s “Gentile” (or “Yankee,” or “WASP”) banking firms, largely founded by men of English Christian descent, such as J.P. Morgan & Co., and those firms established by Jewish immigrants from Germany and their descendants, such as Goldman Sachs. Dating back to Barry Supple’s 1957 article on 19th-century German-Jewish financiers, these histories have argued marriage ties, cultural affinities with Germany, and religious identity helped create a “tightly knit” “business elite.” Emphasis on “Gentile” vs. “Jewish” difference has obscured how economic rather than cultural or religious ties to Germany created conditions under which German-Jewish firms succeeded. This paper examines what was German about Wall Street’s “German-Jewish” banking firms and why it mattered, contrasting the firms’ success with both New York’s German-Christian bankers who stumbled after the Civil War and Jewish businessmen descended from colonial-era immigrants who lacked international networks. The paper concludes that the firms’ German ties became obscure because the firms downplayed these connections due to pervasive hostile sentiment after World War I and then later revulsion toward Germany after the Holocaust. This has had the effect of elevating the firms’ Jewish roots, and their success in the face of prevalent anti-Semitism, into a predetermined distinguishing feature, serving to reify a distinction which played little role in shaping the actual development of American corporate finance.