A Conflict of Loyalties: Kuhn, Loeb & Company and the First World War, 1914-1917. In Studies in the American Jewish Experience II: Contributions from the Fellowship Programs of the American Jewish Archives, eds. Abraham J. Peck and Jacob Rader Marcus. Rowman and Littlefield, 1984, pp. 1-32, 169-182.

Abstract

This chapter explores the conflicting pressures to which the American investment banking firm Kuhn, Loeb and Company was exposed during the period of American neutrality preceding US entry into World War I. All the partners were of German Jewish origin. Two, Paul M. Warburg and Felix M. Warburg, were brothers of Max M. Warburg, who was heavily involved in financing the German war effort. Others, including the senior partner Jacob H. Schiff, were emigres from Germany. Some, however, especially partner Otto H. Kahn, were staunchly anglophile in outlook. Many Wall Street bankers, notably the pre-eminent investment bank J. P. Morgan and Company, were fiercely pro-Allied in sympathy, and put heavy pressure on Kuhn, Loeb to participate in Allied war loans. Their German associates, however, Kuhn, Loeb to abstain from such business, and if possible to take part in German war financing. With partners in the firm divided, Kuhn, Loeb tried to remain neutral. The firm did not invest in Allied war loans. Jacob Schiff, a leading member of the Jewish community, stated that this stance did not reflect any sympathies with Germany, but the fact that Tsarist Russia, notorious for its persecution of its Jewish minority, was one of the Allies. Meanwhile, certain individual partners made well-publicized purchases of these securities.