Werner Sombart, The Jews and Modern Capitalism - Selections by Peter Myers; my comments are shown {thus}. Date December 15, 2002; update May 23, 2006.

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First published as Die Juden und das Wirtschaftsleben, by Duncker und Humblot, Leipzip 1911.

"Sombart's book The Jews and Modern Capitalism was a response to Max Weber, and most of his argument was entirely if imperfectly Weberian. Capitalism is inconceivable without the Protestant ethic; Judaism is much more Protestant (older, tougher, and purer) than Protestantism; Judaism is the progenitor of Capitalism ... Puritanism without pork." - Yuri Slezkine, The Jewish Century (Princeton University Press, Princeton, 2004) p. 54. slezkine.html

Werner Sombart, The Jews and Modern Capitalism, translated by M. Epstein, The Free Press, Glencoe, Illinois 1951

{p. 6} 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. ... lest it be said that I have exaggerated the part played by the Jews.

{p. 7} Jews - that is to say, members of the people who profess the Jewish faith. And I need hardly add that although in this definition I purposely leave out any reference to race characteristics, it yet includes those Jews who have withdrawn from their religious community, and even descendants of such, seeing that historically they remain Jews. This must be borne in mind, for when we are determining the influence of the Jew on modern economic life, again and again men appear on the scene as Christians, who in reality are Jews. They or their fathers were baptized, that is all.

{p. 8} 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

{p. 9} extreme unction. Some even took orders and became priests." No wonder then that they do not appear as Jews in the reports of commercial enterprises, industrial undertakings and so forth. Some historians even to-day speak in admiring phrase of the beneficial influence of Spanish or Portuguese "immigrants." So skilfully did the crypto-Jews hide their racial origin that specialists in the field of Jewish history are still in doubt as to whether a certain family was Jewish or not. In those cases where they adopted Christian names, the uncertainty is even greater. There must have been a large number of Jews among the Protestant refugees in the 17th century. General reasons would warrant this assumption, but when we take into consideration the numerous Jewish names found among the Huguenots the probability is strong indeed.

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 fobade 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.

{p. 10} My point was to show that, for many and various reasons, the number of Jews of whom we hear is less than those who actually existed. The reader should therefore bear in mind that the contribution of the Jews to the fabric of modern economic life will, of necessity, appear smaller than it was in reality.

What that contribution was we shall now proceed to show.

{p. 11} One of the most important facts in the growth of modern economic life is the removal of the centre of economic activity from the nations of Southern Europe - the Italians, Spaniards and Portuguese, with whom must also be reckoned some South German lands - to those of the North-West - the Dutch, the French, the English and the North Germans. The epoch-making event in the process was Holland's sudden rise to prosperity, and this was the impetus for the development of the economic possibilities of France and England. ...

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-

{p. 12} out the whole of the 17th and 18th centuries, and during this period the prosperity of the maritime cities in the South of France, as well as that of Hamburg, was very closely bound up with it. In the second place, a number of Italian towns, Venice among them, which in the 17th century lost all their importance, participated to a large extent in the trade of the Levant in the 16th century, and that despite the neglect of the trade route. It is a little difficult to understand why the nations which had played a leading part until the 15th century - the Italians, the Spaniards, the Portuguese - should have suffered in the least because of the new commercial relations with America and the East Indies ...

{p. 13} 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.

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 coin-

{p. 14} cided. But the expulsion of the Jews from the Pyrenean 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.

With the 15th century came the expulsion of the Jews from the German commercial cities - from Cologne (1424?5), from Augsburg (1439?40), from Strassburg (1438), from Erfurt (1458), from Nuremberg (1498?9), from Ulm (1499), and from Ratisbon (1519).

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.

On the other hand, the rise to economic importance, in some cases quite unexpectedly, of the countries and towns whither the refugees fled, must be dated from the first appearance of the Spanish Jews. A good example is that of Leghorn, one of the few Italian cities which enjoyed economic prosperity in the 16th century. Now Leghorn was the goal of most of the exiles who made for Italy. In Germany it was Hamburg and Frankfort that admitted the Jewish settlers. And remarkable to relate, a keen-eyed traveller in the 18th century wandering all over Germany found everywhere that the old commercial cities of the Empire, Ulm, Nuremberg, Augsburg, Mayence and Cologne, had fallen into decay, and that

{p. 15} 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.

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

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.

Many of the Dutch settlers had come from the Spanish Netherlands, especially from Antwerp, whither they had fled on their expulsion from Spain. It is true that the proclamations of 1532 and 1539 forbade the pseudo-Christians to remain in Antwerp, but they proved ineffective. The prohibition was renewed in 1550, but this time it referred only to those who had not been domiciled for six years. But this too remained a dead letter: "the crypto-Jews are increasing from day to day." They took an active part in the struggle for freedom in which the Netherlands were engaged, and its result forced them to wander to the more northerly provinces. Now it is a remarkable thing that the

{p. 16} 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.

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

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.

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.

But the

{p. 17} 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.

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.

{p. 19} Antwerp lost no small part of its former glory by reason of the departure of the Jews ...

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

{p. 20} 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."

It is the same tale in Hamburg. In the 17th century the importance of the Jews had grown to such an extent that they were regarded as indispensable to the growth of Hamburg's prosperity. On one occasion the Senate asked that permission should be given for synagogues to be built, otherwise, they feared, the Jews would leave Hamburg, and the city might then be in danger of sinking to a mere village. On another occasion, in 1697, when it was suggested that the Jews should be expelled, the merchants earnestly entreated the Senate for help, in order to prevent the serious endangering of Hamburg's commerce.Again, in 1733, in a special report, now in the Archives of the Senate, we may read: "In bill-broking, in trade with jewellery and braid and in the manufacture of certain cloths the Jews have almost a complete mastery, and have surpassed our own people. In the past there was no need to take cognizance of them, but now they are increasing in numbers. There is no section of the great merchant class, the manufacturers and those who supply commodities for daily needs, but the Jews form an important element therein. They have become a necessary evil." To the callings enumerated in which the Jews took a prominent part, we must add that of marine insurance brokers.

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

{p. 21} 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 ...

{p. 22} The transformation of European commerce which has taken place since the shifting of the centre of economic activity owed a tremendous debt to the Jews. ...

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.

{p. 24} 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. Now some 20 per cent. of the ships' cargoes leaving Hamburg were destined for the Iberian Peninsula, and some 30 per cent for Holland.

Take another instance. The Levant trade was the most important branch of French commerce in the 18th century. A contemporary authority informs us that it was entirely controlled by Jews - "buyers, sellers, middlemen, bill-brokers, agents and so forth were all Jews."

In the 16th and 17th centuries, and even far into the 18th, the trade of the Levant as well as that with, and via, Spain and Portugal, was the broadest stream in the world's commerce. This mere generalization goes far to prove how pre-eminent, from the purely quantitative point of view, the Jews were in forwarding the development of international intercourse. Already in Spain the Jews had managed to obtain control of the greater portion of the Levant trade, and everywhere in the Levantine ports Jewish offices and warehouses were to be found. Many Spanish Jews at the time of the expulsion from Spain settled in the East; the others journeyed northwards. So it came about that almost imperceptibly the Levantine trade became associated with the more northerly peoples. ...

{p. 25} nother means by which we may gain a clear conception of what the Jews did for the extension of modern commerce is to discover the kind of commodities in which they for the most part traded. The quality of the commerce matters more than its quantity. It was by the character of their trade that they partially revolutionized the older forms, and thus helped to make commerce what it is to-day.

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. 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.

Moreover, Jews were to be found almost entirely, or at least pre-dominantly, in such branches of trade as were concerned with exportation on a large scale. Nay, I believe it may with justice be asserted that the Jews were the first to place on the world's markets the staple articles of modern commerce. Side by side with the products of the soil, such as wheat, wool, flax, and, later on, distilled spirits, they dealt throughout the 18th century specially in textiles, the output of a

{p. 26} rapidly growing capitalistic industry, and in those colonial products which for the first time became articles of international trade, viz., sugar and tobacco. ...

Perhaps the most far-reaching, because the most revolutionary, influence of the Jews on the development of economic life was due to their trade in new commodities, in the preparation of which new methods supplanted the old. We may mention cotton, cotton goods of foreign make, indigo and so forth. ...

Another great characteristic of "Jew-commerce," one which all later commerce took for its model, was its variety and many-sidedness. When in 1740 the merchants of Montpelier complained of the competition of the Jewish traders, the Intendant replied that if they, the Christians, had such well-assorted stocks as the Jews, customers would come to them as willingly as they went to their Jewish competitors. ...

{p. 27} 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 Jews brought ready money into the country.

{p. 28} We are only now beginning to realize that colonial expansion was no small force in the development of modern capitalism. It is the purpose of this chapter to show that in the work of that expansion the Jews played, if not the most decisive, at any rate a most prominent part.

... 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

{p. 29} India Company. 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," 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. Jews were also Directors of the Company; in short, no colonial enterprise was complete without them. ...

{p. 30} The very discovery of America is most intimately bound up with the Jews in an extraordinary fashion. It is as though the New World came into the horizon by their aid and for them alone, as though Columbus and the rest were but managing directors for Israel. It is in this light that Jews, proud of their past, now regard the story of that discovery, as set forth in the latest researches. These would seem to show that it was the scientific knowledge of Jewish scholars which so perfected the art of navigation that voyages across the ocean became at all possible. Abraham Zacuto, Professor of Mathematics and Astronomy at the University of Salamanca, completed his astronomical tables and diagrams, the Almanach perpetuum, in 1473. On the basis of these tables two other Jews, Jose Vecuho, who was Court astronomer and physician to John II of Portugal, and one Moses the Mathematician (in collaboration with two Christian scholars), discovered the nautical astrolabe, an instrument by which it became possible to measure from the altitude of the sun the distance of a ship from the Equator. Jose further translated the Almanack of his master into Latin and Spanish. The scientific facts which prepared the way for the

{p. 31} 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.

But what caps all - Columbus himself is claimed to have been a Jew. ...

{p. 32} The first traders in America were Jews. The first industrial establishments in America were those of Jews. Already in the year 1492 Portuguese Jews settled in St. Thomas, where they were the first plantation owners on a large scale; they set up many sugar factories and gave employment to nearly three thousand Negroes. ...

{p. 33} 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.

From St. Thomas, or possibly from Madeira, where they had for a long time been engaged in the sugar trade, the Jews transplanted the industry to Brazil, the largest of the American colonies. ... Up to about the middle of the 17th century all the large

{p. 34} sugar plantations belonged to Jews, and contemporary travellers report as to their many-sided activities and their wealth. Thus Nieuhoff, who travelled in Brazil from 1640 to 1649, says of them: "Among the free inhabitants of Brazil that were not in the (Dutch West India) Company's service the Jews were the most considerable in number, who had transplanted themselves thither from Holland. They had a vast traffic beyond the rest; they purchased sugar-mills and built stately houses in the Receif. They were all traders, which would have been of great consequence to the Dutch Brazil had they kept themselves within the due bounds of traffic." Similarly we read in F. Pyrard's Travels: "The profits they make after being nine or ten years in those lands are marvellous, for they all come back rich." ...

{p. 35} 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. ...

{p. 38} At first sight it would seem as if the economic system of North America was the very one that developed independently of the Jews. Often enough, when I have asserted that modern capitalism is nothing more or less than an expression of the Jewish spirit, I have been told that the history of the United States proves the contrary. The Yankees themselves boast of the fact that they throve without the Jews.

{p. 39} ... the number of Jews who took part in American business life was never so small as would appear at the first glance. It is a mistake to imagine that because there are no Jews among the half-dozen well-known multi-millionaires, male and female, who on account of the noise they make in the world are on all men's lips, therefore American capitalism necessarily lacks a Jewish element. To begin with, even among the big Trusts there are some directed by Jewish hands and brains. Thus, the Smelters' Trust, which in 1904 represented a combination with a nominal capital of 201,000,000 dollars, was the creation of Jews - the Guggenheims. Thus, too, in the Tobacco Trust (500,000,000 dollars), in the Asphalt Trust, in the Telegraph Trust, to mention but a few, Jews occupy commanding positions. Again, very many of the large banking-houses belong to Jews, who in consequence exercise no small control over American economic life. Take the Harriman system, which had for its goal the fusion of all the American railways. It was backed to a large extent by Kuhn, Loeb & Co., the well-known banking firm of New York. Especially influential are the Jews in the West. California is for the most part their creation. At the foundation of the State Jews obtained distinction as Judges, Congressmen, Governors, Mayors, and so on, and last but not least, as business men. ...

{p. 40} During the gold-mining period Jews were the intermediaries between California and the Eastern States and Europe. The important transactions of those days were undertaken by such men as Benjamin Davidson, the agent of the Rothschilds; Albert Priest, of Rhode Island; Albert Dyer, of Baltimore; the three brothers Lazard, who established the international banking-house of Lazard Freres of Paris, London and San Francisco; the Seligmans, the Glaziers and the Wormsers. Moritz Friedlaender was one of the chief "Wheat kings." Adolph Sutro exploited the Cornstock Lodes. Even to-day the majority of the banking businesses, no less than the general industries, are in the hands of Jews. Thus, we may mention the London, Paris and American Bank (Sigmund Greenbaum and Richard Altschul); the Anglo-Californian Bank (Philip N. Lilienthal and Ignatz Steinhart); the Nevada Bank; the Union Trust Company; the Farmers' and Merchants' Bank of Los Angeles; John Rosenfeld's control of the coalfields; the Alaska Commercial Company, which succeeded the Hudson Bay Company; the North American Commercial Company, and many more. ...

{p. 41} 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. ...

{p. 42} The {p. 43} United States would never have won complete independence has 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.

No. What I have in mind is the special service which the Jews rendered the North American colonies, one peculiar to the American Continent - a service which indeed gave America birth. I refer to the simple fact that during the 17th and 18th centuries the trade of the Jews was the source from which the economic system of the colonies drew its life-blood. As is well known, England forced her colonies to purchase all the manufactured articles they needed in the Mother-country. ...

{p. 44} For what we call Americanism is nothing else, if we may say so, than the Jewish spirit distilled.

But how comes it that American culture is so steeped in Jewishness? The answer is simple - through the early and universal admixture of Jewish elements among the first settlers. We may picture the process of colonizing somewhat after this fashion. A band of determined men and women - let us say twenty families - went forth into the wilds to begin their life anew. Nineteen were equipped with plough and scythe, ready to clear the forests and till the soil in order to earn their livelihood as husbandmen. The twentieth family opened a store ... It was they, too, who were most likely in possession of ready cash, and in case of need could therefore be useful to the others by lending them money. Very often the store had a kind of agricultural loan-bank as its adjunct, perhaps also an office for the buying and selling of land. So through the activity of the twentieth family the farmer in North America was from the first kept in touch with the money and credit system of the Old World. ...

{p. 53} The wealthy Jews, who in the reign of the Emperor Leopold received permission to resettle 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.

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

{p. 54} Jews; that Jews were royal treasurers and money-lenders ...

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; Delmonte, a family of ambassadors (Lords of Schoonenberg); the wealthy Suasso, who in 1688 lent William two million gulden, and others.

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.

Next, English finance was at this time also very extensively controlled by Jews. 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

{p. 55} was Antonio Fernandez Carvajal ...

... 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

{p. 56} 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 the same story in France, and the powerful position held by Samuel Bernard in the latter part of the reign of Louis XIV and in the whole of that of Louis XV may serve as one example among many. We find Louis XIV walking in his garden with this wealthy Jew, "whose sole merit," in the opinion of one cynical writer, "was that he supported the State as the rope does the hanged man." He financed the Wars of the Spanish Succession; he aided the French candidate for the throne of Poland; he advised the Regent in all money matters. It was probably no exaggeration when the Marquis de Dangeau spoke of him in one of his letters as "the greatest banker in Europe at the present time." ...

It is easier to trace Jewish influence in finance in

{p. 57} Germany and Austria through that clever invention - the status of "Court Jew." Though the law in these countries forbade Jews to settle in their boundaries, yet the princes and rulers kept a number of "privileged" Jews at their courts. According to Graetz, the status of "Court Jew" was introduced by the Emperors of Germany during the Thirty Years' War.

{p. 59} 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

{p. 60} contributed to the removal of their own monopoly as financiers.

{p. 61} 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.

The Origin of Securities

Securities represent the standardization of personal indebtedness. 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. ...

{p. 64} 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.

The security gives the owner the right to participate in the capital and the profit of a concern with which

{p. 63} 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.

So, in short, with all credit instruments: an impersonal relationship is established between either an individual or a corporation on the one hand (the receiver of moneys), and an unknown body of people (we speak of "the public") on the other - the lender of moneys.

{p. 65} 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). 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. 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 : -

{quote} 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. That which we say of the inhabitants of Florence holds good also

{p. 66} of the other merchants of the same Spanish and Portuguese nation, who dwell in Flanders, Lyons, Rome, Naples, Sicily and other countries, who lay themselves out to do business with us, not only in exchanges but in sending hither merchandise of Flanders, selling corn from Sicily and buying other merchandise to transport to other countries. {endquote}

A further development in the endorsing of bills appears to have taken place at the fairs of Genoa in the 16th century. Who, we may ask, were the "Genoese," met with everywhere throughout that century, but especially at the famous fairs of Besancon, dominating the money market, and who all of a sudden showed a remarkable genius for business and gave an impetus to the growth of new methods, hitherto unknown, for cancelling international indebtedness? It is true that the ancient wealthy families of Genoa were the principal creditors of the Spanish Crown as well as of other needy princes. But to imagine that the descendants of the Grimaldis, the Spinolas, the Lercaras exhibited that ex-traordinary commercial ability which gave a special character to the activity of the Genoese in the 16th century; to think that the old nobility gadded about the fairs at Besancon or elsewhere, or even sent their agents with never-failing regularity - this appears to me an assumption hardly warranted without some very good reason. Can the explanation be that the Jews brought new blood into the decrepit economic body of Genoa? We know that fugitives from Spain landed at Genoa, that some of the settlers became Christians, that the rest were admitted into Novi, a small town near Genoa, and that the Jews of Novi did business with the capital; we know, too, that the newcomers were "for the most part intelligent Jewish craftsmen, capitalists, physicians," and that in the short space of time between their arrival and 1550 they

{p. 67} 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.

Securities (Stocks and Shares)

If we should wish to speak of securities in those cases where the capital of a business concern is split up into many parts, and where the liability of the capitalists is limited, we have ample justification for so doing in the case of the Genoa Maones, in the 14th century, the Casa di San Giorgio (1407) and the important trading companies of the 17th century. But if stress is laid on the standardization of the credit-relationship, it will not be before the 18th century that we shall find instances of joint-stock enterprise and of securities. ... In the English East India Company, for instance, it was not until 1650 that shares could be transferred to strangers, but they had to become members of the Company.

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

{p. 68} 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.

The modern form of security can therefore not be found before the 18th century. If now it be asked what share did the Jews have in the extension of this form of credit in modern times, the reply is obvious enough. During the last hundred and fifty or two hundred years, Jews have been largely instrumental in bringing about the standardization of what was before a purely personal relationship between the holder of stock and the company in which he participated. I am bound to admit, however, that I cannot adduce direct proofs in support of my thesis. But indirectly the evidence is fairly conclusive. Jews were great speculators, and speculation must of necessity tend to substitute for the security wherein the holder is specified one which has no such limitation. A little reflection will show therefore that Jews must have had no small influence on the standardization of securities. In some cases it may even be demonstrated that speculation was responsible for the change from securities of differing amounts to those of equal value. The Dutch East India Company is a case in point. Originally its shares were of all values; later only 3000 florin shares were issued.


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

{p. 69} specific deposit a new type of credit instrument, the modern banknote, came into being. There were banknotes in existence long before that. But they bore the depositor's name and referred to his money. I believe that in all probability the personal banknote became a general (impersonal) one in Venice about the beginning of the 15th century. There are on record instances dating from that time of banks making written promises to pay over and above the sums deposited with them. An edict of the Venetian Senate as early as 1421 made it an offence to deal in such documents. The first permission to establish a bank was granted to two Jews in 1400, and their success was so great that the nobili made haste to follow their example. The question arises, may these two Jews be regarded as the fathers of the modern (impersonal) banknote?

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. In the 16th century their number was estimated at 6000; and Jewish manufacturers employed 4000 Christian workmen. 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

{p. 70} 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. 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?

Furthermore, Jews were prominent and active figures wherever in the 17th century banks were established. They participated in the foundation of the three great banks of that period - the Bank of Amsterdam, the Bank of England and the Bank of Hamburg. But as none of these owed its origin to purely commercial causes, I shall not emphasize their importance in connexion with the Jews. The facts, nevertheless, are interesting, and I would therefore state that the experience which the Jews gathered when the Bank of Amsterdam was founded served them in good stead when in 1619 the Hamburg Bank came into being. No less than forty Jewish families took shares in the new concern. As for the Bank of England, the latest authorities on its history are agreed that the suggestion for the Bank came from Jewish immigrants from Holland.

Public Debt Bonds

The earliest bonds issued for public loans were addressed to some individual lender, and it was long before they changed their character and became "general" instruments. In Austria, to take one example, it was not until the Debt of 1761 was contracted that the bonds

{p. 71} had coupons attached which gave the bearer the right to receive interest. Previous to that, the bond was of the nature of a private agreement; the Crown or the Treasury was the debtor of some specific lender.

To what extent the Jews were responsible for the "standardization" of public credit it is difficult to estimate. So much is certain, that William III's advisers were Jews; that public borrowing in the German States was commenced on the model of Holland, most probably through the influence of Dutch Jews who, as we have already seen, were the chief financiers in German and Austrian lands. Speaking generally, Dutch Jews were most intimately concerned in European finance in the 18th century.

As for private loan-bonds or mortgage-deeds, we know very little of their history, and it is almost impossible to compute the direct influence of the Jews here. But indirectly the Jews were, in all likelihood, the originators of this species of credit instrument, more especially of mortgage deeds. We have it on record that Dutch bankers, from about the middle of the 18th century onward, advanced money to colonial planters on the security of their plantations. Mortgage-deeds of this kind were bought and sold on the Stock Exchange, just like Public Debt bonds.

{p. 73} The only question is. Can we possibly deduce modern credit instruments from Rabbinic law? I believe we can. In the first place, the Bible and the Talmud are both acquainted with credit instruments. The Biblical passage is in the Book of Tobit, iv. 20; v. 1, 2, 3; ix. 1, 5. The best known passage in the Talmud is as follows (Baba Bathra, 172): -

"In the court of R. Huna a document was once produced to this effect: 'I, A.B., son of C.D., have borrowed a sum of money from you.' R. Huna decided that 'from you' might mean 'from the Exilarch or even from the King himself.'"

Second, in later Jewish law, as well as in Jewish commercial practice, the credit instrument is quite common. As regards practice, special proof is hardly necessary; and as for theory, let me mention some Rabbis who dealt with the problem.

First in importance was Rabbenu Asher (1250?1327), who speaks of negotiable instruments in his Responsa (lxviii. 6, 8). "If A sends money to B and C, and notes in his bill 'payable to bearer by B and C,' payment must be made accordingly." So also R. Joseph Caro in his Choshen Mishpat: "If in any bill no name is mentioned but the direction is to 'pay bearer,' then whoever presents the bill receives payment" (lxi. 10; cf. also 1.; lxi. 4, 10; lxxi. 23). R. Shabbatai Cohen in his Shach. (1. 7; lxxi. 54) is of the same opinion.

Thirdly, it is very likely that the Jews, in the course of business, independently of Rabbinic laws, developed a form of credit instrument which was quite impersonal and general in its wording. I refer to. the Mamre (Mamram, Momran). It is claimed that this document first appeared among the Polish Jews in the 16th century, or even earlier. Its form was fixed, but a space was left for the name of the surety, sometimes, too, for the amount in

{p. 74} question. There is no doubt that such documents were in circulation during three centuries and were very popular, circulating even between Christians and Jews. Their value as evidence consists in that they already had all the characteristics of modern instruments:

(1) the holder put the document in circulation by endorsement; (2) there is no mention of the personal relationship of the debtor and the creditor; (3) the debtor may not demand proof of endorsement or transfer; (4) if the debtor pays his debt without the presentation of the Mamre having been made to him, it is considered that he has not really discharged his obligation; and lastly (5) the cancellation of the document is almost the same as it is to-day - if it is lost or stolen the holder of the document informs the debtor; public notice is given by a declaration posted up for four weeks in the synagogue, wherein the bearer of the instrument is requested to come forward; at the end of four weeks, if nothing happens, the creditor demands payment of the debtor.

In the fourth place, it would appear that Jewish influences were potent in the development of many weighty points of legal practice. Let me mention some.

(1) During the 16th century there circulated in different parts of Europe credit instruments with blanks for filling in names. What was their origin? Is there not a possibility that they emanated from Jewish commercial circles, having been modelled on the pattern of the Mamre? They are met with in the Netherlands, in France and in Italy. In the Netherlands they appeared towards the beginning of the 16th century at the Antwerp fairs, just when the Jews began to take a prominent part in them. An Ordinance of the year 1536 states explicitly that "at the Antwerp fairs payment for commodities was made by

{p. 75} promissory notes, which might be passed on to third persons without special permission." It would seem from the wording that the practice of accepting notes in payment for goods was a new one. What sort of documents were these notes? Can they have been Christian Mamrem? Even more Jewish were the documents in vogue in Italy a century later. I mean the first known "open" note, issued by the Jewish bill-brokers, Giudetti, in Milan. The note was for 500 scudi, payable through John Baptist Germanus at the next market day in Novi to the personal order of Marcus Studendolus in Venice for value received. Studendolus sent the bill to de Zagnoni Brothers in Bologna "with his signature, leaving a sufficient blank space at the end for filling in the amount, and the name of the person in whose favour the de Zagnonis preferred payment to be made." The recorder of this instance remarks that "Italian financial intercourse could hardly have thought of a facility of this kind, had there not been a model somewhere to imitate. Such a model is found in France, where from the 17th century onward bearer bonds were in general circulation." The question at once suggests itself, how did this document arise in France. Will the example of Holland account for it? Even in Italy it may be a case of Maranno influence - Studendolo(?) in Venice, Giudetti in Milan!

(2) Of very great significance in the development of modern credit instruments is the Antwerp Custom of 1582, wherein it is for the first time admitted that the holder of a note has the right of suing in a court of law. This conception spread rapidly from Antwerp to Holland - as rapidly, indeed, as the Jewish refugees from Belgium settled down among the Dutch.

(3) In Germany the first State to adopt credit instruments was Saxony. In the year 1747 an adventurer of the name of Bischopfield suggested to the Minister of

{p. 76} Finance the plan of a Public Loan, and it seems that Bischopfield was in communication with Dutch Jews at the time. Further, an ordinance of 20th September 1757 forbade Dutch Jews to speculate in Saxon Government Stock. All of which points to Jewish influence - on the one side of the Dutch Jews, and on the other of Polish Jews, owing to the connexion of the royal houses of Saxony and Poland. So great was this influence that one authority comes to the definite conclusion that the Mamre became the model for credit instruments.

(4) Among the instruments wherein the name of the holder was inserted we must include marine insurance policies. It is recorded that the Jewish merchants of Alexandria were the first to use the formulae "o qual si voglia altera persona," "et qwsvis alia persona" and "sive quamlibet aliam personam" ("or to any other person desired"). Now why did the Jewish merchants of Alexandria adopt this legal form? The answer to this question is of the gravest import, more especially as I believe that the causes for which we are seeking were inherent in the conditions of Jewish life.

(5) That leads me to my fifth consideration. It was to the interest of the Jews to a very large degree - in some respects even it was to the interest of the Jews alone - to have a proper legal form for credit instruments. For what was it that impelled the Jewish merchants of Alexandria to make out their policies to bearer? Anxiety as to the fate of their goods. Jewish ships ran the risk of capture by Christian pirates and the fleets of His Catholic Majesty, who accounted the wares of Jews and Turks as legitimate booty. Hence the Jewish merchants of Alexandria inserted in their policies some fictitious Christian name, Paul or Scipio, or what you will, and when

{p. 77} the goods arrived, received them in virtue of the "bearer" formula in their policies.

How often must the same cause have actuated Jews throughout the Middle Ages! How often must they have endeavoured to adopt some device which concealed the fact that they were the recipients either of money or of commodities sent from a distance. What more natural than that they should welcome the legal form which gave "the bearer" the right of claiming what the document he had entitled him to. This formula made it possible for fortunes to vanish if the Jews in any locality passed through a storm of persecution. It enabled Jews to deposit their money wherever they wanted, and if at any time it became endangered, to remove it through the agency of some fictitious person or to transfer their rights in such a way as not to leave a trace of their former possessions. It may seem inexplicable that while throughout the Middle Ages the Jews were deprived of their "all" at very short intervals, they managed to become rich again very quickly. But regarded in the light of our suggestion, this problem is easily explained. The fact was that the Jews were never mulcted of their "all"; a good portion of their wealth was transferred to a fictitious owner whenever the kings squeezed too tight.

Later, when the Jews commenced to speculate in securities and commodities (as we shall see in due course) it was only to be expected that they would extend the use of this form of bond, more particularly in the case of securities. It is obvious that if a big loan is subscribed by a large number of comparatively small contributors bearer bonds offer facilities of various kinds.

The remark of a Rabbi here and there demonstrates this conclusively. One passage in the commentaries of

{p. 78} R. Shabbatai Cohen is distinctly typical. "The purchaser of a bond," he says, "may claim damages against the debtor if he pays the debt without obtaining a receipt, the reason being that as there is no publicity in the transaction this practice is detrimental to dealings in such instruments. It is true that Rabbenu Asher and his school expressed no view concerning Shetarot (instruments) of all kinds, which the Rabbis introduced in order to extend commerce. That is because dealings in such instruments were not very common, owing to the difficulty of transfer. But the authorities were thinking only of personal bonds. In the case of bearer bonds, the circulation of which at the present time (i.e., the 17th century) is greater far than that of commodities, all ordinances laid down by the Rabbis for the extension of commerce are to be observed."

(6) Here again we touch a vital question. I believe that if we were to examine the whole Jewish law concerning bearer bonds and similar instruments we should find - and this is my sixth point - that such documents spring naturally from the innermost spirit of Jewish law, just as they are alien to the spirit of German and Roman law. It is a well-known fact that the specifically Roman conception of indebtedness was a strictly personal one. The obligatio was a bond between certain persons. Hence the creditor could not transfer his claim to another, except under exceedingly difficult conditions. True, in later Roman law the theory of delegation and transmission was interpreted somewhat liberally, yet the root of the matter, the personal relationship, remained unchanged.

In German law a contract was in the same way personal; nay, to a certain extent it was even more so than in Roman law. The German principle on the point was clear enough. The debtor was not obliged to render

{p. 79} payment to any one but the original creditor to whom he had pledged his word. There could in no wise be transference of claim - as was the case in English law until 1873. It was only when Roman law obtained a strong hold on Germany that the transfer of claims first came into vogue. The form it took was that of "bearer bonds" - the embodiment of an impersonal credit relationship.

It is admitted that the legal notion underlying all "bearer" instru-ents - that the document represents a valid claim for each successive holder - was not fully developed either in the ancient world or in the Middle Ages. But the admission holds good only if Jewish law be left out of account.

Jewish law was certainly acquainted with the impersonal credit relationship. Its underlying principle is that obligations may be towards unnamed parties, that you may carry on business with Messrs. Everybody. Let us examine this principle a little more closely. Jewish law has no term for obligation: it knows only debt ("Chov") and demand ("Tvia"). Each of these was regarded as distinct from the other. That a demand and a promise were necessarily bound up with some tangible object is proved by the symbolic act of acquisition. Consequently there could be no legal obstacles to the transfer of demands or to the making of agreements through agents. There was no necessity therefore for the person against whom there was a claim to be defined, the person in question became known by the acquisition of certain commodities. In reality claims were against things and not against persons. It was only to maintain a personal relationship that the possessor of the things was made responsible. Hence the conception that just as an obligation may refer to some specified individual, so also it may refer to mankind as a whole.

{p. 80} Therefore a transference of obligations is effected merely by the transference of documents.

So much would appear from the view held by Auerbach. Jewish law is more abstract in this respect than either Roman or German law. Jewish law can conceive of an impersonal, "standardized" legal relationship. It is not too much to assume that a credit instrument such as the modern bearer bond should have grown out of such a legal system as the Jewish. Accordingly, all the external reasons which I have adduced in favour of my hypothesis are supported by what may be termed an "inner" reason.

And what is this hypothesis? That instruments such as modern bearer bonds owe their origin chiefly to Jewish influences.

II Buying and Selling Securities

1. The Evolution of a Legal Code Regulating Exchange

In modern securities we see the plainest expression of the commercial aspect of our economic life. Securities are intended to be circulated, and they have not served their true purpose if they have not been bought and sold. Of course it may be urged that many a security rests peacefully in a safe, yielding an income to its owner, for whom it is a means to an end rather than a commodity for trading in. The objection has a good deal in it. A security that does not circulate is in reality not a security at all; a promissory note might replace it equally well. The characteristic mark of a security is the ease with which it may be bought and sold.

{p. 81} In modern times our highly organized system of intercommunication, and especially dealings in securities and credit instruments of all kinds, has facilitated the removal of old and the rise of new legal relationships. But this is contrary to the spirit of Roman and German law, both of which placed obstacles in the way of commodities changing hands. Indeed, under these systems any one who has been deprived of a possession not strictly in accordance with law may demand its return from the present owner, without the need of any compensation, even though his bona-fides be established. In modern law, on the other hand, the return of the possession can be made only if the claimant pays the present owner the price he gave for it - to say nothing of the possibility that the original owner has no claim whatever against the present holder.

If this be so, whence did the principle, so alien to the older systems, enter into modern law? The answer is that in all probability it was from the Jewish legal code, in which laws favouring exchange were an integral part from of old.

Already in the Talmud we see how the present owner of any object is protected against the previous owners. "If any one," we read in the "Mishna" (Baba Kama, 114b and 115a), "after it has become known that a burglary took place at his house finds his books and utensils in the possession of another, this other must

{p. 82} declare on oath how much he paid for the goods, and on his receiving the amount returns them to the original owner. But if no burglary has taken place, there is no need for this procedure, for it is then assumed that the owner sold the goods to a second person and that the present owner bought them." In every case, therefore, the present owner obtains compensation, and in certain given circumstances he retains the objects without any further ado. The "Gamara," it is true, wavers somewhat in the discussion of the passage, but in general it comes to the same conclusion. The present owner must receive "market protection," and the previous owner must pay him the price he gave.

The attitude of the Talmud, then, is a friendly one towards exchange, and the Jews adopted it throughout the Middle Ages. But more than that - and this is the important point - they succeeded quite early in getting the principle recognized by Christian law-courts in cases where Jews were concerned. For centuries there was a special enactment regulating the acquisition of moveables by Jews; it received official recognition for the first time in the "Privileges" issued by King Henry IV to the Jews of Speyers in 1090. "If a commodity that has been stolen," we read therein, "is found in the possession of a Jew who declares that he bought it, let him swear according to his law how much he paid for it, and if the original owner pays him the price, the Jew may restore the commodity to him." Not only in Germany, but in other lands too (in France already about the middle of the 12th century), is this special ordinance for Jews to be met with.

{p. 116} ... wherever Jews appeared as business competitors, complaints were beard that Christian traders suffered in consequence: their livelihood, we are told, was endangered, the Jews deprived them of their profits, their chances of existence were less-ened because their customers went to Jews, and so forth.

A few extracts from documents of the 17th and 18th centuries, the period which concerns us most, will illustrate what has been mentioned. Let us turn first to Germany. In 1672 the Estates of Brandenburg com-plain that the Jews "take the bread out of the mouths of the other inhabitants." Almost the same phrase is found in the petition of the merchants of Danzig, of March 19th, 1717. In 1712 and 1717 the good citizens of the old town of Magdeburg object to the admission of Jews into their midst, "because the welfare of the city, and the success of traders, depends upon the fact that ... no Jewish dealing is permitted here."

In 1740 Ettenheim made a communication to its Bishop, wherein it was stated that "as is well-known, the Jews' low ways make only for loss and undoing." The same idea is voiced in the proverb, "All in that city doth decay, where Jews are plentiful as hay." In the preamble to the Prussian Edict of 1750, mention is

{p. 117} made that "the big merchants of our town complain ... that the Jews who deal in the same commodities as they do, lessen their business considerably." It was the same in the South of Germany. In Nuremberg, for example, the Christian traders had to sit by and see their customers make purchases of Jews. ...

That Jews all through the 18th century were refused admission to the merchant-gilds, no less than to the craft-gilds, is too well-known to need further emphasis.

Was it different in England? By no means. Says Josiah Child, "The Jews are a subtil people ... depriving the English merchant of that profit he would otherwise gain"; they carry on their business "to the prejudice of the English merchants." ...

From Marseilles to Nantes the same tones were heard in France. The merchants of the latter city in 1752 bewailed their fate in the following terms: "The prohibited trade carried on by these strangers ... has

{p. 118} caused considerable loss to the merchants of this town, so much so, that if they are not favoured by the good-will of these gentry, they are in the predicament of being able neither to provide for their families nor to pay their taxes." Seven years earlier, in 1745, the Christian traders of Toulouse regretfully declared that "everybody runs to the Jewish traders." "We beseech you to bar the onward march of this nation, which otherwise will assuredly destroy the entire trade of Languedoc" - such was the request of the Montpelier Chamber of Commerce. Their colleagues in Paris compared the Jews to wasps who make their way into the hive only to kill the bees, rip open their bodies and extract the honey stored in their entrails.

In Sweden, in Poland, the same cry resounded. In 1619 the civic authorities of Posen complained, in an address to King Sigismund, that "difficulties and stumbling-blocks are put in the way of merchants and craftsmen by the competition of Jews."

But all this does not suffice. We want to know more than that the Jews endangered the livelihood of the others. We want to find out the reason for this. Why were they able to become such keen competitors of the Christian traders? ...

{p. 119} When it was asserted that Jews were cheats, that was only an epithet to describe the fact that Jews in their commercial dealings did not always pay regard to the existing laws or customs of trade. Jewish merchants offended in neglecting certain traditions of their Christian compeers, in (now and again) breaking the law, but above all, in paying no heed to commercial etiquette. Look closely into the specific accusations hurled against Jewish traders, examine their innermost nature, and you shall find that the conflict between Jewish and Christian merchants was a struggle between two outlooks, between two radically differing - nay, opposite - views on economic life.

To understand this conflict in its entirety, it will be necessary to obtain some idea of the spirit that dominated economic activities, activities in which from the 16th century onwards the Jews were obtaining a surer footing from day to day. So much did they seem to

{p. 120} be out of harmony with that spirit that everywhere they were looked upon as a disturbing element.

During the whole of the period which I have described as the "early capitalistic age," and in which the Jews began to make their influence felt, the same fundamental notions generally prevailed in regard to economic life as characterized the Middle Ages - feudal relationships, manual labour, three estates of the realm, and so forth.

The centre of this whole was the individual man. Whether as pro ducer or as consumer, his interests determined the attitude of the com-munity as of its units, determined the law regulating economic activities and the practices of commercial life. Every such law was personal in its intent; and all who contributed to the life of the nation had a personal outlook. Not that each person could do as he liked. On the contrary, a code of restrictions hedged about his activities in every direction. But the point is that the restrictions were born of the individualistic spirit. Commodities were produced and bought and sold in order that consumers might have their wants sufficiently satisfied. On the other hand, producers and traders were to receive fair wages and fair profits. What was fair, and what sufficient for your need, tradition and custom determined.

And so, producer and trader should receive as much as was demanded by the standard of comfort in their station in life. That was the mediaeval view; it was also the view current in the early capitalistic age, even where business was carried on along more or less modern lines. We find its expression in the industrial codes of the day, and its justification in the commercial literature.

Hence, to make profit was looked upon by most people throughout the period as improper, as "unchristian"; the old economic teaching of Thomas Aquinas was observed, at least officially. The religious or ethical rule was still supreme; there was as yet no sign of the liberation of economic life from its religious and ethical bonds. Every action, no matter in what sphere, was done with a view to the Highest Tribunal - the will of God. Need it be pointed out that the attitude of Mammon was as opposed to this as pole is to pole?

Producer and trader should receive sufficient for their need. One outstanding result of this principle was strictly to circumscribe each man's activity in his locality. Competition was therefore quite out of the question. ...

{p. 122} To take away your neighbour's customers was contemptible, un-christian, and immoral. A rule for "Merchants who trade in commodities" was: "Turn no man's customers away from him, either by word of mouth or by letter, and do not to another what you would not have another do to you." It was, however, more than a rule; it became an ordinance, and is met with over and over again. In Mayence its wording was as follows: "No one shall prevent another from buying, or by offering a higher price make a commodity dearer, on pain of losing his purchase; no one shall interfere in another's business undertaking, or carry on his own on so large a scale as to ruin other traders." In Saxony it was much. the same. "No shopkeeper shall call away the customers from another's shop, nor shall he by signs or motions keep them from buying."

But to attract customers even without interfering with your neighbour's business was regarded as unworthy. As late as the early 18th century in London itself it was not considered proper for a shop-keeper to dress his window tastefully, and so lure purchasers. ...

To the things that were not permitted belonged also advertising your business and praising your wares. The gentle art of advertising first appeared in Holland sometime about the middle of the 17th century, in England towards its end, in France much later.

{p. 124} To praise your goods or to point out wherein your business was superior to others was equally nefarious. But the last word in commercial impropriety was to announce that your prices were lower than those of the man opposite. 'To undersell" was most ungentlemanly: "No blessing will come from harming your neighbour by underselling and cutting prices." Bad as underselling itself was in the eyes of the people of those days, it was beneath contempt to advertise it. "Since the death of our author," say the editors of the fifth edition (1745) of De Foe's Complete English Tradesman, "this underselling practice is grown to such a shameful height that particular persons publickly advertise that they undersell the rest of the trade." It may be asked, Why were the editors so concerned about the matter? The reason is manifest in a subsequent passage, "We have had grocers advertising their underselling one another at a rate a fair trader cannot sell for and live." It is the old cry: fixed profits, a fixed livelihood, a fixed production and fixed prices.

{p. 125} Sir Josiah Child appears to have been in the minority ... when he formulated the demand that every manufacturer should be allowed to judge for himself as to the kind of commodity, and the quality, that he brought into the market. It is curious enough nowadays to read Child's plea for the right of the manufacturer to make shoddy goods. "If we intend to have the trade of the world," he cries, "we must imitate the Dutch, who make the worst as well as the best of all manufactures, that we may be in a capacity of serving all markets and all humours."

{p. 126} What manner of world was that in which opinions such as these predominated? If we had to describe it in a word, we should say that it was "slow." Stability was its bulwark and tradition its guide. The individual never lost himself in the noise and whirl of business activity. He still had complete control of himself; he was not yet devoid of that native dignity, which does not make itself cheap for the sake of profit. Trade and commerce were everywhere carried on with a dash of personal pride.

{p. 127} To-day one of the best signs of a flourishing trade is a universal hurry and scurry, but towards the end of the 18th century that was regarded as a sure token of idleness. The man of business was deliberately slow of stride. "In Paris people are in one continuous haste - because there is nothing to do there; here (in Lyons, the centre of the silk industry, and a town of some commercial importance) our walk is slow because every one is busy." ...

This was the world the Jews stormed. At every step they offended against economic principles and the economic order. That seems clear enough from the unanimous complaints of the Christian traders everywhere.

But were the Jews the only sinners in this respect?

{p. 129} I believe that the specifically Jewish characteristic consisted in that it was not an individual here and there who offended against the prevailing economic order, but the whole body of Jews. Jewish commercial conduct reflected the accepted point of view among Jewish traders. Hence Jews were never conscious of doing wrong, of being guilty of commercial immorality; their policy was in accordance with a system, which for them was the proper one. They were in the right; it was the other outlook that was wrong and stupid.

{p. 131} We find that the Jew rises before us unmistakably as more of a business-man than his neighbour; he follows business for its own sake; he recognizes, in the true capitalistic spirit, the supremacy of gain over all other aims.

{p. 132} But the objection may be urged that among Christians also money was no less valued, only the fact was not admitted; people were hypocritical. There is perhaps a certain element of truth in this objection. In that case I should say what was specifically Jewish was the naivete with which money was made the pivot of

{p. 133} life; it was a matter of course; no attempt was made to hide it. ... Not his "usury" differentiated him from the Christian, not that he sought gain, not that he amassed wealth; only that he did all this openly, not thinking it wrong

{p. 148} But we have not yet done with the inventory of methods adopted by Jews to lower prices. We now turn to those which were of equal fundamental importance with the others already mentioned, but which differed from them materially. While the first brought about only apparent reductions, or actual reductions at other people's expense, these produced lower prices really and absolutely. What were they? Innovations which decreased the total cost of production in some way or other. Either the producer or the dealer was content with less for himself, or the actual expenses of production were reduced in that wages were lowered or the manufacturing and distributing processes made more efficient. That all these means of cheapening commodities were adopted by Jews, and by them first, is amply evidenced by records in our possession. First, the Jew could sell more cheaply because he was satisfied with less than the Christian trader. Unprejudiced observers remarked this fact on many occasions, and even the competitors of the Jews admitted its truth. Let us once again quote the Magdeburg official report. The Jews sell cheaply, "whereby the merchants must suffer loss. For they need more than the Jew, and, therefore, must carry on their business in accordance with their requirements."

{p. 153} How are we to explain that even before the era of modern capitalism, Jews showed a capacity for adopting its {p. 154} principles? The question must be expanded into a much larger one. What was it that enabled the Jew to exercise so decisive an influence in the process that made modern economic life what it is, an influence such as we have observed in the foregoing enquiry?

{p. 191} Only recently Max Weber demonstrated the connexion between Puritanism and Capitalism. In fact. Max Weber's researches are responsible for this book. For any one who followed

{p. 192} them could not but ask himself whether all that Weber ascribes to Puritanism might not with equal justice be referred to Judaism, and probably in a greater degree; nay, it might well be suggested that that which is called Puritanism is in reality Judaism.

{p. 193} They lived always in trembling awe, in awe of God's wrath. ... One can understand it when one thinks of the Jewish God - fearful, awful, curse-uttering Jehovah. Never in all the world's literature, either before or since, has humanity been threatened with so much evil as Jehovah promises (in the famous 28th chapter of Deuteronomy) to those who will not keep His commandments.

But this mighty influence (the fear of God) did not stand alone. Others combined with it, and together they had the tendency of almost forcing the Jews to obey the behests of their religion most scrupulously. The first of these influences was their national fate. ...

{p. 194} Without a State, without their sanctuary, the Jews, under the leadership of the Pharisees, flocked around the Law (that "portable Fatherland," as Heine calls it), and became a religious brotherhood, guided by a band of pious Scribes, pretty much as the disciples of Loyola might gather around them the scattered remnants of a modern State. The Pharisees now led the way. ... the more the Jews were shut off, or shut themselves off, from the people among whom they dwelt, the more the authority of the Rabbis increased, and the more easily could the Jews be forced to be faithful to the Law. ...

{p. 195} We see, then, what forces were at work to make the Jews right down to modern times a more God-fearing people than any other, to make them religious to their inmost core, or, if the word "religious" be objected to, to keep alive among high and low a general and strict observation of the precepts of their religion. And for our purpose, we must regard this characteristic as applicable to all sorts and conditions of Jews, the Marannos of the 16th, 17th and 18th centuries included. We must look upon these too as orthodox Jews.

{p. 196} In modern times old Amschel Rothschild, who died in 1855, did the same. He lived strictly according to Jewish law and ate no morsel at a stranger's table, even though it were the Emperor's. One who knew the Baron well says of him that "he was looked upon as the most pious Jew in all Frankfort. Never have I seen a man so afflict himself - beating his breast, and crying to Heaven - as Baron Rothschild did in the synagogue on the Day of Atonement. The continual praying weakens him so that he falls into a faint. Odorous plants from his garden are held to his nose to revive him." His nephew William Charles, who died in 1901 and who was the last of the Frankfort Rothschilds, observed all the religious prescriptions in their minutest detail. The pious Jew is forbidden to touch any object which under certain circumstances has become unclean by having been already touched by some one else. And so a servant always walked in front of this Rothschild and wiped the door-handles. Moreover, he never touched paper money that had been in use before; the notes had to be fresh from the press.

{p. 209} The kinship between Judaism and Capitalism is further illustrated by the legally regulated relationship - I had almost said the business-like connexion, except that the term has a disagreeable connotation - between God and Israel. The whole religious system is in reality nothing but a contract between Jehovah and His chosen people, a contract with all its consequences and all its duties. God promises something and gives something, and the righteous must give Him something in return. ... Two conse-quences must of necessity follow: first, a constant weighing up of the loss and gain which any action needs must bring, and secondly, a complicated system of bookkeeping, as it were, for each individual person.

{p. 214} What is the meaning of this parallelism between the Jewish religion and capitalism? ...

The idea of contract, which is part and parcel of the underlying principles of Judaism, must perforce have the corollary that whoever carries out the contract receives reward, whoever breaks it receives punishment. In other words, the legal and ethical assumption that the good prosper and the evil suffer punishment was in all ages a concept of the Jewish religion. All that changed was the interpretation of prosperity and punishment.

The oldest form of Judaism knows nothing of another

{p. 215} world. So, weal and woe can come only in this world. If God desires to punish or to reward, He must do so during man's lifetime. The righteous therefore is prosperous here, and the wicked here suffer punishment. Obey my precepts, says the Lord, "so that thou mayest live long and prosper in the land which the Lord thy God hath given unto thee." Hence the bitter cry of Job, "Wherefore do the wicked live, becomeold, yea, wax mighty in power? ... But my way He hath fenced up, that I cannot pass ... He hath broken me down on every side ... He hath also kindled His wrath against me" [Job xxi. 7; xix. 8, 10, 11]. "Why hath all this evil come upon me, seeing that I walked in His path continually?"

A little after Ezra's time the idea of another world (Olam Habo) finds currency in Judaism, the idea, too, of the immortality of the soul and of the resurrection of the body. These beliefs were of foreign origin, coming probably from Persia. But like all other alien elements in Judaism they, too, were given an ethical meaning, in accordance with the genius of the religion. The doctrine grew up that only the righteous and the pious would rise up after death. The belief in eternity was thus made by the Soferim to fit in with the old teaching of rewards and punishments, in order to heighten the feeling of moral responsibility, i.e., of the fear of the judgment of God."

The idea of prosperity on earth is now extended. It is no longer the only reward of a good life, for a reward in the world to come is added to it. Still, God's blessing in this world is no small part of the total reward. Moreover, the very fact that a man is prosperous here was proof positive that his life was pleasing to God, and that therefore he might expect reward in the next world also.

{p. 216} Look through Jewish literature, more especially through the Holy Writ and the Talmud, and you will find, it is true, a few passages wherein poverty is lauded as something higher and nobler than riches. But on the other hand you will come across hundreds of passages in which riches are called the blessing of the Lord, and only their misuse or their dangers warned against.

{p. 217} I admit that there are many places in the Bible and the Talmud which regard wealth as a danger to the righteous, and in which poverty is extolled. There are some half-dozen of them in the Bible; the Talmud has rather more. But the important thing is that each of these passages may be capped by ten others, which breathe a totally different spirit. In such cases numbers surely count.

{p. 219} ... they give the tone to the whole of Proverbs. A few only shall be quoted: -

"Length of days are in her right hand; in her left are riches and honour" (iii. 16). "Riches and honour are with me; yea, durable riches and righteousness" (viii. 18). "The rich man's wealth is his strong city" (x. 15). "Their riches are a crown unto the wise" (xiv. 24). "The reward of humility and the fear of the Lord is riches and honour and life" (xxii. 4).

{p. 221} Judaism even in times of great affliction was always optimistic. In this the Jews differ from the Christians, whose religion has tried to rob them all it could of earthly joys. As often as riches are lauded in the Old Testament they are damned in the New, wherein poverty is praised. The whole outlook of the Essenes, turning its back upon the world and the flesh, was incorporated in the Gospels. One can easily recall passage after passage to this effect. (Cf. Matt. vi. 24; x. 9, 10; xix. 23, 24.) "It is easier for a camel to go through a needle's eye than for a rich man to enter into the Kingdom of God." This is the keynote of Christianity on the point, and the difference between it and Judaism is clear enough. There is no single parallel to the saying of Jesus in the whole of the Old Testament, and probably also none in the entire body of Rabbinic literature.

{p. 223} The Torah is as binding to-day in its every word as when

{p. 224} it was given to Moses on Sinai. Its laws and ordinances must be observed by the faithful, whether they be light or grave, whether they appear to have rhyme or reason or no. ...

These words show clearly enough how holiness and legalism are connected; they show that the highest aim of Israel still is to be a kingdom of priests and a holy nation; and that the path to that end is a strict obedience to God's commandments. Once this becomes apparent, we can imagine the importance the Jewish religion has for the whole of life. In the long run, external legalism does not remain external; it exercises a constant influence on the inner life, which obtains its peculiar character from the observance of the law.

{p. 225} Let us recall what was said in the last section about the "worldliness" of the Jewish religion. In accordance with this it can scarcely be holy to deny the natural instincts or to crush them, as other religions teach - e.g.. Buddhism or Primitive Christianity. Other-worldly asceticism was always antagonistic to Judaism.

{p. 237} We see then that a good deal of capitalistic capacity which the Jews possessed was due in large measure to the sexual restraint put upon them by their religious teachers.

{p. 245} "If a non-Jew makes an error in a statement of account, the Jew may use it to his own advantage; it is not incumbent upon him to point it out." So we may read in the Tur, and though Joseph Caro did not include this in his law-book, it crept in later as a gloss from the pen of Isserlein. Is it not obvious that the good Jew must needs draw the conclusion that he was not bound to be so particular in his intercourse with non-Jews? With Jews he will scrupulously see to it that he has just weights and a just measure; but as for his dealings with non-Jews, his conscience will be at ease even though he may obtain an unfair advantage. It is not to be denied that in some cases honesty towards non-Jews was inculcated. But to think that this should have been necessary! Besides, this is the actual wording of the law: "It is permissible to take advantage of a non-Jew, for it is written. Thou shalt not take advantage of thy brother." (The context refers not to overreaching, but only to the asking of higher prices from a non-Jew.)

{p. 246} This conception must have been firmly rooted in those districts (e.g., in Eastern Europe) where the study of the Talmud and the casuistry it engendered were universal. The effect it had on the commerce of the Jew has been described by Graetz, surely no prejudiced witness. "To twist a phrase out of its meaning, to use all the tricks of the clever advocate, to play upon words, and to condemn what they did not know ... such were the characteristics of the Polish Jew... Honesty and right-thinking he lost as completely as simplicity and truthfulness. He made himself master of all the gymnastics of the Schools and applied them to obtain advantage over any one less cunning than himself. He took a delight in cheating and overreaching, which gave him a sort of joy of victory. But his own people he could not treat in this way: they were as knowing as he. It was the non-Jew who, to his loss, felt the consequences of the Talmudically trained mind of the Polish Jew."

In the second place, the differential treatment of non-Jews in Jewish commercial law resulted in the complete transformation of the idea of commerce and industry generally in the direction of more freedom. If we have called the Jews the Fathers of Free Trade, and therefore the pioneers of capitalism, let us note here that they were prepared for this role by the free-trading spirit of the commercial and industrial law, which received an enormous impetus towards a policy of laissez-faire by its attitude towards strangers. Clearly, intercourse with strangers could not but loosen the bonds of personal duties and replace them by economic freedom. Let us glance at this in greater detail.

The theory of price in the Talmud and the Codes, in so far as it affected trade between Jew and Jew, is

{p. 247} exactly parallel to the scholastic doctrine of justum pretium which was prevalent in Europe throughout the Middle Ages. But as between Jew and non-Jew, there was no just price. Price was formed as it is to-day, by "the higgling of the market."

Be that as it may, the important thing to observe is that already in the Talmud, and still more distinctly in the Shulchan Aruch, conceptions of the freedom of industry and enterprise, so entirely alien to the Christian law of Mediaeval Europe, are met with. ...

{p. 248} Finally, Jewish law favours industrial laissez-faire. So we find in the Shulchan Aruch: "If any one commenced a handicraft in his street and none of his neighbours protested, and then one of the other residents in the street wishes to carry on the same calling, the first may not com-¥174/Werner Sombart plain that the new-comer is taking the bread out of his mouth, and try to prevent him" (Choshen Mishpat, 156, §5).

Clearly, then, free trade and industrial freedom were in accordance with Jewish law, and therefore in accordance with God's will. What a mighty motive power in economic life!

Judaism and Puritanism

I have already mentioned that Max Weber's study of the importance of Puritanism for the capitalistic system was the impetus that sent me to consider the importance of the Jew, especially as I felt that the dominating ideas of Puritanism which were so powerful in capitalism were more perfectly developed in Judaism, and were also of course of much earlier date.

A complete comparison of the two "isms" is not within my province here. But I believe that if it were made, it would be seen that there is an almost unique

{p. 249} identity of view between Judaism and Puritanism, at least, on those points which we have investigated. In both will be found the preponderance of religious interests, the idea of divine rewards and punishments, asceticism within the world, the close relationship between religion and business, the arithmetical conception of sin, and, above all, the rationalization of life.

Let me refer to an instance or two. Take the attitude of Judaism and Puritanism to the problem of sex. In one of the best hotels of Philadelphia I found a notice in my room to this effect: "Visitors who may have to transact business with ladies are respectfully requested to leave the door of their room open while the lady is with them." What is this but the old dictum of the Talmud (Kiddushin, 82a), "Hast thou business with women? See to it that thou art not with them alone"?

Again, is not the English Sunday the Jewish Sabbath? I would also recall the words of Heine, who had a clear insight into most things. "Are not," he asks in his Confessions, "Are not the Protestant Scots Hebrews, with their Biblical names, their Jerusalem, pharisaistic cant? And is not their religion a Judaism which allows you to eat pork?"

Puritanism is Judaism.

Whether the first was influenced by the second, and if so, how, are most difficult questions to answer. It is well known, of course, that in the Reformation period there was close intercourse between Jews and certain Christian sects, that the study of Hebrew and the Hebrew Scriptures became fashionable, and that the Jews in England in the 17th century were held in very high esteem by the Puritans. Leading men in England like Oliver Cromwell built up their religious views on the Old Testament, and Cromwell himself dreamed of a reconciliation between the Old and the New Testaments, and

{p. 250} of a confederation between the Chosen People of God and the Puritan English. A Puritan preacher of the day, Nathaniel Holmes by name, wished for nothing better than, in accordance with the letter of the prophetic message, to become a servant of God's people and to serve them on bended knee. Public life became Hebraic in tone no less than the sermons in churches. And if only speeches in Parliament had been in Hebrew, you might have believed yourself in Palestine. The "Levellers," who called themselves "Jews" (in opposition to their opponents whom they termed "Amalekites"), advocated the adoption of the Torah as the norm of English legislation. Cromwell's officers suggested to him to appoint seventy members of his Privy Council according to the number of the members of the Synhedrin. To the Parliament of 1653 General Thomas Harrison, the Anabaptist, was returned, and he and his party clamoured for the introduction of the Mosaic legislation into England. In 1649 it was moved in the House of Commons that the Lord's Day should be observed on Saturday instead of on Sunday. On the banners of the victorious Puritans was inscribed "The Lion of Judah." It is significant that not only the Bible, but the Rabbinical literature as well, was extensively read in large circles of the clergy and laity.

Altogether, then, there appears to be sufficient evidence for the deduction of Puritan doctrines from Jewish sources.

{p. 321} What the race-theorists have produced is a new sort of religion to replace the old Jewish or Christian religion. What else is the theory of an Aryan, or German, "mission" in the world but a modern form of the "chosen people" belief?

{p. 350} Another aspect of Ghetto life is of more consequence. I refer to its influence in making the inherent Jewish characteristics more marked and more one-sided. ...

The religion of a people is, of course, the expression of its soul: that has been the view that we have taken in this book. But all the same, an exclusive formalistic religion like Judaism must in its turn strongly influence its adherents, more especially in the direction of unifying their life and giving it a common stamp. How this expressed itself we have also considered; I would here only remind the reader of its rationalizing tendencies. And as with religion so with the physiological side of life, which is so closely akin to it. That also intensified the inbreeding of the Jews, which they had practised for hundreds of years. I have just remarked that with the Jews inbreeding is closely akin to religion. One may go even further and say that it is a direct consequence of the central idea of the religion, the idea of election.

{end of quotes}

The result, today, is that countries owe massive foreign debt to anonymous creditors. Further, we have no idea who really owns many of our assets. Anonymous owners, who may be anywhere on the planet, hidden behind business names, use "proxy" votes; we do not see their faces.

Anonymous ownership is surely the distinctive mark of Capitalism; never before has there been such a system.

The complete text of Sombart's book can be downloaded, in pdf, (it is the same translation, but a different edition, with different page numbers) at: http://mailstar.net/sombart-jews-capitalism.pdf.

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