extract the information, he questioned Schiff at length on the manner in
which Kuhn, Loeb divided allotments to participants in its syndicates, on
what it charged for commission, and on its links through individual part-
ners to certain banks and trust companies. Usually, Schiff answered will-
ingly, but in many instances he said he couldn’t remember specific dates or
names. When Hughes proved that Hyde had been siphoning off the
company’s money and receiving payments from Kuhn, Loeb to his private
account, Schiff readily blamed Hyde but denied any underhanded arrange-
ments by his firm. Nor was he aware, he maintained, of how the society
channeled funds to accounts not in its own name. In a dramatic peroration
to his testimony he forcefully asserted that he personally had received no
favors from the society and that in no way did “favoritism” or “undue influ-
ence” color the Equitable–Kuhn, Loeb connection.^81
Schiff’s protestation of innocence was not entirely convincing, and not
all were convinced. When the manager of Equitable’s securities depart-
ment testified to the numerous payments made to Kuhn, Loeb and its em-
ployees separately, he underscored the unlikelihood of Schiff’s ignorance.
One Anglo-Jewish weekly commented that the banker’s admirers were
forced to admit that the man who could have made himself the virtual dic-
tator of American Jewry was “no better than other mortals.” More than a
year later the New York Sun still sneered at the “singularly debilitated con-
dition” of Schiff’s memory at the Armstrong hearings. Indeed, from one
who was always known for a careful mastery of details, Schiff’s so-called
memory lapses during the hearings (and similarly in the later Pujo investi-
gation) were open to question. The best explanation is that the banker was
resorting to a tactic used by businessmen since the Gilded Age. Resentful
of investigative bodies, they showed their defiance by claimimg a loss of
memory.^82
The report of the Armstrong committee indicted the insurance compa-
nies for financial and political misconduct and led shortly thereafter to leg-
islative reforms. Although Schiff believed that his testimony had vindicated
him, Kuhn, Loeb did not escape unscathed. The report pointed to consid-
erable loans made by Equitable to Kuhn, Loeb, and it also told of how Eq-
uitable, using Kuhn, Loeb, connived at falsifying accounts. The committee
may have been skeptical about Schiff’s professed ignorance of Equitable’s
transactions, but the banker personally was not attacked.^83
Government and BusinessSchiff voted his business interests in the presidential election of William
McKinley. The businessman’s creed had as its primary objective a stable and
rational economic order, one in which investors had confidence. In the eyes
28 Jacob H. Schiff