continued to expand, the Orient and the Ottoman Empire as well. Al-
though Schiff at times thought that opportunities in America were more
attractive, Kuhn, Loeb’s investments in European industrial corporations
and governments also multiplied before World War I.^95 Schemes for in-
vestments abroad brought an important side benefit. Impelled to steep
himself in contemporary European politics and international diplomacy,
Schiff cultivated personal contacts around the world; their cooperation
proved useful in business and in Jewish communal affairs.
Schiff personally was attracted to ventures in far-off fields. As early as
1872, when still affiliated with Budge, Schiff & Company, the twenty-five-
year-old banker and his friend James H. Wilson, a railroad man and a for-
mer Union general known for his capture of Jefferson Davis, attempted to
secure a share of a Japanese bond issue. The effort failed despite aid from
the English banking house of Bischoffsheims, but Schiff remained alert to
financial opportunities in the Far East.^96 At such times he displayed the
same boldness and tenacity of purpose that underlay much of his business
success.
In the last quarter of the nineteenth century the interest and influence of
the Western powers in Japan and China intensified. Japan took readily to
modernization as preached by the Westerners, and its victory over China
in the Sino-Japanese war of 1894– 95 made it the foremost power in the
Far East. During the same decade the major European nations, together
with Japan, carved up parts of China into spheres of influence. As rivalry
among the powers for Chinese concessions (e.g., to build railroads, to de-
velop mines) increased, the United States, for strategic and economic rea-
sons, stepped in with the Open Door policy. Formulated by Secretary of
State John Hay in two notes (1898 and 1900) that were circulated among
the powers, the policy bound the signatories to respect both equal access to
trade with China and Chinese territorial integrity. Roosevelt and Taft, each
with his own interpretation of the Open Door policy, encouraged Ameri-
can economic penetration into China, and both looked to bankers for in-
vestments that would strengthen the American presence in the Far East.
Without any prodding from the government, Kuhn, Loeb undertook its
most ambitious and aggressive foreign venture when it funded Japan in its
war against Russia (1904–5). Although Schiff sided with Japan largely be-
cause of Russia’s anti-Semitic policies, loans also promised financial gains.
European and American investment firms had initially turned a cold shoul-
der on what was perceived as too risky a venture, but after Schiff’s negotia-
tions with Cassel and other English bankers early in 1904 they were per-
suaded to cooperate. The first two war loans were underwritten in New
York and London; the second two, in New York, London, and Berlin; the
The Making of a Leader 33