3. The Weapon Hitler Feared
CORDELL HULL and the American Jewish Committee soon learned that their efforts to contain the anti-Nazi movement would be seriously challenged. Page-one headlines of the March 23, 1933, New York Times portrayed the new public mood.
"PROTEST ON HITLER GROWING IN NATION. Christian and Non-Sectarian Groups Voice Indignation Over Anti-Jewish Drive. URGE WASHINGTON TO ACT." 
"BOYCOTT MOVE SPREADS. Merchants Cancelling Orders for German Goods." 
The movement was spreading spontaneously, along interreligious lines. Spurred on by the Jewish War Veterans, the nation's emotions were mobilized. Boycott was finally a word lifted out of the whispers and into the headlines. Under the direction of Col. Morris J. Mendelsohn, chairman of the JWV's Boycott Committee, a veterans' protest march was organized. In solidarity, W. W. Cohen, vice-president of the American Jewish Congress, accepted the position of parade marshal. He participated at his own initiative, since Stephen Wise was still reluctant to commit the Congress to a boycott per se, and Congress leaders didn't want to detract from their own upcoming Madison Square Garden protest.  Cohen's visibility nevertheless associated the powerful Congress with the JWV's banners and placards declaring economic war on Germany.
Without the active support of the Congress, Mendelsohn was uncertain how many marchers would participate and how many prominent figures would actually show up to endorse the boycott. The day before the parade, Mendelsohn tried to cheer up JWV leader J. George Fredman by telling him, "George, if we have nobody else, you and I will march the full line of the parade and call on the mayor." But in truth Mendelsohn doubted whether even Mayor John O'Brien would attend, since he was known to be saving his first anti-Nazi appearance for the Congress rally. 
Everyone was surprised, therefore, when the Jewish War Veterans' boycott parade received an enthusiastic reception. Many thousands of cheering sympathetic watchers encouraged the thousands of Jewish and non-Jewish vets as the parade moved through the East Side to City Hall where Mayor O'Brien was waiting on the reviewing stand. With much fanfare and applause, resolutions were presented demanding diplomatic measures and an economic protest against the Reich. Dovetailing with the JWV protest parade was a variety of sympathetic conferences, petitions, and resolutions by interfaith and nonsectarian groups, including the American Federation of Labor, which pledged its 3 million members to fighting Nazism here and in Germany. 
March 23 was a success for the Jewish War Veterans. Their boycott kickoff generated maximum publicity. One radio station covered the day with updates every fifteen minutes. Extensive support was offered by those in prominence and power -- as well as by the anonymous faces in the crowd, outraged and merely waiting for a raised hand to lead the protest against Adolf Hitler.
German legations around the United States reported the anti-Nazi developments to the fifty-one-day-old Reich. Jewish protest was not merely a nuisance; it preyed upon the minds of the Nazis as they braced for their first big fight against their avowed enemies, the Jews.  How effective any anti- German boycott and protest movement would be was the question. Could mere popular protest in Europe and America influence the Third Reich? Could a boycott -- an economic war- -- opple the Hitler regime or force Germany to abandon its anti-Jewish program? At the time, some Jewish leaders either doubted the power of the anti-Nazi movement or were unwilling to participate. This failure to participate worked to Hitler's advantage, because the Jewish-led, worldwide anti-Nazi boycott was indeed the one weapon Hitler feared.
To understand why, one must examine Germany's economic precariousness in 1933, the Nazi mentality, and the historic power of Jewish-led boycotts. To do so requires a dual perspective: statistical and perceptual. Of equal weight in history is reality and the perception of reality, because the two ignite each other in a continual chain reaction that ultimately shapes events and destinies among men and nations.
The deterioration of the once powerful German economy really began in World War I, when German military and political leaders simply did not calculate the economic effects of a prolonged war. The Allied blockade cut off Germany's harbors and most of her land trade routes. Trade was decimated. Industry couldn't export. War materiel and civilian necessities, including food, could not be imported.
Before the blockade was lifted, 800,000 malnourished German civilians perished. Actually, the blockade created less of a food shortage for Germany, which was 80 percent food self-sufficient before the war, than did the shortsighted policy of pulling Germans off the farms to fight without compensating for reduced food production. But the popular perception among Germans was that they had been starved into submission, defeated not on the battlefield but by political and economic warfare and connivance, by what became known as the "stab in the back."
The Treaty of Versailles' nonnegotiable terms demanded the forfeiture of German colonies as well as a number of conquered or traditionally German lands; the dismemberment of the German military machine; the seizure of key German waterways; the arrest of hundreds of German militarists and leaders as war criminals, including the German emperor Kaiser Wilhelm II; the granting of most-favored, nonreciprocal foreign commercial rights in Germany; and a certain amount of interim foreign occupation. The German leadership was to sign a hated statement of total war guilt. Additionally, Germany was to pay war reparations over the next two years of 5 billion gold marks, and approximately 15 billion marks' worth in cattle, timber, and other barterable items. The Allies allowed no negotiation of Versailles' oppressive terms and refused to lift the economic and material blockade until German leaders accepted what later German generations would call the Diktat.
Two years later, the Allied Reparations Commission levied additional reparations of 132 billion gold marks. Such a monumental sum, payable in cash and goods, would be a garnishment for generations, a commercial enslavement that would hold Germany captive for fifty to a hundred years.
Germany's population, and indeed world leaders and historians, would later brand the Versailles Treaty as merciless and intolerable. But the Allies were following in the tradition of previous German victories, which vanquished losers. For example, in February 1918, when Russia, beset by revolution, tried to disengage from the war, German generals issued an ultimatum to surrender within five days or suffer unlimited destruction. At the same time, a renewed German offensive began. Lenin was forced to submit his new nation to the humiliating Treaty of Brest-Litovsk. Its terms defrocked Russia of a third of her farmland, 56 million people -- or a third of her population -- a third of her railroads, more than 5,000 factories comprising half her industrial capability, almost 90 percent of her coal, and beyond that a cash indemnity of 6 billion gold marks. The treaty was nullified after the Allied victory.
So Germany in 1919 was forced to recover from war under conditions similar to those she had previously imposed on her own enemies. However, the German people did not blame the precedents they themselves had established, but rather the political and economic weapons wielded against them at the Peace Conference. They blamed the blockade and their own civilian leaders for acceding to Allied demands and forfeiting German glory.
And, some Germans, such as the Nazis, blamed a Jewish conspiracy. In their minds it was Jewish bankers who would prosper from Germany's economic tragedy, since massive loans would be necessary both to recover from the war and to pay war indemnity. In Nazi minds, it was Jewish Bolshevism that would gain by undermining the German Empire and replacing it with a Weimar Republic where Marxism could flourish. In their minds it was Jews who at the Treaty of Versailles gained rights of minority citizenship throughout war-reconstructed Europe. 
Hitler's own words expressed the scapegoat rationale. Preaching to frantic, impoverished Germans, the Nazi leader cried: "Not so long ago, Germany was prosperous, strong, and respected by all. It is not your fault Germany was defeated in the war and has suffered so much since. You were betrayed in 1918 by Marxists, international Jewish bankers, and corrupt politicians." 
Hitler attributed the stories of Germany's wartime atrocities to an international Jewish conspiracy, using newspapers Jews secretly controlled. And so the Nazis held a special fear of what they called Greuelpropaganda, or atrocity tales. In Nazi thought, it was Greuelpropaganda that distorted German valor into Hun-like savagery. Greuelpropaganda was a mighty weapon the Jews knew how to use to harness the German nation into bondage.
The lasting economic agonies of Versailles were soon apparent. Inflation wracked postwar Germany, as the Weimar Republic struggled to keep pace with Allied reparation demands and domestic recovery. German currency was printed -- so fast that it was inked on one side only. In 1919, the value of the mark was around 9 to a U.S. dollar; in 1921,75 marks to a dollar; in 1922, 400 to a dollar; and in early January 1923, 7,000 marks equaled a dollar.
For reparations, France of course preferred commodities, such as timber, and coal, to valueless German currency. But German production was unable and unwilling to satisfy the payment schedule. When the Weimar Republic defaulted on the delivery of 100,000 telephone poles, France exercised her treaty option and in mid-January 1923 invaded Germany's industrial heartland, the Ruhr. Thousands of French troops took charge of mines, mills, and manufacturing plants. Germans were outraged that so petty an infraction could warrant a full-fledged French occupation. Workers throughout the Ruhr went on general strike with the full backing of the Weimar government. To support the strikers, the government cranked out millions upon millions of worthless marks as special welfare assistance. By late January 1923, the mark had jumped to 18,000 to the dollar and began inflating astronomically, until by 1924, it was about 5 trillion to the dollar.
In 1924, German currency could be used for virtually nothing except lighting stoves. People's savings were wiped away, their livelihood ruined. An international commission intervened and the Dawes Plan emerged, whereby France would withdraw from the Ruhr and scheduled reparations -- mostly in goods -- would be resumed. The goods would be manufactured after a national retooling financed by large foreign loans, mostly from America.
Within a few years, billions of U.S. dollars and other foreign currencies flowed into Germany, reequipping and overindustrializing that nation on an unparalleled basis in order to produce merchandise and other barterable items to repay the Dawes loans and war reparations. By the late 1920s, America owned and controlled billions of dollars of German industry. And the entire German economy -- which was becoming somewhat stable and prosperous -- was now also dependent upon export. Millions of jobs were wholly tied to the foreign market. Export was the oxygen, the bread, and the salt of the German work force. Without it, there would be economic death. 
Just before the decade closed, on October 24, 1929, Wall Street crashed. America's economy toppled and foreign economies fell with it. For Germany, intricately tied to all the economies of the Allied powers, the fall was brutal. Thousands of businesses failed. Millions were left jobless. Violence over food was commonplace. Germany was taught the painful lesson that economic survival was tied to international trading partners and exports.
During each economic crisis the Nazis scored electoral triumphs among the disadvantaged. In the boomlike year 1928, the Nazis could poll no more than 810,000 votes nationally. But two years later, well into the Depression, the Nazis' support leaped to about 6.5 million. In July of 1932, at the height of the crisis, oppressed by 6 million unemployed, the nation delivered 13.5 million votes for Hitler, most of it from the young, unemployed middle class. 
Shortly after the July 1932 election, the economy improved somewhat, due more to psychological than true financial factors. A bumper wheat and potato harvest made Germany temporarily independent of imported grain and starch related foodstuffs. Public makework gave short-term relief to the most severely hardshipped in big cities. More than 74,000 gardens and 26,000 settlement houses were erected to help feed and shelter the jobless in small towns. Seasonal unemployment came a bit later and less severely that autumn than in previous years. Total acknowledged unemployment was under these circumstances down to just more than 5 million. In certain segments of German society, confidence began to take hold. 
As the bankrupt Nazis approached the November 1932 contest, they were unable to pay for a last-minute voter drive. In the aura of stability and with reduced Nazi campaigning, the electorate backed away from the radical program of National Socialism, casting 2 million fewer votes for the NSDAP. But after the November election, with the Nazis nevertheless assured of a leading role in the government, the brief improvement in the economy vanished.  The moderate moment had been lost.
Commercial recovery was Adolf Hitler's prime mission when he came to power in January 1933. But Hitler and his circle's conception of their problem and the twisted explanations they ascribed to real and perceived trends became the new determining economic factors. The greatest obstacles to recovery now were, in fact, political instability and bizarre economic policies, including import restrictions that provoked retaliatory bans on German exports.
Economic policies and the worldwide economic depression combined to deprive Germany of her place among the world's trading nations. Without exports, Germany was denied foreign currency -- the essential ingredient to her survival. Without foreign exchange, she could not pay for the imported raw materials she needed to continue manufacturing nor for imported foodstuffs to compensate for recurring shortages. Worse, Germany couldn't even borrow money to pay for raw materials and food because without foreign exchange to pay her war reparations and other foreign obligations, her credit was once again unreliable. 
In late 1932, the president of the Reichsbank warned the cabinet that further deterioration in foreign exchange would force Germany into another fiscal default. What's more, if there was a sudden run on Germany's banks, it would trigger another total crash of the economy. 
But when Hitler and his circle saw Germany deadlocked in depression, they did not blame the world depression and the failures of German economic policy. They blamed Bolshevik, Communist, and Marxist conspiracies, all entangled somehow in the awesome imaginary international Jewish conspiracy. The Jews were not just a handy scapegoat. The paranoid Nazis believed in the legendary, almost supernatural economic power of the Jews. When they promulgated the motto "The Jews are our bad luck," they meant it. 
Complicating the Reich's response to economic developments was Hitler's impatience for economic details. A British embassy report compiled in early 1933 explained: "Hitler is a pure visionary who probably does not understand the practical problems he is up against." In fact, Hitler saw only the superficial aspects of any economic problem. He was well known for exhorting his followers: "If economic experts say this or that is impossible, then to hell with economics .... if our will is strong enough we can do anything!  Therefore, when problems persisted, the Nazi response was to scream "conspiracy" and make snap decisions to plug holes rather than rebuild the dike.
In the Nazi mind, the Jewish-led, anti-Nazi boycott would reduce exports and foreign currency below the viable threshold. By Nazi thinking, a second prong of the Jewish offensive would be publicizing German atrocities to undermine confidence in the new regime and turn the non-Jewish world against Germany. In this instance, Nazi fears approximated the reality. As an overindustrialized nation dependent upon exports, Germany was especially prone to boycott. Therefore, as the American Jewish War Veterans escalated their anti-Reich agitation in late March 1933, a primary order of Nazi business would now be to end the atrocity claims and stop the boycott. 
Nazi preoccupation with the anti-German boycott was not merely a fear of Jewish power. The Nazis dogmatically believed in the power of boycotts in general. Boycott had long been a prime tactic of the German anti-Semitic movement. When in 1873 an economic depression followed a stock market fall, the German Conservative party falsely blamed Jewish speculators and organized anti-Semitic campaigns, including boycotts. A few years later, the Catholic party joined the movement, coining the motto "Don't buy from Jews." By 1880, Berlin women's organizations had formed housewife boycott committees. 
During the years prior to 1933, Hitler, Goebbels, Goering, and other Nazi leaders regularly struggled to attract public support by advocating the anti-Jewish boycott. Brownshirt pickets around a store with signs reading DON'T BUY FROM JEWS served to remind Germans of the Jews' secure economic status and warn Jews of what was in store should National Socialism come to power. The Nazis were convinced that an official countrywide boycott would totally destroy the commercial viability of the Jews in Germany. 
But during the first years of the Nazi party, German anti-Semites also became painfully aware of the Jewish power of boycott and backlash. The lesson came in a confrontation waged not in Germany but in the United States, pitting the Jewish community against the American anti-Semite most revered by the Nazis: Henry Ford.
The richest man in America, whose name was stamped on every Model T, quickly catapulted to the forefront of political anti-Semitism after he became convinced of the Jewish conspiracy cliche. Henry Ford's nineteenth-century rural mentality didn't adapt well to the complexities of the twentieth-century world. He did things in his own peculiar way, regardless of the cost. Shortly after the Great War began in Europe, Ford claimed he had discovered "proof" that Jews were behind the world's troubles. In 1918, Ford purchased the weekly Dearborn Independent and soon thereafter changed its editorial thrust to virulent anti-Semitism. 
Ford also employed agents to seek out more anti-Jewish "evidence." One such agent acquired a typescript entitled The Protocols of the Elders of Zion, the fabricated secret minutes of an imaginary Jewish conspiracy to topple governments, dominate economies, pervert morals, and defeat noble bloodlines by intermarriage. The fake Protocols were laughed off by many. But a few, including Henry Ford, took them to be a veracious revelation of the most sinister plot of modern times. In May 1920, a series of Dearborn Independent articles and editorials publicized the Protocols and a host of slanders and accusations under the general heading "The International Jew." Ford's articles accused American Jewish leaders such as Louis Marshall and Louis Brandeis of using Presidents Taft and Wilson as their puppets. Other prominent Jews were accused of perpetrating World War I for the benefit of Jewish bankers and fomenting the Russian Revolution for racial imperialism. The defamations continued weekly, as Ford's paper denounced the Jewish conspiracy for corruption on Wall Street, in labor, and on the ball field -- Jews were even behind the Black Sox baseball gambling scandal. Jews were also allegedly responsible for Benedict Arnold, the Civil War, and the assassination of Abraham Lincoln. What Jews could not achieve by money, media, or manipulation, they would achieve by pandering to the sexual perversions of the powerful and prominent. 
These accusations were not just the ramblings of The Dearborn Independent. They were in fact a product of the Ford Motor Company. Henry Ford listed his name at the top of every front page. Ford motorcar dealers were compelled to buy and sell subscriptions. Dealers who filled their subscription quotas received Ford cars as prizes. Those falling short were assured that The Dearborn Independent was "just as much of a Ford product as the car or tractor." Many reluctant dealers received threatening legalistic letters insisting they sell the tabloid. Reprints were bound into booklets and distributed to libraries and YMCAs throughout the nation. 
Devoting the national sales force and the assets of Ford Motor Company to spreading Jew hatred made Henry Ford the first to organize anti-Semitism in America. Indeed, he was the hero of anti-Semites the world over. In Germany, thousands of copies of Ford's teachings were published under the title The Eternal Jew, by Heinrich Ford. 
Ford's book quickly became the bible of the German anti-Semites, including Adolf Hitler -- this at least two years before Mein Kampf was written. Hitler was so entranced with Ford's struggle against Jewish economic power that he hung a large portrait of Ford beside his desk and spoke of him incessantly.  When Hitler was interviewed by a Chicago Tribune reporter in 1923 about Ford's chances of winning the U.S. presidency, del' Fuhrer enthusiastically declared, "I wish that I could send some of my shock troops to Chicago and other big American cities to help in the elections. We look on Heinrich Ford as the leader of the growing Fascist Party in America." 
A year later, in 1924, Hitler wrote his own anti-Jewish epistle, Mein Kampf, his blueprint for the destruction of the Jewish people. Many of the ramblings in Mein Kampf were identical to passages in "The International Jew." Hitler lionized Ford even after the Nazis became a leading factor on the German political scene. Just before Christmas 1931, der Fuhrer admitted to a Detroit News reporter, "I regard Henry Ford as my inspiration." Once the Third Reich came to power, millions of Ford's books were circulated to every school and party office in the nation, many featuring the names Hitler and Ford side by side on the cover. 
American Jewish reaction to the Henry Ford threat was swift. Within a few months of the Dearborn Independent's inaugural anti-Semitic issue, a spontaneous Jewish boycott movement erupted. Libel suits were launched against Ford personally. A Jewish-led campaign to legally ban the sale or distribution of the publication began in Chicago, Boston, St. Louis, and other cities. Where legislated bans were overturned by court action, angry mobs often greeted Dearborn Independent street vendors. 
The backlash campaign started hurting Ford in late 1920, when Jews began refusing en masse to purchase any vehicle bearing a Ford emblem. Typical was a Connecticut Jewish community's 4oo-car parade in early 1921 honoring Albert Einstein and Chaim Weizmann -- parade rules included the proviso "Positively no Ford machines permitted in line." Ford himself couldn't even give one away to his Jewish neighbor, Rabbi Leo M. Franklin of Detroit. Each year Ford gave the rabbi a custom-built car as a gift. But the rabbi emphatically refused Ford's gift after the Dearborn Independent's articles began. 
Even the American Jewish Committee encouraged the boycott. The Committee opposed proclaiming an "official" boycott, reluctant to openly answer Ford's charges of an economic conspiracy with a coordinated economic weapon. But Committee leader Louis Marshall felt a "silent boycott" would be equally effective, maintaining that any self-respecting Jew would know what to do without being told when purchasing an automobile. 
Ford's steepest sales declines first appeared in the Northeast, where Jews comprised a substantial segment of the car-buying market. Within five years, a leading dealer in the Southwest was painfully aware that wealthy Jews in Texas and neighboring states hadn't purchased a Lincoln in years. And company inquiries about low sales in Missouri revealed that Jews wouldn't take a Ford if it was handed to them free. 
In reality, the Jewish boycott of Ford products was probably not statistically effective. While Ford's sales in urban centers did decrease significantly, equally important sales in small towns and rural areas either remained constant or increased. And the recorded urban sales slumps were only partially due to the Jewish-led boycott. General economic conditions and the declining popularity of the Model T were equally potent factors. But in the early and mid-1920S, Ford people were convinced that the Jewish-led boycott was in large part responsible. 
The precise figures were guarded by Ford's corporate sales hierarchy even as dealers and regional sales managers continually pleaded for Ford's campaign to cease. For example, New York sales manager Gaston Plaintiff, a personal friend of Ford, wrote numerous letters bemoaning the boycott. Ford would typically reply, "If they want our product, they'll buy it." 
In 1927, the advent of a competitive Chevrolet made the Jewish boycott an unacceptable liability for Ford Motor Company. Any lost product loyalty would now be lost forever to the competition. The Model T was obsolete, and the company's future was precariously stacked on a new Model A. At the same time, Ford desperately sought to avoid humiliating public trials with libeled Jews who had sued. 
In the summer of 1927, Ford's representatives approached Nathan Perlman, a vice-president of the American Jewish Congress, seeking a truce. Stephen Wise was in Europe, so Perlman referred Ford's people to the Committee. Louis Marshall prepared an embarrassing retraction cum apology for Ford to sign and publish. Close advisers cautioned the car maker that the humiliating apology might be too much for Ford's pride. But the global leader of anti-Semites had endured boycotts, legal actions, and political abrasions long enough.  It was time to make money, secure the future, and fight Chevrolet.
On July 7, 1927, in the last year of the outmoded Model T, as Ford acknowledged a decline of about a half million fewer cars sold, and as he prepared for a major financial effort to introduce his new Model A, the proud gladiator of anti-Semites released to the press his contrite plea for forgiveness for wronging the Jews and misleading mankind. 
I have given consideration to the series of articles concerning Jews which have since 1920 appeared in The Dearborn Independent ... and in pamphlet form under the title "The International Jew." ... To my great regret I have learned that Jews generally, and particularly those of this country, not only resent these publications as promoting anti-Semitism, but regard me as their enemy.... I am deeply mortified. . . . I deem it to be my duty as an honorable man to make amends for the wrong done to the Jews as fellowmen and brothers, by asking their forgiveness for the harm that I have unintentionally committed, by retracting so far as lies within my power the offensive charges laid at their door by these publications, and by giving them the unqualified assurance that henceforth they may look to me for friendship and goodwill. 
Within weeks the retraction appeared in The Dearborn Independent itself. Shortly thereafter, Ford's advertising agencies were instructed to spend about 12 percent of the Model A's $1.3 million introductory advertising in Yiddish and Anglo-Jewish newspapers -- the only minority press included in the campaign. Ford also directed that five truckloads of "The International Jew" be burned, and ordered overseas publishers to cease publication as well. 
Ford's capitulation was taken hardest in Germany among Nazi circles. Nazi boycotter Theodor Fritsch wrote to Ford lamenting the loss of both book sales and "the inestimable mental goods" Ford had bestowed upon civilization. "The publication of this book remains the most important action of your life." Yet now, as Fritsch put it, Ford was capitulating to the financial might of the Jews. 
Adolf Hitler, when informed of the retraction, tried to avoid comment. Henry Ford was the man the Nazi party and der Fuhrer himself had lionized as the quintessential fighter of the so-called Jewish economic conspiracy. Hitler had once told reporters in Germany that "the struggle of international Jewish finance against Ford ... has only strengthened [Nazi] sympathies ... for Ford." In Mein Kampf, Hitler had declared that "only a single great man, Ford," was able to stand up to Jewish economic power. 
Ford's unexpected surrender was so powerful a loss to Hitler's movement that the Nazis preferred to ignore the retraction as a mere expediency. Fritsch continued printing "The International Jew." Nonetheless, the tribute to Ford in Mein Kampf was changed in its second edition. The words "only a single great man, Ford," were replaced with the phrase "only a very few." 
A lesson had been learned by Hitler and the Nazis. Jewish boycotts and economic influence, in the Nazi view, held the power not only to subvert governments, but to silence the most indomitable challengers.
Presidential candidate Norman Thomas declared, "Ford's backdown was good evidence of what a consumers' boycott and a lawyer's million-dollar libel suit can do in the way of educating a man who has heretofore been impervious to history." The New York 'Telegram editorialized, "If one of the richest men in the world cannot get away with an anti-Semitic movement in this country, nobody else will have the nerve to try it, and of that we can all be thankful, gentiles as well as Jews." But perhaps the most poignant summing up was uttered by Will Rogers: "Ford used to have it in for Jewish people -- until he saw them in Chevrolets." 
Jews also believed in the power of Jewish boycotts. It mattered little whether the real might of the boycott was the statistical business harm or simply the perception of it. Boycott was a weapon the Jews were ready and willing to use in emergencies to dissuade the forces of anti-Semitism.
The anti-Ford boycott was but a commercial skirmish compared to the international financial war waged against Russian Czar Nicholas II by Jewish banker Jacob Schiff and the American Jewish Committee. The war began when Jews were blamed for Russia's social and economic chaos in the 1880s. The classic scapegoat scenario developed. Quotas for Jews were decreed in academia and commerce. Jews were physically restricted to the smallest hamlets. Bloody pogroms followed as mounted Cossacks swept through the hamlets pillaging and ravaging defenseless Jews. 
Although America's German Jews detested the unkempt Russian Jews, they were nevertheless infuriated by the barbarism of the czar's persecution. Among the Hofjuden who considered themselves the custodians of Jewish defense, Jacob Schiff stood out as a central figure. A major factor in international finance, Schiff's greatest weapon was money: giving it, denying it. After the notorious Kishinev pogrom of Passover 1903, Schiff decided to personally lead a crusade to force Czar Nicholas to abandon his anti-Semitic campaign. 
Schiff used his influence with friends and family in Europe to commit major Jewish and even non-Jewish financial houses to a banking boycott of Russia.  And before long, Russia's loan requests were in fact systematically denied in most French, English, and U.S. money markets. In 1904, after war broke out between Russia and Japan, Schiff lobbied tirelessly among commercial adversaries and cohorts alike to grant high-risk war loans to the Japanese. About $ 100 million, suddenly infused, quickly armed the underequipped Japanese, allowing them to score a series of humiliating victories.  Schiff's loans were officially recognized as the pivotal factor in Japan's victory, and the Jewish leader was commemorated in Japanese newspapers and history books as a new national hero. 
The banking boycott and the financing of Japan's victory were only the first rounds. In 1906, Schiff and other influential Hofjuden formed the American Jewish Committee. Their first major objective was abrogation of the Russo-American commercial treaty, the legal basis of all friendly relations with Russia. The Committee asserted that the czar's denial of Russian visas to Jewish American citizens was an affront not just to America's Jewish citizens but to the United States itself. 
Although William Taft had issued a presidential campaign promise of abrogation, he refused to honor his pledge once elected. During a February 1911 White House luncheon for Committee leaders, when Taft rendered his final refusal to abrogate, Schiff warned, "We had hoped you would see that justice be done us. You have decided otherwise. We shall now go to the American people." Schiff then stalked from the room, refusing to even shake the president's hand. On the way out, Schiff whispered to fellow Committee leaders, "This means war!" 
Calling upon all friends and resources, the Committee began a widespread public appeal to have Congress force the president to end commercial relations with Russia. Within weeks, House and Senate abrogation resolutions -- each personally approved by the Committee -- were prepared. On December 13, 1911, after the House voted 300 to 1 to abrogate, Taft capitulated, and two days later issued instructions to terminate the treaty. 
Despite abrogation, the czar would not yield. Massacres continued, and the Jewish death toll rose. So the banking boycott was tightened. Its effects became most destructive, however, during World War I, when the czar needed multimillion-dollar military loans. Committee members were widely criticized for the stubborn continuation of their boycott even as it threatened the Allied war effort. But the boycott remained in effect until the monarchy was toppled in 1917. 
Throughout the nearly fifteen years of anti-czar boycott and backlash, threats of retaliation against Russian Jewry never deterred the men of the Committee. And in fact, during the anti-czar crusade, thousands of Russian lives were lost and hundreds of thousands more were devastated in pogroms. But the Committee held that the anti-Semitic outrages of one regime could spread infectiously if not quarantined.
Jacob Schiff addressed the issue in a 1905 cable to Russian premier Count Sergei Witte: "No doubt ... your local authorities, seeing the coming of the end of the old regime, . . . have in their rage . . . instigated the populace against the Jews .... Jewry in general will have at least this consolation; that the present awful sufferings of their co-religionists will not have been for naught, nor their blood spilled in vain." A year later, President Theodore Roosevelt warned Schiff that U.S. protests against pogroms might only provoke more harm from an indignant czar. Schiff ignored the warning, determined that such genocidal actions could not go unprotested. 
And in early 1911, Schiff acknowledged in a letter to Taft that as a result of "action on our part, pogroms and massacres of Russian Jews, such as shocked the world in 1905, might be repeated." But he assured the president that the world Jewish community and even the Russian Jews themselves knew such risks were unavoidable. The responsibility for bloody reprisals would be taken "upon our own shoulders," said Schiff. He added, "it was recognized by our co-religionists that in such a situation, as in war, each and every man, wherever placed, must be ready to suffer, and if need be to sacrifice his life." 
The art of economic and political confrontation -- public and private -- was thus a tested and endorsed tradition of the American Jewish Committee. In 1929, Committee president Cyrus Adler wrote an authorized biography of the great economic warrior of the Jews, entitled Jacob H. Schiff, His Life and Letters. The book detailed Schiff's and the Committee's tradition of unrelenting economic and political retaliation -- regardless of the short-term risks -- against those who would threaten Jewish rights. The book's foreword hoped its accounts of staunch Jewish defense would "prove of some value in guiding and inspiring others. 
For the three and a half decades before Hitler's rise to power in 1933, the Jews of America were actively engaged in international and domestic boycotts to fight anti-Semitism. They used the backlash weapon to fill newspapers and congressional hearing rooms with the gruesome truths of Jewish oppression. The Jews of America could lead public opinion and marshal government action. They had this power and they used it continuously.
Wielding this power inspired the conspiracy stories. And so Jewish leaders were often reluctant. But what choices did they have? After its expulsion from Israel in the second century, Judaism became a religion without a state and thus without an army.
Papal legions could crush rebellions. Crusaders could invade lands. Islamic armies could conquer and convert. To survive, Jews could only use what they had. And what they had was what they were allowed to have. For centuries, denied lands, denied access to the professions, denied military rank, Jews were forced to deal with money, with trade, with middlemanship, with bargains, with influence, with the portable professions. And so Jews fought fire not with fire but with money, with the media, with access to high position, not in some imaginary conspiracy to dominate the world but in an ongoing effort to stay one step ahead of the blade, the noose, and the burning stake.
Yet the Jewish leaders most skilled in wielding the boycott and backlash weapon would in 1933 refuse, in part because the enemy was now Germany, Fatherland of the Committee. It was now German Jewish blood that would be spilled -- not Russian Jewish. It was now their own uncles and lifetime friends whose lives would be subject to reprisal in any war for Jewish rights.
Those skilled in using Jewish weapons would also refuse because a wholly new tactic would now be used to shape Jewish destiny. Palestine would be the new solution. Hence, the question was now whether to use or not to use the one weapon Jews had, the one weapon they knew how to use: boycott and protest.
Yet the one weapon Jews had was the one weapon Hitler feared.