Some time ago, when the late. Hugo Stinnes was at the zenith of his tremendous financial power in Germany, rumors were spread that he was of Jewish origin and, while there were no reliable proofs to that effect, the supposed Semitic aspect of his physiognomy led many people to believe in the truth of these reports. But if it was not substantiated that Stinnes was a Jew, it is well known that the new financial wizard of Germany, who is today the strongest contender for the place which Stinnes occupied, is not only a Jew, but an orthodox Jew to boot. Jakob Michael is his name. Although he is but 32 years of age, they call him here the “King of the Boerse.”
The story of Jakob Michael’s rise to power reads like an absorbing novel. Like that other Jewish financial prodigy of this decade, Castiglani of Austria, Michael started out as a comparatively poor boy who ventured into big enterprises during the war and multiplied his first small investment into millions of dollars. From an article in a magazine here we learn that Michael is the son of a Jewish merchant on a small scale. When still a young boy he worked as a clerk in a counting house in Frankfort. As he has a great dislike for publicity it has been impossible to find out where be was born. Some say he came from Galicia, others claim that his parents lived in Frankfort itself. Anyway, he was in Frankfort at an early age. He learned a great deal about the metal and iron industries at the counting house where he was employed for some years. Later, spurred on by ambition, he ventured into business on his own with the 15,000 marks which his father and kinsfolk contributed. That was several years before the war.
At that time most of the important commodities were already controlled by large interlocking trusts. But there was one commodity which had not yet been cornered by the big money men, and that was radium. Young Michael dealt in radium. Before long he was supplying radium salts to laboratories as far apart as Paris and Tokio.
It is said that he was the first man in the business. If so he certainly has accomplished a big thing and fully deserves his success.
When the war came he took advantage of a breach in the system of organization of raw materials and got another running start. Rathenau’s round-up of raw material had overlooked one metallic substance, tungsten, which is found in conjunction with chalk and lead oxide, and was required for the hardening of steel and the production of electric lights. It was indispensable when the sea was blockaded and the supply from abroad cut off. The trader in radium saw his chance while others blindly passed it by. He bought for a song accumulations of ore waste in the Erzgebirge. From this waste he got the needed tungsten, which presently was of great value.
With the end of the war and the sudden ending of contracts and the fall of prices he seemed to he ruined, but the inflation period saved him by wiping out his debts.
Michael now set about getting a foothold in the chemical industry, at the same time consolidating his financial standing by setting up a bank and holding company for his interests.
In this way he began to weave a net of banking combinations and, by buying up block after block of shares in chemical and financial organizations, he became, according to the accounts given here, master of the money market.
The list of the enterprises which he owns or controls is very impressive, including some half a dozen banks and twice that many industrial concerns. The banks include the Deutsche Vereinsbank, Hannoverische Boden Credit Bank, Textile Credit Bank and Mitteldeutsche Credit Bank. It has been said that he was particularly busy accumulating influence in this last. It has also been said that he has been buying heavily with a view to getting entrenched inside the Stinnes concerns, especially the Rhine-Elbe Union, but his most profitable investments are in the metal and chemical industries.
Many people here regard Michael as the coming big man in German industry and finance. At 32 he is well on the way to taking the place of the late Stinnes.
Some who know him assert that he is an orthodox Jew and go even so far as to state that in his own immediate concerns he employs only people who are orthodox Jews.
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The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
