Background
Goldschmidt was born on December 31, 1882, in Springe, Germany, the son of an impecunious merchant, Marcus Goldschmidt, and Lina Bacharach Goldschmidt.
Goldschmidt was born on December 31, 1882, in Springe, Germany, the son of an impecunious merchant, Marcus Goldschmidt, and Lina Bacharach Goldschmidt.
Goldschmidt attended the school in Kassel. Although he aspired to be a lawyer, family circumstances obliged him to forgo a higher education.
After serving as an apprentice in the Kassel banking firm of H. Oppenheimer, Goldschmidt moved to Berlin in 1907 to take a position in the banking establishment of Emil Wechsler. Despite the lack of family connections usually necessary for success in the financial community, Goldschmidt quickly won a reputation for outstanding business instincts and entrepreneurial talent. In 1910 he joined with Julius Schwarz to found the brokerage house of Schwarz, Goldschmidt and Company, and during World War I he made a fortune speculating on the stock exchange. In the summer of 1918 the Nationalbank für Deutschland, a Berlin bank of the second tier that was seeking more dynamic leadership, invited Goldschmidt to head its securities department. The other major figure in the Nationalbank was Hjalmar Schacht, who had been recruited two years earlier to take charge of the credit department. Before long the two men found themselves at loggerheads. Goldschmidt expanded the Nationalbank's operations rapidly. He first bought out the Bremen-based Deutsche Nationalbank, a small establishment with a charter for branch banking. This acquisition enabled Goldschmidt to convert his own bank's structure and to open branches outside Berlin. Then, in 1922, he arranged a merger with the Darmstädter Bank, an old-line joint-stock bank that, despite its proud tradition, had failed to keep up with the times. The combined institution, called the Darmstädter und Nationalbank (or Danatbank), was the fourth largest bank in the Reich. Under Goldschmidt's leadership it grew so fast that by 1929 it had overtaken the Dresden Bank and the Disconto-Gesellschaft and was beginning to challenge the Deutsche Bank, long the dominant force in German finance. German joint-stock banks of that period combined the functions of deposit banks, investment houses, brokerage firms, and certified public accountants. Goldschmidt sat on the boards of more than 100 corporations dispersed throughout Central Europe. His interests reached into shipping, steel, electric power, mining, insurance, aviation, textiles, and chemicals. He also remained the real power behind the International Bank of Amsterdam, which he had founded in 1924 as a conduit to channel investment funds from foreign banks to German borrowers. Goldschmidt professed not to worry unduly about the slender capital base that underlay his bank's wide-ranging activities. In June 1930 he admitted to the Committee on Finance and Industry in London that 34 percent of the Danatbank's deposits came from abroad. But dependence on mobile foreign capital, he argued, was a risk German bankers had to assume because of a shortage of domestic funds. Within a year events proved these calculations excessively optimistic. Foreign depositors became alarmed at the extent of Nazi gains in the September 1930 Reichstag elections. Their unease mounted the next spring when the Brüning government undertook a series of provocative initiatives in foreign policy, including an attempted customs union with Austria. A run on German banks began. Goldschmidt struggled to keep his bank afloat, but competitors at the Deutsche Bank declined to help and the Reichsbank declared itself unable to grant credit because of its own exchange losses. On July 13, 1931, the Danatbank failed to reopen, touching off a full-scale financial crisis. The bank was reorganized under the aegis of the Vereinigte Stahlwerke, and Goldschmidt, although deprived of his equity holdings, continued as a salaried manager. But in another government-sponsored reorganization the following year, the Dresden Bank absorbed the Danatbank and Goldschmidt lost his position. Although he normally worked a twelve-hour day in his office at the Schinkelplatz, Goldschmidt also cut a figure in Berlin society during the Weimar republic. Goldschmidt became a favorite target of Nazi propaganda. Goebbels held him up to opprobrium as the archetypal Jewish financier. Amply forewarned, Goldschmidt left Germany when Hitler came to power, taking with him most of his fortune and art collection. After three years spent in European capitals, Goldschmidt arrived in New York City in 1936. Shortly after the Kristallnacht pogrom of November 1938, Nazi authorities ordered his arrest for failure to pay 1. 8 million marks in "Reich flight tax, " but by this time Goldschmidt had reconstructed his life in the United States. He became an American citizen in 1944. Goldschmidt made an American business career, although on only a small scale. He became chairman of the Pierce Governor Corporation, a manufacturer of automatic speed control devices in Anderson, Indiana; and, at the invitation of a fellow artlover, Sam Lewisohn, he joined the board of the Tennessee Corporation. But most of his time was devoted to nonbusiness pursuits. He gained renown as an art collector and lent pieces for numerous exhibitions. Goldschmidt died on September 23, 1955, in New York.
Goldschmidt held conservative political views: he blamed the severity of the depression on wage rigidity and an "excessive development" of the social insurance system. In the early years of the Weimar republic, he frequently counseled the government on financial policy. Chancellor Wilhelm Cuno thought of naming him to a proposed financial directory in 1923; and Chancellor Heinrich Brüning paid tribute to his patriotism in the crisis of 1931.
Member of the Foreign Policy Association, member of the Academy of Political Science, member of the Museum of Modern Art and the Metropolitan
On April 8, 1913, Goldschmidt married Sophie Joseph; they had one son. He married Chantal Julia in 1947.
