Julius Rosenwald

• Born: August 12, 1862
• Birthplace: Springfield, Illinois
• Died: January 6, 1932
• Place of death: Chicago, Illinois

Business executive and philanthropist

Rosenwald was a leader in the world of retail business, running Sears, Roebuck and Co. He was a civic leader and a generous philanthropist, who supported African American causes.

Early Life

Julius Rosenwald (JEW-lee-ihs ROH-zihn-wawld) grew up in Springfield, Illinois, the son of Samuel and Augusta Rosenwald, a German Jewish immigrant couple. His father was the president of the Springfield Jewish Congregation, and Rosenwald received religious instruction along with public school education. He left high school after two years, and he joined relatives who operated a clothing store in New York City. In 1884, he opened his own store, but the enterprise struggled.

In 1886, his father bankrolled a wholesale operation, selling lightweight suits, that was located in Chicago. Business success, marriage to Augusta Nusbaum, and the birth of five children followed. The business survived the devastating Depression of 1893 because of Rosenwald’s frugality and his shrewd decision to concentrate on low-cost clothing lines. Rosenwald was a successful merchant and well prepared to move on to business operations on a grand scale.

Life’s Work

A relative introduced Rosenwald to Richard Sears, one of the founders of Sears, Roebuck and Co. Sears had been working as a railroad station agent, and his retail career began when he acquired watches wholesale and sold them to other station agents. Sears was ambitious, and the modest start soon developed into a mail-order business featuring products aimed at rural families. Sears, a visionary in the field of marketing, moved the operation from Minneapolis to Chicago. His schemes often resulted in cash-flow problems, and Rosenwald invested $37,500 in the firm in 1895. This investment soon gave Rosenwald a major role in the daily operations and the long-term planning of the company. For years the different styles and skills of Sears and Rosenwald complemented one another. The economic downturn of 1907 led to a serious rift between the two, with Sears bent on major expansion, and Rosenwald in favor of prudent consolidation. Sears cited declining health as the reason for his retirement in 1908, and from 1906 until 1924 Rosenwald guided Sears, Roebuck and Co. to retail greatness.

Rosenwald made major changes at Sears, Roebuck and Co., reducing the large array of patent medicines for sale and canceling other products whose advertising claims were shaky. He also set a ceiling for the marketing budget, trusting quality to sell products for Sears. He was a leader in advancing corporate policies that aided employees, but, in 1911, he endured strident criticism from the Illinois legislature, which charged that entry-level female employees at Sears, Roebuck and Co. worked for near sweatshop wages. With the exception of that episode, Sears and Rosenwald were cited as role models of enlightened corporate policy.

While building Sears, Roebuck and Co. and raising a family, Rosenwald continued his observance of Judaism as a follower of the Reform rabbi Emil Hirsch. Hirsch urged his congregation to give back to the community with time and money, and Rosenwald took those obligations seriously. He donated to the Tuskegee Institute, Fisk University, and Howard University, which served African Americans, and he provided challenge grants to construct what were called “Colored YMCAs,” which promoted sports teams for African Americans, in several major American cities.

His best-known effort was the construction of thousands of Rosenwald Schools throughout the rural areas of southern states. Rosenwald required local African Americans and state departments of education to contribute to the project. The program was controversial. Some scholars charged that the schools helped perpetuate segregation and that they were intentionally inferior to local white schools. Another controversy arose from the decision by Rosenwald in 1920 to strip Tuskegee Institute of supervision of the project and turn it over to a white director. Rosenwald cited administrative problems as the basis of his decision, but the widow of Booker T. Washington, an African American activist with whom Rosenwald had worked closely, claimed that the decision was a blow to the African American quest for autonomy. Rosenwald put a premium throughout his life on efficiency: There is no solid evidence that his decision was racially motivated. As for the charge of segregation, Rosenwald was a pragmatist who wanted to get children in school and educated. The fact that African American literacy soared in the south from 1910 to 1940 is an indisputable tribute to his vision.

In Chicago, Rosenwald helped establish two housing projects and the rental apartments known as the Michigan Boulevard Garden Apartments. He also contributed to numerous museums and performing arts groups, and for decades he was a generous donor to the University of Chicago and served on its board of trustees.

In religion, Rosenwald worked to close the gap between Reform and Orthodox Jews in Chicago. He succeeded in getting the groups to consolidate their charity efforts into one organization. He also donated to an agricultural station in Palestine, although he did not consider himself a Zionist, and he played a major role in soliciting funds for a project to resettle Soviet Jews on farms in the 1920’s. He resigned from Sears, Roebuck and Co. in 1924 because of the poor health of his wife and because of his desire to spend more time on philanthropy. He died of heart and kidney ailments on January 6, 1932. Much of his fortune consisted of Sears, Roebuck and Co. stock, which plunged from thirty-two dollars a share when he died to ten dollars a share by the time his estate was settled.

Significance

Rosenwald had a long and distinguished career as a business executive and philanthropist. He took Sears, Roebuck and Co. from its early days and made it into a model of corporate efficiency. He was a leader in offering employee benefit programs. His numerous philanthropic undertakings, including generous support of educational and athletic programs for African Americans, showed his belief in progressive civic principles and traditional Jewish charity.

Bibliography

Ascoli, Peter. Julius Rosenwald. Bloomington: Indiana University Press, 2006. Provides a detailed look at the influence of rabbi Hirsch on Rosenwald but glosses over criticism of his philanthropy.

Hoffschwelle, Mary. The Rosenwald Schools of the American South. Gainesville: University Press of Florida, 2006. Offers valuable insights into the collaboration between Rosenwald and Booker T. Washington.

Weil, Gordon. Sears, Roebuck U.S.A. New York: Stein and Day, 1977. A popular history with a chapter on the career of Rosenwald.

Werner, M. R. Julius Rosenwald. New York: Harper Brothers, 1939. Useful source for information on Rosenwald’s early life.