Julius Rosenwald

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Sears, Roebuck & Company

In 1893, Richard Sears and Alvah C. Roebuck renamed their watch company Sears, Roebuck & Company and began to diversify. Rosenwald and Weil was a principal supplier of men's clothing for Sears, Roebuck. The volumes of unsold merchandise caused by the Panic of 1893 and his declining health led Roebuck to leave the company.

Roebuck placed his interest in the company in the hands of Sears who, in turn, offered that half of the company be sold to Chicago businessman Aaron Nusbaum, who in turn brought in Rosenwald, to whom Sears owed money. In August 1895, Sears sold Roebuck's half of the company to Nusbaum and Rosenwald for $75,000. The new Sears, Roebuck and Company was re-incorporated in Illinois with a capital stock of $150,000 in August 1895. Sears and Rosenwald got along well, but Nusbaum, who was Gussie Rosenwald's brother, was a problem. Sears and Rosenwald bought him out for $1.3 million in 1903.

Rosenwald brought to the company a rational management philosophy and diversified product lines: dry goods, consumer durables, drugs, hardware, furniture, and nearly anything else a farm household could desire. The company's initiative at this time was particularly fortuitous with the initiation of Rural Free Delivery by the Post Office in 1896. From 1895 to 1907, under Rosenwald's leadership as vice president and treasurer, annual sales of the company climbed from $750,000 to upwards of $50 million. The prosperity of the company and their vision for greater expansion led Sears and Rosenwald to take the company public in 1906, with $40 million in stock. Rosenwald turned to his old friend Henry Goldman, who was now a senior partner at Goldman Sachs, to handle the initial public offering of the stock. After Sears resigned the presidency in 1908 due to declining health, Rosenwald was named president.

On January 2, 1915, Rosenwald was indicted in Chicago for a failure to file a personal property tax schedule. One commenter described the indictment as "a shot heard around the world". Prior to the indictment the Tax Board of Review scheduled the value of Rosenwald's Sears' stock at $7,500,000. Rosenwald declared this to be greatly excessive and additionally claimed that the stock of the New York company did not represent tangible assets. The indictment was quashed in March 1915 when Rosenwald's attorneys convinced the Court that the section of law which provided for prosecution of such cases had been repealed.

The company was laid low during the post-World War I recession as a severe depression hit the nation's farms after farmers had over-expanded their holdings. To bail out the company, Rosenwald pledged $21 million of his personal wealth. By 1922, Sears had regained financial stability. Two years later, in 1924, Rosenwald resigned the presidency, but remained as chairman; his goal was to devote more time to philanthropy. First he oversaw the design and construction of the company's first department store within Sears, Roebuck's massive 16-hectare (40-acre) headquarters complex of offices, laboratories, and mail-order operations at Homan Ave. and Arthington St. on Chicago's West Side. The store opened on February 2, 1925. After leaving the presidency, Rosenwald was appointed chairman of the Board of Sears, a position he held until his death in 1932.

Philanthropy

Rosenwald believed that having money meant that you needed to use it responsibly, thus a large part of his income was donated to charity. Hasia R. Diner, Rosenwald's biographer, says that this philosophy was part of this Jewish identity and part of the biblical injunction "remember the stranger for you, too, were strangers." It also reflected his desire to make America a more inclusive place that would offer refuge for Jews and others who faced inequities or justice for all.

Simply put he explained, “What I want to do is try and cure the things that seem wrong”.

This line of thinking resulted in strong ties to the African American population of the early twentieth century. One of his most noted contributions was fostered by his partnership with Booker T. Washington. Additionally, Rosenwald was concerned about justice for all, and he believed that the plight of African Americans was deeply connected with the inequities faced by Jews throughout their history. This became even more important to him after meeting Booker T. Washington before the start of the first World War. He explained that his desire to improve education for African Americans in the U.S. when he said that “very few persons are interested in the education of the Negro that I have deemed it wiser to concentrate my efforts in that direction”. Rosenwald’s philanthropic pursuits thus combined his strong sense of responsibility to aid in social inequality with his reverence for education and learning.

After the 1906 financial reorganization of Sears, Rosenwald became friends with Goldman Sachs's other senior partner, Paul J. Sachs, who often stayed with Rosenwald during his many trips to Chicago. The two would discuss America's social situation, agreeing that the plight of African Americans was the most serious in the U.S. Sachs introduced Rosenwald to two prominent educators and proponents of African-American education, William H. Baldwin and Booker T. Washington. Rosenwald made a common cause with Washington and was asked to serve on the board of directors of the Tuskegee Institute in 1912, a position he held for the remainder of his life. He endowed the institute to free Washington from fundraising and enabled him to devote more time managing the institute.

His philosophy regarding philanthropy vs. charity was to involve the recipients in the contribution via a matching system. The matching system provided part of the budgets of the Rosenwald schools which were matched by local citizens, both blacks and white, but also supported by the local municipality via local taxes. Through this initiative public schools for African American students were created with the southern states and their own constituents took responsibility.

He later established his Rosenwald Fund in 1917 which provided fellowships and other contributions primarily, but not only for African Americans. Its stated goal was for "the well-being of mankind". Unlike other endowed foundations, which were designed to fund themselves in perpetuity, the Rosenwald Fund was intended to use all of its funds for philanthropic purposes. As a result, the fund was completely spent by 1948.

Rosenwald’s Jewishly-motivated empathy with former slaves in the South was publicly acknowledged in his own lifetime. Rosenwald reportedly found personal satisfaction in helping others, Jews and non-Jews: “All the other pleasures in life seem to wear out, but the pleasure of helping others in distress never dies.”

Death and legacy

Julius Rosenwald’s impact on America, via the retail revolution he created through Sears, Roebuck & Company as well as his wide-ranging philanthropy remain largely unknown, much having to do with his insistence to remain anonymous by withholding his name from the projects he funded, as well as his choice to “sunset” the Rosenwald Fund.

Rosenwald died at his home, now Rosewood Park, in the Ravinia section of Highland Park, Illinois, on January 6, 1932, aged 69.

His bust was created in bronze, and it was among those of eight honored industry magnates which were installed between the Chicago River and the Merchandise Mart in downtown Chicago, Illinois.

During World War II, the Liberty ship SS Julius Rosenwald was built in Panama City, Florida, and named in his honor.

He was inducted into the Junior Achievement U.S. Business Hall of Fame in 1992.

A 2015 film, Rosenwald, directed by Aviva Kempner documents his life and philanthropy.

A Chicago Public School system elementary school, located at 2601 W 80th Street on Chicago's Southwest Side, was named after Rosenwald in 1952.

Rosenwald's boyhood home, which is part of the Lincoln Home National Historic Site, was renamed in his honor in 2020. A plaque there commemorates his work.

When looking back on his life and success, Rosenwald declared, "Most people are of the opinion that because a man has made a fortune that his opinions on any subject are valuable. For my part, I always believe most large fortunes are made by men of mediocre ability who tumbled into a lucky opportunity and couldn’t help but get rich and that others, given the same chance, would have done far better with it." Thus, although Julius Rosenwald is one of Chicago's most admired Jewish businessmen, he maintained a low profile throughout his life. He refused to be the source of biographies and did not want his name to be affixed on buildings or institutions. He even insisted that his generous philanthropic contributions be matched by others so that he would not be credited with the title of 'sole donor'. However, he is well-remembered today through many books, such as Julius Rosenwald: The Man Who Built Sears, Roebuck and Advanced the Cause of Black Education in the American South by Peter M. Ascoli, and Julius Rosenwald: Repairing the World by Hasia R. Diner. A new screenplay, 5000 schools, based on his story will come out soon, directed and written by Tom Stern.

Julius Rosenwald

Julius Rosenwald

Article

Notable quotes

Related journals

Live room · 1 here

Article

Early life

Marriage and family

Sears, Roebuck & Company

Philanthropy

Jewish connection

African American education

Schools, universities, and museums

YMCAs for African Americans

NAACP

Exhibition in Washington, DC

Samuel Reshevsky

County Extension

Death and legacy

US National Park network in his honor

Related journals

Notable quotes

About Julius Rosenwald

About Julius Rosenwald

Article

Notable quotes

Related journals

Live room · 1 here

Article

Early life

Marriage and family

Sears, Roebuck & Company

Philanthropy

Jewish connection

African American education

Schools, universities, and museums

YMCAs for African Americans

NAACP

Exhibition in Washington, DC

Samuel Reshevsky

County Extension

Death and legacy

US National Park network in his honor

Related journals

Notable quotes