Review: The Warburgs

the warburgs

The Warburgs: The Twentieth-Century Odyssey of a Remarkable Jewish FamilyRon Chernow. New York: Vintage, 1994.

Summary: The story of a prosperous and sprawling Jewish banking family who eventually established banking and philanthropic efforts in Germany, England, and the U.S., experiencing both great success and influence, and stunning disillusionment with the rise of Nazi Germany.

The Warburgs. It sounds like the title of a serialized TV drama chronicling a wealthy, influential, family with its own inner struggles, eccentric and driven characters, triumphs, tragedies and affairs. This wouldn’t be far off of the truth about this Jewish banking family whose rise began with the founding of M.M. Warburg & Co. in 1798.

I picked this up because I’ve thoroughly enjoyed Ron Chernow’s Alexander Hamilton and Grant (review). This is a much earlier work, and in many ways far more complicated, in telling the story of several generations of a family from the turn of the nineteenth century into the 1990’s. It was a family with two major and rival branches, the Alsterufer and Mittelweg Warburgs, and a family that became established on both sides of the Atlantic.

For much of the story, the Mittelweg side of the family was in the ascendent. The five sons of Moritz Warburg, exercised great influence on both sides of the Atlantic. Max Warburg stands out in the development of M.M. Warburg as a power house private bank in Hamburg before the rise of Nazi Germany. His elder brother Aby relinquished his place in banking for intellectual pursuits, amassing a unique library that reflected his synthesis of knowledge, bankrolled by his prosperous brothers, who stay by him during periods where his genius descended into insanity. Brothers Paul and Felix emigrated to the U.S. Paul was an economic genius who outlined the framework for our Federal Reserve System while Felix married into the Schiff banking family and became an influential partner in Kuhn, Loeb, in New York City and engaged in extensive Jewish philanthropy. Fritz fled Germany for Sweden.  Max remained and struggled to maintain his banking house’s clients in an increasingly hostile atmosphere and held out the hope that some accommodation could be reached with the Nazis. In the end, he turned the bank over to the Aryan Brinckmann, supposedly a caretaker for the Warburg interest, but who fought to retain control after the war.

The later part of the book chronicles the post-war trajectory of Warburg interests and the rise of the Alsterufer branch in the person of Siegmund Warburg, who established S.G. Warburg in England in 1946 and built it into a major investment banking firm before his death. Chernow’s portrayal of this financial genius was fascinating. We observe a leader who exercised perfectionist control over the firm while delivering excellence of customer service to both small and large investor, a man of both towering rages and refinement, one as much inclined to the philosopher’s retreat as to the hurley-burley of the financial world. The tense alliance/rivalry between him and Eric, Max’s son, over the re-establishment of the Warburg name in Germany accentuates the continued competition between the two branches of the family.

One of the themes is the tension the Warburgs struggled with over their German and Jewish identities, a tension many Jews in Germany faced. They, with other Germans, took great pride in the rise of Germany as a power, and saw their own efforts as part of this. Max even served as a pre-war director on the board of I.G. Farben, the chemical concern that manufactured Zyklon B, used to exterminate Jews in the concentration camps. We follow the gradual opening of the eyes of Max and other family members to the unfolding tragedy of Nazism and how a nation would willingly participate in the elimination of some of its greatest fellow citizens. Max both tried to encourage Jews to wait it out, and yet also helped bankroll and facilitate the flight of many others and was one of the last to leave while Jews could.

Another theme is the dissipation of Jewish identity through wealth and marriage outside the faith. Each generation was increasingly less observant, and the main thing that marked them out was philanthropic efforts. Some became secular, others married Christians, allowing children to be baptized and raised in Christian faith.

What is striking at the same time is a family marked by financial and intellectual genius, whether it was Moritz, the first of the Mittelwegs or Max, or his son Eric, who eventually succeeded in restoring the M.M. Warburg & Co. name in Hamburg. Jimmy, Paul’s son advised Franklin Roosevelt for a time, and flip flops between progressive and conservative stances, alienating him from most of those in power until he came back in favor during the Kennedy administration. One could go on and discuss the varied careers of the Warburg women, including Max’s four daughters.

One of the challenges was keeping all the names and family relationships straight! Chernow provides a family tree in the front matter and it’s good to keep it marked. What is striking is that he spins a fascinating narrative of this sprawling family, its hopes, its genius, its outliers, it’s impact and the cost of wealth over the generations. Even today, the Warburg name remains on Warburg, Pincus and M.M. Warburg & Co.  S.G. Warburg was bought out by Swiss Bank, became Warburg Dillon Read and later UBS Warburg before the Warburg name gave way to UBS Investment Bank. Chernow helps us understand the drive and the significant actors behind this enduring legacy of influence in the worlds of banking, philanthropy, and culture.