The Warburgs
Page 3
When Sara and Aby celebrated their silver wedding anniversary in 1854, the infirm Aby was beset with worry. He fretted about the Zagury fiasco and the bank’s slipping position with the Rothschilds. In 1855, his son Siegmund was apprenticing in London and Aby told him plaintively, “If you have the honour of seeing R. [Rothschild], you may tell him that we very much regret having to dispense entirely with his orders.”18 The following June, Aby wrote a will, canceled his summer trip, then ascended, at age fifty-eight, to his second-class train compartment in heaven where he would be safely apart from his wife. This left Sara doubly widowed, for she had to run both the family and the bank alone.
Sara was now a shrewd, worldly businesswoman, with red cheeks, a determined mouth, and jowly face. Her skin had turned to parchment, but she retained the bright, flashing eyes of girlhood. Assisted by a family friend, August Sanders, she courageously weathered her husband’s death and ran the bank with several trusted clerks—a remarkable feat for a woman of her day. She enlisted her precocious elder son, Siegmund, who was now twenty-one and was given power-of-attorney in the bank; his younger brother, Moritz, eighteen, was too young for such responsibility.
These two brothers would reenact the furious conflicts of Moses Marcus and Gerson. Even as children, they looked like offspring of different families. Siegmund had a round nose and thick lips and was as swarthy as a little Ethiopian. Moritz had straight, delicate features and a clear complexion. Siegmund was smart, gruff, hard-driving, funny, and temperamental, while Moritz, a pampered dandy and engaging flirt, was languid and charming, the pretty boy in a queer-looking brood, and definitely Sara’s favorite.
Soon after Aby’s death, Sara was faced with one of the great crises in Warburg history, which she managed to convert into a famous triumph. The 1856 end of the Crimean War precipitated a steep deflation in commodity prices, which in 1857 toppled American banks and railroads. The panic spread to Scandinavia and then to Hamburg, where financial hysteria engulfed the stock exchange. The Warburgs and other local bankers had to redeem a flood of speculative bills they had endorsed and it looked as if many banks and trading firms would collapse. Sara’s daughter, Rosa, had married Paul Schiff, who was managing director of the Credit-Anstalt, a Viennese bank recently formed by the Rothschilds. Paul not only put a vast amount of money at the Warburgs’ disposal, but served as intermediary in talks to rescue the city.
To shore up local firms, the Hamburg Senate made an unsuccessful bid for a loan from Berlin, Paris, and other financial capitals. Then in November 1857, the Austrian finance minister dispatched Paul Schiff to Hamburg to investigate a possible rescue loan, with the upshot that Austria sent a train loaded with silver ingots to the Hanseatic City. The transaction was approved by Emperor Franz Josef I. The availability of this fabulous cargo for loans to leading banks—the so-called Silver Train of financial legend—quieted the chaos; six months later, the silver bars were returned to Vienna, and the Warburgs won enormous goodwill from the operation. This initiated a long history of Warburg involvement with the finances of the city-state and emphasized the value of the family’s foreign contacts.
After this drama, the matriarchal Sara made Siegmund a partner in 1859 and Moritz in 1862. Although she soon ceded everyday control to the quick, decisive Siegmund, she yielded no royal prerogatives, and her wishes prevailed in all significant matters. She made Siegmund sign a partnership agreement that conceded her ultimate authority: “Although Herr Siegmund Warburg is empowered ordinarily to act according to his own judgment, he must nonetheless seek the opinion of Madame Warburg in matters of special importance, and to act in agreement with the latter.”19
Every evening after the stock exchange closed, Siegmund and Moritz reported to Sara’s house, where she grilled them on the day’s affairs. If they didn’t meet expectations, she probed. “Now explain yourselves. Siegmund, speak first.”20 Siegmund balked at her meddling, while Moritz was more sympathetic. It irked Sara that Siegmund sometimes skipped the daily briefings. There was something typically Jewish about this interplay between a strong, guiding mother and her talented, impressionable sons. Because many German Jewish businessmen engaged in overseas trade, they traveled frequently, leaving wives in charge of businesses in their absence and this made German Jewish women a particularly hardy breed. Honoring Sara’s wishes, her sons closed the bank early on Fridays and avoided the stock exchange on the Sabbath. After spending Saturday afternoons closeted with Sara, they headed back to the bank after sunset.
The clashes between Siegmund and Moritz were only slightly less boisterous than those between Moses Marcus and Gerson. Siegmund was a prodigious, driving worker, often staying late into the evening, whereas Moritz was congenitally indolent. They argued daily and their rows grew so thunderous that the entire street echoed with the racket. At first, Siegmund demoted Moritz to back-office duty until a fellow banker teased him, “You are supposed to have such a very pleasant brother, do send him round to me some time.”21 This was as much a veiled reference to Siegmund’s gruff temper as to Moritz’s cordiality. Siegmund was prone to tactless candor, while Moritz had a light touch and pleasing geniality. A natural division of labor soon arose: Siegmund ran the bank while Moritz handled outside contacts.
Like his grandson of the same name, Siegmund Warburg had a perfectionist streak and passion for excellence, which showed up in the fine handwriting he demanded of employees. A stout, virile man with a broad, bearded face and flashing eyes, he rode vigorously on horseback each morning. Enterprising and dedicated to the firm’s expansion, he had a reputation as a go-getter and risk-taker, quite unlike the conservative Moritz. It was Siegmund who elevated M. M. Warburg & Co. into the first rank of private banks. In 1863 the firm dropped its official title of Geldwechsler or money changers, assuming the far loftier designation of Bankiers. A tiny firm of ten employees, the bank sold bills of exchange, traded goods against government securities, and made loans. It had a messenger of heroic fidelity named Levien. While delivering bills one day, Levien keeled over from a cerebral hemorrhage. Yet “he clung to the briefcase with all his remaining strength and would not give up till another messenger whom he knew happened to pass and relieved him of it.”22 The bills safe, Levien claimed his heavenly reward after almost sixty years of Warburg service.
In 1865, Sara withdrew from the firm and moved to an impressive house at 49 Rothenbaumchaussee, but she continued to cast a proprietary eye on the bank for the next twenty years. Piloted by Siegmund, the firm moved to a prestigious location, 75 Ferdinandstrasse, in 1868. This was a prime corner spot slightly recessed from the squarish Inner Alster Lake and just a short stroll from the town hall and stock exchange. It stood hard by the headquarters of the great shipping and overseas trading concerns and signified a new Warburg centrality in Hamburg affairs. The Warburgs would steadily buy parcels adjoining this spot until they occupied the entire corner.
During the nineteenth century, Jewish emancipation occurred piecemeal in the various German states. In 1868, the last legal shackles were lifted from Hamburg Jews. From now on, they could marry gentiles, enter once-exclusionary guilds, and live anywhere they liked. After centuries of oppression, this sudden liberty would be the midwife of many wonders, a potent tonic to ambition, and help to transform a provincial banking house into a distinguished international firm. The Warburgs were buoyed by a fantastic sense of optimism, as stimulated by opportunity as they had long been toughened by obstacles. Instead of brooding over past injustice, Hamburg Jews responded with overwhelming and even slightly slavish gratitude for this long-awaited change. With the founding of the German Reich in 1871, Jews enjoyed civil rights throughout the new Empire.
The new freedom was at least partly illusory, for Jews were still blackballed from many positions in the military, civil service, universities, and judiciary. And citizenship brought fresh obligations, including compulsory service in the local militia. For the Jews, this wonderful moment was also fraught with distinct peril. Discrimination had acted
as a preservative to their identity, while freedom threatened to corrode their unity and dilute their culture. Henceforth, they would try to be both Jewish and German at once—with initially happy but ultimately tragic results.
Both Siegmund and Moritz married in the 1860s and brought forth large broods that would capitalize on the new freedom with an almost rapturous joy and energy. Nobody rivaled the Warburgs in marrying well—both sons married rich, smart, socially ambitious women. In 1862, Sara dispatched Siegmund to Kiev to woo Théophilie Rosenberg, whose father owned vast forests. When her wealthy family vacationed in Germany each year, they had to travel by night, with the carriage curtains tightly drawn, to avoid brigands. As if he could only spare limited time from business for this transaction, the impatient Siegmund brusquely proposed to the twenty-two-year-old Théophilie. When she asked for time to consider, he refused. “No way, young lady. Either you decide at once or not at all.”23 She accepted. If Siegmund didn’t exactly let love ripen on the vine, it may have been that the proposal was a formality in this brokered liaison. Théophilie’s father had offered to fortify Warburg bank capital with a dowry of eighty thousand Mark Banco, which likely settled the matter expeditiously in advance.
The marriage spawned a byzantine network of connections that converted the Warburgs into a small-scale multinational corporation. Théophilie’s older sister, the chic Anna, was married to Horace, Baron de Gunzburg, a cosmopolitan Russian with banks in St. Petersburg and Paris. Enriched by selling vodka to the Army during the Crimean War, the Gunzburgs belonged to a select group of Jews ennobled by the czar. For a time, Théophilie resided with her brother-in-law and sister in Paris, learning fluent French, becoming a francophile, and acquiring elegant airs in their splendid salon. Baron de Gunzburg befriended the French emperor and later advised the ill-fated Czar Nicholas II. Tightening the Russian tie, Siegmund and Théophilie’s daughter married Anna’s son.
The other fetching Rosenberg sisters married a rich Odessa banker, a Bavarian baron, and Budapest banker.
Such empire building by courtship was an efficient way to preserve and extend the capital of private family banks. In the last analysis, marriage brokers were perhaps the unacknowledged arbiters of financial power in nineteenth-century Europe. One should note, however, that these splendid marriages, so roundly toasted by the Warburgs, would later be transmogrified by the Nazis into the treacherous maneuvers of a worldwide conspiracy.
The fashionable Théophilie imported a French elegance into Hamburg. The preferred style of the local haute bourgeoisie was rich and substantial, but in a subdued, reserved way. Even the town’s wealthiest merchants suspected frippery and courtly French manners. The Hamburg ethos was democratic and middle class—more that of a meritocracy than an aristocracy. Its bankers were businessmen, not court ornaments. So Théophilie was apt to strike her neighbors as haughty and affected and she returned the favor fully by looking down on their boorish provincial manners. She had thirteen children, six of whom died in infancy, and perhaps the strain of nonstop breeding cast a melancholy pall over her personality. The Warburgs would nickname her Théophilie with the Sour Face.
The heavy burdens that Siegmund shouldered as a young man had darkened his personality, giving him an incendiary temper and a somber air of premature age. His sister-in-law, Charlotte, noted his gloom. “Through the heavy, responsible position that he was burdened with in his younger years, there was in his facial expression and his entire being something serious and dignified that made his stocky figure seem older.” While his underlying warmth was evident in his sudden and robust gusts of laughter, the sheer violence of his temper sometimes scared her.24
Yet compared to the dour Théophilie, Siegmund was well rounded and seemed almost lighthearted. He attended the opera weekly and sometimes launched into impromptu arias from Carmen over breakfast. Merging German and Jewish culture, he often joined his children for Weber songs after Saturday morning prayers. Sociable and funny, highly irreverent, he would fling his napkin facetiously across the table at Théophilie when she lapsed into one of her blue funks. She mostly left the children’s education to French governesses. A strong-willed martinet, she demanded strict behavior, while Siegmund, with a keen eye for the absurd, roared with laughter at his children’s pranks and loved it when his son, Aby S., locked his tutor in his room.
In the 1870s, Siegmund and Théophilie moved from their apartment above the Ferdinandstrasse bank to a pretty street called Alsterufer or “Alster shore.” Their magnificent five-story house at Number 18 had belonged to the Prussian minister to Mexico. They now lived in Hamburg’s most stately neighborhood, filled with senators, shippers, and aristocrats who built imposing villas far removed from the port’s raucous bustle. Their house faced the gravel paths, meadows, and flower beds by the rambling Outer Alster Lake, affording them splendid views of swans, sailboats, rowing clubs, and lakeside cafés. On clear summer days, the lake had a sparkling clarity. On autumn and winter days, it had a melancholy beauty, often enveloped in a gray fog that softened the distant spires and muffled their chimes.
Siegmund and Moritz belonged to the last generation of Warburgs who followed Jewish custom strictly. Already in 1819, the Reform Temple in Hamburg had dabbled in more secular Judaism, dropping mention of the Messiah and a return to the Holy Land from its prayer book. The Warburgs still resisted such concessions to the surrounding culture. In his new home, Siegmund outfitted a private synagogue, complete with Torah scrolls and rows of pews. Each morning, wrapped in his prayer shawl, he prayed with the black leather tefillin strapped to his left arm and forehead. He forbade his children from eating nonkosher food at neighbors’ homes or writing or working on Saturdays. As a leader of the Jewish community, he used his downstairs rooms for High Holy Day services and hired cantors for the occasion.
Having grown up in a circumscribed Jewish world, Siegmund remained a stickler for precise observance and had no use for the reformers. Once he rented a locomotive after missing a train to Karlsbad, fearing he might arrive after the Sabbath sundown. Another time, Siegmund and Théophilie took their son, Aby S., to a famous doctor in Cannstatt. To ensure kosher food, they hired a cook and rented an apartment for her. In later years, traveling to Genoa for his silver wedding anniversary, Siegmund brought his own ritual slaughterer along for kosher meat. If pious, he was never prudish. One day, Moritz informed him that a bank employee had fathered an illegitimate child. The fastidious Moritz wanted him fired, whereas the more red-blooded Siegmund dismissed the affair with a flippant remark: “I hope the mother is a pretty girl.”25
Moritz was a handsome young man, hopelessly spoiled by an adoring mother. He grew up surrounded by four homely sisters and his good looks must have struck them as a small genetic miracle. After work, they gently slid off his shoes. At receptions, he wore gloves to avoid chafing his delicate skin when shaking hands. For his military service, he decided to lift a bugle and not a rifle, inviting a sergeant to his garden each Sunday for music lessons. He strode through life with well-fed serenity. Even in later years, his broad face was baby-smooth and never betrayed worry. He savored life’s pleasures—good food, wine, cigars, music. A music aficionado, he kept leather-bound copies of his favorite Lieder. Regretting that Hamburg had no memorial to its native son, Brahms, he had a bust of him created for the music hall. Enamored of his own voice, Moritz made long-winded speeches at holiday dinners while carving the bird—until hungry guests prodded him to stop talking and resume cutting.
As a businessman, Moritz displayed a caution that braked Siegmund’s periodic impetuosity. He displayed little of the gambler, preferring instead to sit on securities long-term rather than trade them, noting, “It is easier to make money with your behind than with your head.”26 Highly ethical, he carried a scrap of paper in his pocket for fifty years with the celebrated lines from Othello: “But he that filches from me my good name/Robs me of that which not enriches him/And makes me poor indeed.”27 While the Warburgs would certainly engage in their
quota of subtle intrigues, they would remain scrupulously honest, and Moritz deserves much of the credit for this almost instinctive rectitude.
Nothing captures the man’s vanity better than his rotating wigs. To dupe the world, he bought three of them. The first had long hair and suggested he needed a haircut. The second simulated freshly cut hair. The third was of an intermediate length. One grandson recalled that the day’s wig stood ready at Moritz’s bedside “on a contraption something like a modern lady’s hatstand,” so he could cover up his baldness as soon as he stepped from bed.28 Sometimes, on cold evenings, he covered his sensitive scalp with a woollen cap. The pampered Moritz never even shaved himself. Instead, a young rascal named Gottschalk Sander—the Warburgs nicknamed him “The Messenger of the Gods”—came to the house every morning. As he wielded the blade, he pumped Moritz full of gossip. When Sander later developed a case of trembling hands, the Warburgs thought it time for a career change and secured work for him elsewhere.
Moritz’s insistence upon Jewish observance prompted more rebellion than imitation among his children. All his chief philanthropic activities—founding a local orphanage, supporting the Jewish hospital and Talmud Torah school—revolved around Judaism. Serving on the board that governed the affairs of Hamburg’s sixteen thousand Jews, he shrank from associating too much with Reform or baptized Jews. On Friday nights, he only invited non-smokers, since he didn’t want to offend cigar-smoking guests by citing the Sabbath prohibition on lighting fires. When Moritz recited the Hebrew prayers, a butler would recirculate the men’s hats on a tray so they could cover their heads. Late every Saturday afternoon, he sat with an unlit cigar in hand, suppressing, with placid heroism, an importunate craving for tobacco until the setting sun permitted him to smoke. Moritz was popular on one bank board because he always scraped off his nonkosher lobster and oysters onto a neighbor’s plate.