by Ron Chernow
Later on, Max would pin more hopes on Schacht than upon anybody else. If, in the grimmest days of the 1930s, he could indulge the belief that the Warburgs still enjoyed some sacred place in the German scheme of things, it was partly due to his special relationship with Dr. Schacht.
In the early 1920s, anti-Semitic assaults against the Warburgs solidified into a sweeping theory that tied them to a conspiracy with other Jewish bankers. The major source material was The Protocols of the Elders of Zion, an infamous forgery perpetrated by the Okhrana, the czarist secret police. This devious work sought to strengthen czarist despotism by playing upon fear of Jewish revolutionaries. The book recounts secret speeches supposedly delivered by a group of Jewish elders to a cabal of coconspirators, outlining a plan for world domination. (It actually reworked a pamphlet written by Maurice Joly in 1864 that ascribed maniacal ambitions to Napoleon III.) An English translation circulated in Washington and Germany after the war. In 1919–20, it was handed out to White Russian troops to discredit the Bolshevik Revolution as a global Jewish plot. The Warburgs were putative masterminds on the banking side.
In early 1920, Henry Ford laid his hands on a London copy and greatly amplified its themes. That May, his Michigan newspaper, the Dearborn Independent, ran a front-page article, “The International Jew: The World’s Problem,” which launched seven years of invective. As the isolationist Ford pondered the failure of his wartime peace campaign, he identified the Warburgs and other Jewish bankers as the warmongers who had thwarted him. That the Warburgs had opposed the war and suffered from it financially didn’t seem to faze him. The Protocols allowed Ford to attack both Communists and Wall Street financiers by showing a hidden affinity between them.
To the benighted, the Dearborn Independent had to explain exactly why conservative, Republican Jewish bankers would aid Bolshevism. The paper noted Schiff’s animus toward Russia and financing of Japan, turning this into an insidious German-Japanese plot to undermine Russia. Max Warburg was alleged bagman of the conspiracy who gave money to Leon Trotsky. Not content to cite actual Jewish participants in the Bolshevik Revolution, the Dearborn Independent found them crouching behind every rock. According to the newspaper, Kerensky’s real name was Adler, and Lenin’s children spoke Yiddish to each other. Noting that Rothschild in English meant “Redshield,” the paper said this was why Bolsheviks were called “Reds.” Ford had a field day with Paul Warburg, who linked the Jewish banking cabal to the Federal Reserve Board that Ford so despised. Of Ford’s charges, perhaps the most damaging was that Paul and Max had jointly concocted the Versailles Treaty—even though Paul hadn’t gone and Max hadn’t signed the document. The Dearborn Independent wrote, “As has been recounted in the press the world over, the brother from America and the brother from Germany both met at Paris as government representatives in determining the peace. There were so many Jews in the German delegation that it was known by the term ‘kosher,’ also as ‘the Warburg delegation.’ ”49
The Warburgs held special attractions for conspiracy theorists. Because they had intermarried with many banking families, their family tree could be portrayed as the dangling and poisonous tentacles of a strangling monster. As citizens of different countries, they could be made to typify “international Jewry”—treacherous, rootless, forming a Fifth Column in every country. And since the brothers were politically active in their respective countries, they could be depicted as treasonous foreign agents.
When the American Jewish Committee learned that Ford and the Ku Klux Klan bankrolled anti-Semitic propaganda in Germany, they debated what action to take. Should Paul bring a libel suit? Should they boycott Ford products? Or try for a congressional probe? In the end, they decided not to dignify Ford’s efforts with a response. Nobody knew whether a counterattack would fan the flames of prejudice or blow them out. Jacob Schiff endorsed silence. “If we get into a controversy we shall light a fire, which no one can foretell how it will be extinguished.”50 The timidity was short-sighted: Ford didn’t apologize for his anti-Jewish statements until 1927, even though the Times of London exposed the Protocols as a forgery in 1921.
In 1921, Max sued Nazi publicist Theodor Fritsch for publishing a German edition of Ford’s The International Jew. It contained a bogus letter from Berlin banker Carl Fürstenberg, telling his Bolshevik comrades that they should transfer their money to a special account at M. M. Warburg & Co. Winning the lawsuit, Max got a recantation printed in several papers. The next year, he discussed with Felix and the American Jewish Committee how to curb growing worldwide anti-Semitism. They feared that if they mounted a global campaign against slander, they might only play into the hands of their enemies, who would cite this as proof of the Jewish conspiracy. So Max argued in favor of quiet legal action. At the 1922 meeting, Felix said that in inflation-ridden Germany even anti-Semites “are worrying more about their daily bread than about the Jews.”51
The hyperinflation, in fact, gave an incalculable boost to anti-Semitism. The Nazis claimed that the inflation profiteers were all Jews, profiting from the common people’s misery. Ideologue Alfred Rosenberg declared that a Nazi government would expropriate banks and stock exchanges. Playing on hoary Shylock images, Bavarian engineer Gottfried Feder blamed Germany’s ill on “stock-market capitalism” and “world usury capitalism” and demanded an end to the “thralldom of interest payments.”52 The hyperinflation enshrined the Jewish banker as the most Machiavellian of Jews in the Nazi bestiary.
On February 22, 1923, the Nazi newspaper, the Völkischer Beobachter, attacked Paul, Felix, and Max. With droll humor, Max described the edition as having “a portrait of me which was not at all bad and which carried the superscription, ‘Banking Jew and Labor Leader.’ ”53 Knowing a Munich court would never defend Jewish bankers, he decided against trying a libel action.
About the same time, brother Fritz was questioned by parliamentary committees about his World War I talks with Protopopov, which now led to anti-Semitic theories of a Jewish wartime sellout.
History was being steadily rewritten, with even relatively obscure Jews suddenly cast into leading roles, their minor, fumbling actions now elevated to cunning acts of high treason. Deeds that once had redounded to the Warburgs’ glory were being systematically transmogrified into the stealthy machinations of a subtle demonic international conspiracy.
CHAPTER 17
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The Royal Couple
Aman of stern willpower, Jacob Schiff made few concessions to age in his last years. During the 1919 summer, he took eight-hour hikes at Bar Harbor, refusing to admit the least fatigue afterward. He kept up a magnificent pose of perfect health and never allowed a nurse in the house. Now and then, he grew wistful. In January 1920, he told Max that he looked forward to seeing his beloved German haunts again, but added, “I must live more in the past than the future.…”1 A month later, he attended the twenty-fifth wedding anniversary of the Friedaflix match he had so fiercely opposed. At 1109 Fifth stood a big silver-coated oak tree, embellished with silver acorns that popped open to disclose snapshots of his grandchildren.
During his last week of life, Schiff reported to the office daily. On September 22, 1920, too weak to attend Yom Kippur services, he insisted upon fasting at home. The next day, when he arrived at Sea Bright, the chauffeur extended a helpful hand, but Schiff stiffly brushed it aside and entered his house unaided. Very deaf, strict, indomitable, he concealed his illness even from senior partners at Kuhn, Loeb.
At the Sabbath’s close on September 25, Jacob Schiff, age seventy-three, died with his wife, Frieda, and Morti at his side. His obituary was the headline story in The New York Times. As he lay in state, surrounded by purple asters and abundant floral arrangements, veiled women and men in black arm bands paid their last respects. Despite his cold, exacting nature, Schiff had affected many people, and his Temple Emanu-El funeral had a cathartic power. Polish and Russian Jews paid tribute to the king of the German Jews. Hundreds, perhaps thousands, of Ostjuden tramped up Fif
th Avenue from the Lower East Side slums just to stand outside the synagogue, and Jacob’s niece would recall, “Hundreds of immigrants in those hats, trying to get in and not being able to, standing out there, silent.”2 They trailed the funeral cortege past stores closed in tribute, then passed over the Queensboro Bridge to Brooklyn’s Salem Fields where Governor Al Smith and Mayor John Hylan attended the burial.
Schiff’s death marked a watershed for the American Warburgs and “Our Crowd.” Leadership at Kuhn, Loeb passed to Schiff’s socialite son, Mortimer, marking a transition from an ambitious founding generation to far more complacent and sociable successors. Few would have predicted that Schiff’s bon vivant son-in-law would ably assume his philanthropic mantle. Felix would preside over Jewish charity with a touch as light and genial as Schiff’s had been ponderous. In fifteen years after Schiff’s death, Felix and Frieda would personally dispense thirteen million dollars, sometimes a million dollars at a shot. Frieda never quite escaped her father’s shadow. As Felix dealt with Schiff’s estate, he told his son, “the responsibility for dear Mumpy [sic] to reach a decision, when she has always been protected to such an extent, is not so easy.…”3
Schiff’s passage began a major shift in the ethos of the American Warburgs, since he had enforced the old-time religion. “Conformism more than faith compelled our family’s religious observance,” Felix’s youngest son, Edward, said.4 Nobody could match Schiff’s severe belief in the sanctity of Jewish life. But if anything, his self-righteous zealotry backfired, producing a posthumous revolt against his piety. He had made devotion seem dreadful, not joyous, and his descendants would rush to trade his Old World darkness for Jazz Age buoyancy.
Schiff left a taxable estate of thirty-five million dollars with taut strings attached, so that his rigid hand reached beyond the grave. He set up trust funds for his grandchildren that allowed them to draw income until age forty and, capital and income after that. There was a catch, however: If they married outside the faith, they forfeited their fortune. Felix defended Schiff’s decision: “He and many others have felt that intermarriage brings problems, and in our case probably the lowering of standards of pride and usefulness to those who need us most, and it is for that reason that Grandpa and I always felt so strongly on the subject.”5 This created an agonizing dilemma for Felix’s sons, who felt progressively more distant from their Jewish roots. The eldest, Freddy, would be nearly fifty before he married, while Gerald and Paul Felix entered into unhappy first marriages to Jewish wives.
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From left: Felix Warburg, Vera Wehmann, Frieda Warburg, and Chaim Weizmann at a Boston conference for the United Palestine Appeal, 1928.
(American Jewish Archives)
Felix now assumed a loftier position among the Warburgs, but it resulted from more than the inheritance. Before the war, a rough parity had existed between the American and German Warburgs in terms of wealth. Kösterberg and Woodlands were, arguably, estates of equivalent grandeur. Now German defeat and inflation had reduced the fortune of the Hamburg clan and somewhat humbled it. When Felix and Frieda traveled to Kösterberg in the 1920s, trailing heaps of luggage and teams of servants, their lives would seem inconceivably grand. With Aby locked in a sanatorium, Paul chased from Washington, and Max and Fritz plagued by zealous anti-Semites, Felix would seem the lucky brother. This suited his sunny nature just fine.
Felix was the last family grandee and enjoyed his wealth free of guilt and with a spirit of infectious fun. When his chauffeurs rocketed down Fifth Avenue on the wrong side of the street, friendly local cops just waved them through the intersections. Legions of servants and tradesmen always fluttered around Felix, keeping him well groomed and debonair. Once late for an appointment, Felix asked his barber if he could cut his hair without removing his collar. “Mr. Warburg,” the man replied, “I’ve been cutting your hair for twenty years. I could cut it with your hat on.”6 Each morning the local florist sent Felix a fresh white carnation.
Friedaflix entertained on a scale that, by today’s standards, seems absurdly extravagant. It wasn’t uncommon for them to have seventy-five people for dinner. When daughter Carola married Walter Rothschild in 1916, nine hundred people tramped through 1109 Fifth Avenue to eat and drink. Attired in a blue velvet suit with silver buttons, Edward held aloft the enormous train of his sister’s gown. Carola had huge blue eyes, a handsome, square-jawed face, and a husky voice thickened by cigarettes. She had great sex appeal and an easy way with men gained from being an attractive young woman who grew up surrounded by an adoring father and many brothers. Endowed with Felix’s grace, she was also a good listener and the trusted confidante of many Warburgs. Felix spoiled her silly. By the time she married Walter, she had twenty-two pieces of costly jewelry, including a floral brooch with sixteen diamonds and a necklace with twenty-eight rubies.7 For her wedding present, Carola got a Woodlands house, surrounded by thirty acres of real estate.
Of the five children, Carola was the only one who married just once and to a Jew. Walter was a genial man with a big, infectious grin. His father ran the A&S department store in Brooklyn. Unrelated to the banking Rothschilds, he joked that he belonged to the Brooklyn Rothschilds. Frieda had an awkward first meeting with Walter’s family in that alien borough. When she declared, “The only other time I ever was in Brooklyn was at a funeral,” the Rothschilds whooped with laughter and things improved at once.8
Much to Frieda’s horror, Felix insisted upon a constant whirl of concerts and dances at 1109. With his boyish zest, he flitted from one activity to the next, merging the roles of social director and paterfamilias. A quicksilver sort of man, always needing variety, he taught his children to dance and instructed them in tennis and other sports. Born to wealth, Felix’s descendants would be the socialite Warburgs, far more preoccupied with café society, country clubs, and the Social Register than their cousins.
Felix often bemoaned his children’s frivolity. “Old and young are trying to have a good time through their own stomachs and pockets, and do not care a hang for the rest. My own children are very nice and agreeable as children go, but not much of an exception in regard to the life they lead.”9 Regretting that they ignored Warburg traditions of public service, he tried to teach them that deep friendships aren’t formed at golf or cards, but through shared work. About Freddy, who worked at M. M. Warburg and Kuhn, Loeb after Harvard, Felix said in 1923, “if he is awake at night, it is more on account of dances than on account of initiating any new revolutionary ideas.”10 Of his third son, Paul Felix, he sighed affectionately, “… he avoids books and knowledge as a captain tries to avoid fog.”11 A deep love lay behind all the exasperation and Felix was a warm, doting father. But his letters are veined with an unmistakable sense of disappointment that his children weren’t developing more serious interests.
Felix’s sons had trouble finding their niche in the world, in part because they never needed to work. The deeper explanation lay in their contradictory upbringing. Felix tried to impart discipline while raising them in an elephantine Fifth Avenue mansion and a Westchester estate of several hundred acres. At Woodlands, he and Frieda acted like English gentry, playing polo and tennis and giving their children English-sounding names. As a businessman, Felix provided a poor role model, having used Kuhn, Loeb as a base for extracurricular activities. After Schiff’s death in 1920, Felix even wanted to resign from the firm and had to be persuaded to stay by Morti Schiff. Felix had little abiding interest in banking, but he discouraged his sons from branching out in other professional directions and this arrested them in a kind of psychological limbo.
Their education at Middlesex and Harvard converted Felix’s sons into fraternity jocks, keener on parties and sports than Jewish charity. Carola went to the Brearley School, which had only a tiny percentage of Jewish girls. Felix’s sons ran around to football games in raccoon coats given by Grandma Schiff. (When Frieda tried to withhold Paul Felix’s raccoon coat until his grades improved, Grandma Schiff indulged him instead.) Fel
ix saw no tension between the education he provided his children and the reactions he expected. The Warburg boys grew up with few Jewish friends and socialized mostly with non-Jewish girls. So even as Felix pleaded for Jewish tradition, American institutions of his own choosing subtly undid all his work.
The children were also exposed to ambivalent attitudes toward Judaism. Frieda had faith, but not her father’s deep religiosity, and Felix was more a cultural than a spiritual Jew. On Yom Kippur, Felix would fast, but stroll about in a bad temper, while Frieda abstained to appease her father’s hovering ghost. Almost without realizing it, Frieda and Felix took on the trappings of wealthy, WASP society. They talked of their sons being confirmed, not bar mitzvahed, and of their going to Sunday school, not Talmud Torah.
Curiously, in the 1920s the American Warburgs encountered more anti-Semitism than their German relatives even as they seemed to blend into an all-American milieu. The Hamburg family coped with Nazi agitators and murder plots, but this was the menace of the unseen mob. Frieda and Felix had difficulty booking certain hotels as Jews. Carola later instructed her daughter not to apply for certain debutante dances, lest she be spurned as a Jew.
