by Ron Chernow
From the outset, Siegmund yearned to aid the war effort. Right after the Nazi invasion of Poland, he offered to introduce Stefan Zweig into the proper Whitehall circles so he could write propaganda leaflets to be dropped over Germany. As he told the author, “I think at the moment the Authorities would not only welcome large leaflets to be dropped by aeroplanes but also smaller leaflets which might be included in articles smuggled from Holland and Switzerland into Germany.”40 Zweig declined the invitation, saying any clever journalist could do as well.
Two months later, Siegmund made a trip to France and Switzerland that he mysteriously described to Zweig as the most interesting of his life.41 It would prove the final act of the convoluted Warburg drama with Dr. Schacht, who feared that the still limited war could widen into a worldwide catastrophe. Schacht sought out German businessman Gero von Schultz Gaevernitz, the brother-in-law of Siegmund’s close friend, Edmund Stinnes, and told him that he desperately needed to speak to President Roosevelt. He intended to ask Roosevelt to demand an end to the war while guaranteeing Germany’s 1914 borders (minus Alsace-Lorraine); there would also be a popular vote taken in Austria, under League of Nations supervision, over whether the country should remain with Germany. Still in touch with several generals of the Resistance, Schacht thought that if Hitler rebuffed Roosevelt’s offer, it would then strengthen their resolve to act. What he most needed, he said, was British support for his safe passage through Gibraltar en route to Washington. He had cooked up an idea for a lecture tour that might camouflage such an American mission.
Gero von Gaevernitz promptly went to Switzerland and sent a telegram to Siegmund, inviting him for a visit. Within a day, Siegmund wired back, “Arrive tomorrow Zurich, Hotel Neues Schloss.” Siegmund must have known something momentous was afoot. To Gaevernitz’s amazement, Siegmund arrived with a distinguished British civil servant. After hearing the account of Schacht’s proposed journey, the British civil servant said that only the prime minister or the Cabinet could approve such a sensitive mission. After the two men returned to London, Siegmund had to send Gaevernitz a one-word telegram: “No.”42 It later turned out that the British lacked the necessary trust in Schacht, who had shopped similar proposals before the war. The previous winter, Siegmund himself had warned the British that the Nazis deemed Schacht unreliable. In the current circumstances, this should have been a powerful recommendation. Instead, the British government managed to complete its perfect record of ignoring overtures from authentic members of the German Resistance. American secretary of state Cordell Hull then repeated the error in Washington.
Part Four
THE WARTIME INTERREGNUM
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Eric Warburg sailing with Countess Marion Dönhoff, later the publisher of Die Zeit. (Warburg family, Hamburg)
CHAPTER 34
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Surreal Saviors
During his new life in New York, Eric lived at first with Frieda and his cousins at 1109 Fifth Avenue and sat on endless refugee resettlement committees, including one that brought three thousand German and Austrian doctors to America. With Siegmund settled in London, it was no accident that Eric planted his flag in the other capital of Anglo-American banking. The financial world would always seem too small to encompass these two striving Warburgs. In 1938, Eric started E. M. Warburg & Co. at 52 William Street in the Kuhn, Loeb building. After the sumptuous Warburg bank in Hamburg, this new firm was a humble start-up, with minimal capital and scarcely more than some desks. To show he was still active and unbowed, Max took an office there and reported to work daily. The erstwhile emperor of Hamburg finance was now confined to a little eyrie in a Manhattan office building. Eric felt duty-bound to hire former workers from Hamburg, giving his firm the sadly forlorn flavor of a refugee enclave for transplanted employees and clients.
However modest the lives of these exiled Warburgs, they had the inestimable advantage of an illustrious name and myriad connections. Even during the war, Eric provided an office for Baron Robert de Rothschild (father of his friend Alain) who worked beneath an Oskar Kokoschka painting that Eric had salvaged from Kösterberg. He was cast in a pundit’s role by a Wall Street famished for educated guesses about German war strategy. In early April 1940, Thomas W. Lamont, senior partner of the Morgan bank, invited him to an elegant black-tie soirée and posed this after-dinner question: “Eric, you really know the Germans, what do you think will be the next move?” Through the cigar haze, Eric said that Hitler would do something unexpected. “Well, speculate!” Lamont encouraged him. Eric guessed that the Nazis would employ their U-boats to seize the Norwegian coast. A few days later, the Nazis made him a prophet. Amazed by this bull’s-eye prediction, Lamont telephoned and asked, “Well, Eric, what’s going to be the next move?”1
However traumatic, the expulsion from Hamburg provided a small measure of psychic relief for Eric. He had shown little real flair for business and always walked in the gigantic shadow of his father. Now the political scene provided scope for his latent diplomatic skills. When Stalin invaded Finland in December 1939, the Finnish ambassador in Washington appealed to Lewis Strauss, a Kuhn, Loeb partner who had once assisted Herbert Hoover. (He would chair the Atomic Energy Commission after the war.) Strauss hatched a scheme with the New Deal’s Ben Cohen to aid the Finns with money from America’s Export-Import Bank. They got Donald C. Swatland of the Cravath law firm to create a new corporate entity called the Finnish-American Trading Corporation, with offices at 52 William Street. As chief of this entity, Eric shipped everything from Ford trucks to Idaho peas to fighter planes to Finland. This war matériel had to cross a submarine-infested Baltic Sea. In the end, the aid proved futile and by March 1940 the Finns sued for an armistice.
Of German ancestry, Jimmy Warburg also considered himself an expert on European events and betrayed a deep emotional commitment to stopping Hitler. He had long been disturbed by American isolationism and Roosevelt’s appeasement policy. On a Canadian steamer during the summer of 1937, he told Senator Robert A. Taft that Hitler’s march into the Rhineland was only the prelude to an all-out campaign of European conquest. The senator brushed this aside, saying, “After all, the Versailles Treaty was unjust, and the Rhineland is a part of Germany.”2
Those who had not experienced Nazism firsthand found it hard to credit the fervent rhetoric of those who had. At New York’s Economic Club in March 1939. Jimmy debated Senator Burton K. Wheeler of Montana and lawyer John Foster Dulles. Never one to mince words, Jimmy said that the only way to avert war was for the United States to warn the Axis powers that any threats against England or France were threats against America. Wheeler scoffed at the notion that war would come or that, if it did, the United States should enter. Jimmy always thought Dulles a pompous stuffed shirt, a view amply confirmed when Dulles intoned, “Only hysteria entertains the idea that Germany, Italy or Japan contemplate war upon us.”3 Not without a touch of admiration, Dulles described the Axis powers as the “dynamic have-not nations” whose legitimate demands must be met. As soon as Germany invaded Poland that September, Jimmy believed that only American intervention could stop the Nazi juggernaut.
Frustrated with American myopia, eager to educate the public, Jimmy knew he had to heal the old breach with FDR. After the Nazis marched into Paris, Jimmy stopped by the White House and asked for a sheet of writing paper. In a personal note to Roosevelt, he explained that he had come to Washington to visit his former commanding officer, now at the State Department. “Being that near I could not resist the temptation to come across the street and do something I have long wanted to do, and that is to say to you, ‘I was wrong and I’m sorry.’ ”4 Obviously, Jimmy could have written from New York, but the spontaneous gesture added drama and underscored his sincerity. Two days later, Roosevelt replied in a gracious spirit. “Thank you for that letter of June nineteenth, so generous in tone and magnanimous in spirit. There is no statute of limitations on good will and I want you to know that I accept wholeheartedly everything you say, and
appreciate, more than I can tell you, having you say it as you did.”5
Ever since Paul’s death, Jimmy had steadily shifted the spotlight of his attention from financial issues to foreign affairs, as if slowly casting off his Wall Street background. The war in Europe helped smooth things over between him and Roosevelt, because it assigned a lower priority to domestic issues that had divided them. In June 1940, Lewis Douglas, the former budget director, invited Jimmy and other friends to a dinner to brainstorm about how America might aid England and even enter the war. This influential group eventually expanded to include John McCloy, Dean Acheson, Frank Polk, and Allen Dulles. Because it usually met at the Century Association in New York, it took the nickname the Century Group. It provided Roosevelt with the theoretical legal foundation for the deal by which the United States gave Britain fifty destroyers in exchange for the use of British bases in the Western Hemisphere.
When Jimmy endorsed Roosevelt over Wendell Wilkie in the presidential race that autumn, it marked his fleeting return to political favor in the Washington establishment—the last time that he would enjoy insider status for another twenty years. When the president invited him to the White House, Jimmy found his old mentor cheerful, if somewhat aged. As he walked in, Roosevelt kidded him about repentant sinners, but didn’t prolong the gibe. He ended up confiding to Jimmy his concern that the war was fast depleting the British Treasury.
After the election, Roosevelt made clear to the public that American exports to Britain might dry up without financial aid. Acutely aware that loans to the Allies had burdened world finance with exorbitant debts after World War I, Jimmy favored outright grants to England rather than a repeat of the earlier charade. He also thought America should begin to mobilize for war, a theme he stated in an open letter to Congress in December 1940. Unwilling to shrink from the hurly-burly of debate, Jimmy published a provocative book, Our War and Our Peace, that again sounded the theme that the United States could avoid entanglement in the European war only at its peril. He waged a vigorous campaign for congressional passage of FDR’s Lend-Lease Bill, which he defended in a radio symposium. “The more we are able to do quickly—now—the less we shall have to do in the end,” he said. The United States was “not helping enough to insure a defeat of the gangsters, but helping quite enough to put us next on the list of victims.”6
After Lend-Lease was enacted, Jimmy participated in the founding of the Fight for Freedom Committee, which endorsed American entry into the war. He raised money and placed newspaper ads for the group, which numbered Eddie Warburg among its sponsors. The committee’s běte noire was Charles Lindbergh and his isolationist America First movement. The chairman of the Fight for Freedom Committee, Bishop Hobson of Cincinnati, asked Jimmy to debate Lindbergh in Madison Square Garden before a nationwide radio audience. Some committee members feared that Jimmy, as scion of a Jewish banking dynasty, was a poor choice to joust with Lindbergh, who might scare up the old anti-Semitic hobgoblins of undue Jewish influence—a concern Jimmy shared. Bishop Hobson dismissed this as irrelevant. In the end, instead of dodging the issue, Jimmy faced it squarely: “Jew or Gentile, an American can say only this to Charles Lindbergh: ‘Your second non-stop flight has taken you to a strange destination.’ ”7 Whether Lindbergh loved or hated the Nazis didn’t really matter, Jimmy contended, for his sweeping pronouncements weakened Allied confidence and stiffened German resolve.
As had happened to his father in the first world war, Jimmy became the target of intensely xenophobic, anti-Semitic attacks as America debated entry into the war. Senator Bennett C. Clark of Missouri tried to discredit him by fanning nativist resentment. Interviewed by the Chicago Tribune, he said of the Fight for Freedom Committee, “The great radio spokesman of the group is Mr. James P. Warburg, an international banker of great repute, a man who was not even born in the United States. He was fortunate in being brought to this country from Germany in his youth.”8 In a phrase drawn from the moldy stock of anti-Semitic smears, he branded Jimmy a “huckster of other men’s blood” and said he spent the previous war working for a railroad and a Washington bank.
The senator didn’t know the anguish Jimmy had caused his father by wanting to go to war against Germany. Jimmy explained that he had gone to Newport News, Virginia, to learn to fly in the hope of being recruited into the U.S. Naval Reserve Flying Corps. He had finally risen to a lieutenant’s rank. “Is your cause so weak,” Jimmy asked the senator, “that you must resort to lies and slander in order to blacken the character of those whose arguments you cannot meet?”9 Acknowledging the senator’s mistakes, the Chicago Tribune printed a front-page correction. A few weeks later, Jimmy wrote to his friend James V. Forrestal, the under secretary of the Navy, and asked if he could return to active duty. “I’m not looking for a prestige job but for a chance to do my bit wherever I usefully can to fix ‘Uncle Adolf.’ ”10
As always in Jewish history, once the anti-Semitic demons were released they were hard to recall. Jimmy reaped a harvest of hate mail, including a letter from one Tribune reader who said that Senator Clark might repent his statements, but the reader didn’t. “You are a jew monger. A jew war maker. You have upset the whole world. Your god dates back to the golden calf.”11 This missive sounded mannerly compared to the threat from a nameless “American mother” in Skokie, Illinois, who bluntly warned Jimmy that if any of her three sons had to go to war, then “you have attended your last social affair.”12 It was, of course, horribly ironic that Jimmy, who had tried so hard to distance himself from Judaism and blend into the gentile world, was the victim of such unbridled malice. As the Warburgs had repeatedly learned, every time they tried to renounce their Jewish identity, the world was happy to remind them of it. With the outbreak of European hostilities, there was no sudden burst of generosity in America to receive German Jewish refugees and only another twenty-one thousand were admitted during the war.
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As with so many German Warburgs, Ingrid ended up staying in New York far longer than she had dreamed. After graduating from Hamburg University in 1936, Fritz’s exquisite daughter, who so resembled an Egyptian queen, made a six-week trip from Hamburg to stay with Friedaflix in New York. (Fritz gave sage parting advice: “Never drink water with ice!”13) She returned to Hamburg briefly the following summer and experienced the funereal grace of Kösterberg. As she told her friend Adam von Trott, “The beauty of Kösterberg and its people has acquired something painful during these last few years.”14 Now impoverished immigrants, the German Warburgs were suddenly thrown together with the super-rich, partygoing American Warburgs, producing many strange clashes and contrasts. Some of the German refugees found their American cousins snobbish and standoffish, wallowing in luxury. Staying at 1109 Fifth Avenue, Ingrid got to observe all the comic foibles of Friedaflix. Frieda provided Ingrid with credit at many stores, while displaying Jacob Schiff’s frugal rigidity. One day, as Ingrid stuck a stamp on a letter that was a penny too much, Frieda bristled with horror. “Darling you must never do that! What do you think, that we have become rich?”15 Felix, on the other hand, was a smiling Lord Bountiful. One Saturday morning, he tried to coax Ingrid into a playful day at Woodlands. She refused, saying she had to raise three hundred dollars for a school for refugee children. Taking out his wallet, Felix tossed three hundred dollars in crisp bills on the bed. “Sometimes, one has to do things for their sheer pleasure and not think about it too much,” he declared. “Now you can come with me.”16
When Felix received an invitation to speak in Rochester that winter of 1936–37, he suddenly thought of a wonderful stand-in: “Why not Ingrid? She’s just come from Germany.”17 Soon Ingrid was drafted to speak for the Joint and rendered firsthand accounts of Third Reich atrocities in 220 American cities. These talks had an unexpected impact upon Ingrid, who was young, passionate, and overflowing with a generous but naïve fervor. While telling of Nazi terror, she saw that American Jews inhabited a more ghettoized world than had their Hamburg counterparts before Hitler.
Visiting Frieda in Palm Beach, she noticed that Frieda’s grandchildren couldn’t get into the local country club, a form of exclusion that seemed to affect American Jews everywhere. She spoke in Jewish social clubs set up to provide an alternative to discriminatory WASP clubs. And she was dismayed by the checkbook philanthropy of newly rich Jews who donated money to certify their status then felt absolved of any need for further political action. The cross-country journeys helped to radicalize Ingrid.
With a quixotic craving for action, Ingrid dreaded being some genteel society lady, raising money in well-upholstered drawing rooms. She was the rebel spawned by every rich family. She sought to generalize the Warburg philanthropic impulse into broader political goals. At first, her political activism seemed to flow logically from her heritage, but then it acquired a strong momentum and transported her far beyond it. Like other members of persecuted groups, she envisioned a world in which religious and national divisions would be subordinated to new universal beliefs. If the Third Reich drove some Jews back to their religion, it encouraged others to fantasize about classless societies and Utopian ventures and Ingrid drifted deep into socialist causes. She could be vocal and dogmatic in expounding her views. Once she lectured her aunt a bit too loudly and Frieda put her in place: “Ingrid, I am not a hall.”18
In the late 1930s, Ingrid still hoped to return someday to a redeemed, purified Germany. As with Eric, her association with Resistance figures bolstered her faith in a post-Hitler Germany. Also important was her romantic admiration for Adam von Trott. Trott, we recall, was the former Rhodes scholar and son of a Prussian civil servant who had returned to practice law in Germany after Oxford. A handsome aristocrat and valiant crusader, Trott believed that Nazi foes should stay in Germany and fight the evil from within. Ebullient and talkative, Trott was now committed to a somber course as he tried to rise up in the German Foreign Office to strike a deadly blow against Hitler. Trusting to the common sense of the German people, he thought that the German officer corps, with its honorable, conservative traditions, would act to avert a suicidal war.
