The Warburgs

by Ron Chernow

  On November 19, 1945, Siegmund told his cousin Charles (formerly Karl), “Eric has recently been released from the American Forces and he has now discussions with his father as to the future setup in which he will work. For your personal information I am not quite without apprehensions in this respect, because I understand that Uncle Max and his son are both very much taken by the idea to revive the old M.M.W. & Co. firm which in my opinion would be most premature at this moment to say the least.”41 If the name M. M. Warburg & Co. were revived in Europe, Siegmund couldn’t use the Warburg name without creating confusion. There was now a powerful temptation to seize the name, but he had to act quickly and decisively.

  For two months, Siegmund dithered over the name change. As a veteran of the 1931 banking crisis, he was extremely reluctant to see his name on the door of a bank and suggested the name Mercury instead. For six consecutive weekends, he and Henry Grunfeld wandered around Putney Heath and Wimbledon Common, Grunfeld trying to persuade Siegmund that New Trading was a misleading name for a bank and that Siegmund’s name was the right and proper one. Siegmund feared the responsibility of such a step, as well as the sizable potential for failure. On January 14, 1946, Siegmund wrote his cousin Charles that they had just decided to baptize the firm S. G. Warburg & Co.42

  Max and Eric engaged in a long, acrimonious correspondence with Siegmund in an attempt to deter him from using the name. Deeply resentful, Max began to snigger at Siegmund’s company as the Jew Trading Company. Max and Eric felt that Siegmund had started in London with support from M. M. Warburg and Paul Kohn-Speyer and that he had now double-crossed both of them. Max jeered that the new-fangled S. G. Warburg & Company would never amount to anything. “Every one of my personal friends thought it was right,” Siegmund said of the name change. “Only some members of my more distant family thought it was wrong.”43

  On January 29, 1946, The Times of London ran a minute three-line notice on the bottom of page seven. It said in its entirety: “The name of the New Trading Company has been changed to S. G. Warburg and Company. Since its formation the firm has developed into a house of industrial and merchant bankers and it is felt that the original name is no longer appropriate. There will be no variation in the management and activities of the company.”44 The little firm had thirty employees, with total share capital of just 233,000 pounds. The announcement in no way foreshadowed its prosperous future. Siegmund was always the first to say that he never dreamed it would become a leading London house. “I thought we could find a little niche where we could do things the others wouldn’t do.”45

  Max had lived to see the Warburg name revived, but under quite different auspices from those he had expected. After Siegmund changed the name, Max suffered a heart attack in February 1946. He lingered on feebly, robbed of his old vitality and resigned to his fate. He suffered from memory lapses and found it hard to concentrate. Despite their past differences, Jimmy came to Max’s sickbed, preferring to remember the good early days when he had preferred Max to his own father. Max’s confused mind combed through the past, returning to Ballin and Melchior, the first world war and Versailles, the bright times with his three dead brothers. Flabbergasted to learn of the six million Jews who had died in the gas chambers, he insisted, one last time, that Nazism was a passing disease in Germany and that people should remember the good that had come from German culture.

  Max’s mind frequently turned to Aby. Right after the war, he cherished a vivid reminiscence of Aby, which Carl Georg Heise had written in an air-raid shelter during Berlin bombing raids. Max’s own perishable world of power and wealth now lay in ruins while Aby’s books and ideas had endured. To Eric, Max confessed that he had underestimated Aby, whose mad, nocturnal visions had been lit by such lightning flashes of truth. “He used to say: Your firm will be bankrupt at a time when my library will flourish.… How many times, when we had discussions, didn’t I tell him that he was an idiot! But after all I think he came nearest to the truth.”46 With similar humility and candor, Max told Fritz Saxl that most of his own work had been destroyed but that Aby’s library had survived as a family legacy.47

  Eric always swore his father would have returned to Hamburg whereas his sisters were equally adamant that he would never have gone back. In his last days, Max succumbed to nostalgia and talked in his delirium about the coachman readying the horses to take him back to Kösterberg. He died on December 26, 1946, at age seventy-nine. More than one thousand people jammed the funeral at the Park Avenue synagogue. Afterward, Max was reunited with Paul at the Sleepy Hollow Cemetery. His death was a tremendous blow for Alice, who had stood steadfast by her husband’s side through two world wars, an assassination plot, and years of persecution.

  By an uncanny coincidence, Paul Wirtz died two days after Max so that a joint memorial service was held for them at Brinckmann, Wirtz in Hamburg. An openly moved Rudolf Brinckmann gave a thoughtful speech of remembrance then joined the now-tiny Jewish community in Hamburg for a service at a local synagogue.

  Max’s death was exceedingly strange for Fritz, who had been overshadowed for so long by his four flamboyant brothers. “Of course, I have suddenly become much older through Max’s death,” he wrote. “So long as he ‘ruled,’ even with a weakening hand, I could still feel like the younger brother.”48 With his gray walrus mustache, Fritz still lumbered slowly through life, yet he had outlived in his plodding way his more dynamic brothers. Grumbling about high Swedish taxes, he otherwise seemed to enjoy Stockholm. He and Anna helped many Jews during the war and cared for a Finnish refugee child. In the basement of their apartment building, Fritz indulged an old passion and set up a graphology institute.

  Like Max, Fritz felt the mysterious pull of a Germany that now survived only in memory. Drinking sherry and eating herring at the Restaurant Metropol, he would reminisce about the past and suddenly find himself sliding from Swedish into a quick, colloquial German. Fritz never discounted the possibility of moving back to Hamburg after the war. He didn’t assume all Germans were Nazis and feared the victorious Allies would punish rather than rehabilitate his former countrymen.

  Once young men of such infinite verve and promise, the Warburg brothers were all humbled in the end. For all his pep and resilience, Max had lost his wealth, his standing, and his invincible dream of Jewish assimilation into German life. He was left with a handful of memories, vague hopes, and wounded pride. If still a flawed and very fallible human being, he was a weightier and deeper man than the dashing, devil-may-care young man who had yearned to be a German cavalry officer. Like his brothers, he had been rounded and humanized by suffering, if also embittered. He died without knowing whether or not he was the last Warburg to practice banking on German soil.

  ——

  Rudolf Brinckmann and Eric Warburg in a Hamburg restaurant, 1958. (Warburg family, Hamburg)

  CHAPTER 39

  ––

  Our Aryan

  At the end of World War II, Hamburg was a patchwork of bomb debris that would take years to clear. Military jeeps negotiated rubble-strewn streets. The former Gateway of Germany had sacrificed its fleet, its overseas trade, its vital links to the outer world. As food rations dwindled to one thousand calories per person per day, tuberculosis and other ailments spread. To deal with the housing shortage, people lived in cylindrical huts of corrugated metal with small doors and two windows punched out in front. Inside the neoclassical Brinckmann, Wirtz palazzo, employees struggled with a lack of heat. Pushing their desks into one large room around an old iron stove, they worked in hats and coats while messengers rubbed their hands by the stove. The grimness of the war years had not ended.

  When the Warburgs considered returning to Germany, these material deterrents paled beside the mournful psychological ones. As for all Jewish families, Germany was now a taboo place peopled by ghosts. One day, occupation authorities sent the Warburgs a Torah shrine and curtain salvaged from Theresienstadt. What Jew could move beyond such memories? The two hundred thousand Jews still in German
y were mostly displaced people, eager to depart for Palestine or elsewhere. It seemed that Hitler had won and that the Jewish community in Germany would shortly be extinct. Around the world Jews boycotted Volkswagens and other German products—much as in 1933—and wouldn’t set foot in the pariah state.

  However attenuated his Jewish identity, Eric Warburg felt these sentiments and spurned Brinckmann’s invitation to return to both Hamburg and the bank. During the war, he had emerged as a personage in his own right, which only made the readjustment to civilian life more difficult. Forgetting his own youth, Max mocked his desire for a military career, saying, “A Jewish general we’ve never had.”1 As for so many veterans, real life must have seemed anticlimactic to Eric as he returned to the tiny refugee firm he had founded at 52 William Street. Cheerful, affable, optimistic, Eric—unlike Siegmund—didn’t have the fierce entrepreneurial energy to found an empire. Although always twinkling with bright ideas, he tended to lack the follow-through and staying power to see them implemented.

  The E. M. Warburg employees were Hamburg and Amsterdam expatriates speaking a garbled mishmash of German and English. They were generally perplexed by American securities markets. Like a figure from another era, Eric strolled about Wall Street, making formal courtesy calls on banks. He advised Jewish immigrants and German businessmen interested in establishing contacts in the American market. Eric was a bright man, but more conventional in his thinking than Siegmund, who responded to innovation with enthusiasm.

  With his life disrupted, first by the Nazis, then by the war, Eric found himself an eligible, footloose bachelor in his mid-forties. After living with Frieda, he took a small apartment in a brownstone on East 52nd Street. Max and Alice wanted Eric to make the sort of match that would have been suitable in Imperial Germany, but that seemed anachronistic in postwar New York. During one of Eric’s leaves in 1945, Alice invited to tea a young lady named Dorothea Thorsch, then working for the Dutch Red Cross. She greatly admired Eric in his spanking khaki uniform and he immediately saw her as a prospective wife.

  Tall, slim, with an aristocratic manner, Dorothea came from an eminent Austrian banking family that had been on good terms with the Warburgs. Her father, Alphons Thorsch, had headed a private bank second in prestige in Vienna only to that of the Rothschilds. Dorothea had grown up in an opulent mansion with frescoed ceilings. When Eric met her, she was saddened by the recent loss of her father. To cheer her up, he invited her on a ski trip to New Hampshire with his friends Lloyd and Ellen Garrison. After the dark war years, Eric seemed like pure sunlight to her. “He was a person who was unable to hate,” she said. “He was very constructive—always seeing the positive in life.”2 With Eric’s long history as a ladies’ man, Max and Alice pressed him to wrap things up quickly. On Valentine’s Day 1946, the couple were married after an eighteen-day engagement. At first, they shared Eric’s one-bedroom apartment, with its convertible sofa and wobbly bookshelves—a steep descent from Kösterberg. As they added three children—Max, Marie, and Erica—Frieda invited them to live at Woodlands at Hunt Cottage, a Colonial frame house that dated from before the American Revolution.

  Dorothea came alive with Eric (although she had to cope with the captious Alice) but she had signed on for a stranger destiny than she knew. Eric harbored nostalgia for Hamburg, while Dorothea, as both a practical and emotional matter, never wished to see Austria or Germany again. Scenting trouble, she and her parents had left Vienna for Switzerland in February 1938. Following the Anschluss, the Nazis ransacked the Thorsch household; a haughty officer told the servants, “Please tell the lady of the house that she has very good taste.”3 Noticing empty jewel boxes, the soldiers threatened the housekeeper with a concentration camp if she didn’t disclose the whereabouts of the jewels. Under duress, the woman admitted that Dorothea’s sister, Eva, had removed them. Eva was arrested and thrown into a tiny cell with five drugged people. For three weeks, she listened to shrieking people being tortured upstairs before the Thorsch family obtained her release through bribes. When Eva’s train arrived at the Swiss border, Dorothea saw her sister seated at one window and instantly realized from her blank expression that she was permanently scarred. The Thorsch family ended up on property they owned on Canada’s west coast.

  Dorothea never liked Brinckmann, but felt guilty about an episode that occurred soon after she and Eric moved to Hunt Cottage. The stocky Brinckmann visited in an outfit that Dorothea found tasteless: knickerbockers, a yellow pullover, and suspenders. At one point, he took her aside and asked if she would like to return to Germany. “Not at all,” she said in horror. “I don’t want to go back to your country when you’re starving.”4 Dorothea thought that the canny Brinckmann interpreted this as a sign that Eric would never return to Germany. Such hints may have given free rein to forbidden fantasies that had secretly flitted through Brinckmann’s mind. Very upset by Dorothea’s remark, Eric told her afterward that she had ruined everything. It seems unlikely that Dorothea’s comment had the impact she imagined, but the episode certainly revealed Eric’s early inclination to return to Germany and, equally, Dorothea’s settled aversion to doing so.

  As an old-fashioned merchant banker, Eric didn’t want to have responsibility for a Hamburg firm while residing in New York. Germany seemed neither habitable nor profitable. When Brinckmann urged restoration of the M. M. Warburg name in 1946, Eric, hesitant to open old wounds, refused.5 That year, scattered anti-Semitic outbreaks occurred in Germany, including cemetery desecrations, as some Germans again pounced on the Jews as the authors of all their misery. Scavenging for food and shelter, ordinary Germans weren’t preoccupied by the Holocaust and didn’t particularly care to be reminded of such unpleasantness. In July 1946, forty Jews were killed in pogroms in Poland.

  As innocent beneficiary of a historical accident, Brinckmann stood in an odd position. The 1938 Aryanization had given this Turkish immigrant entrée to the German establishment. After the war, he acquired sudden prominence as the senior partner of a major private bank. The man the Warburgs once nicknamed “Our Aryan” hadn’t stolen the bank or tried to keep it unfairly and he had discharged his duty faithfully in 1945. Henceforth, he could feel he had done the right thing and indulge the tempting daydream that temporary stewardship might turn into permanent control. In future years, the Brinckmanns and the Warburgs would be quick to spy hypocrisy in each other’s position. When the bank didn’t seem profitable in the first postwar years, Brinckmann volunteered to return it. As business picked up, he changed his mind. Eric would be accused of the same thing in reverse.

  Not only did Eric’s New York business languish but he was strapped with heavy responsibility. In his will, Max had divided his estate into six equal parts—two for Eric and one apiece for his four daughters. In exchange for the extra share, Eric assumed responsibility for his sisters. Gisela and Lola were settled comfortably enough, but Anita and Renate were not and Eric worried about their financial predicament. As Siegmund noted after a 1947 trip to New York, “I find Eric rather aged and one has the feeling that he is rather worried about lots of things.”6

  After the armistice, nobody suspected that Germany would rise again from the ashes or that an economic miracle would shortly revitalize German business. In 1946, Brinckmann, Wirtz posted a small loss but then began to boom. Private cars once again sprouted in Hamburg alongside military jeeps. It must have incensed Eric that while E. M. Warburg & Co. had a payroll with a dozen employees, Brinckmann, Wirtz—the ancestral Warburg bank—had well over a hundred. And a spirit of restitution, spiritual no less than financial, was suddenly in the air. In 1947, the Hamburg Senate renamed a street in the family’s old lakeside neighborhood Warburgstrasse. Eric’s return trips to Hamburg lengthened. By 1947 local firms prepared to resume import-export business forbidden by the Trading with the Enemy Act. In April, an advisory council in the British zone drafted a bill for restitution to Jewish victims of the Nazis. Hounded out in the 1930s, Jewish businessmen began to return to Germany to negotiate
the restoration of shares in their old firms.

  After the 1946 flaps over Brandeis, Goldschmidt and the christening of S. G. Warburg & Co., one might have thought Eric and Siegmund would drift apart, but they were bound by common family problems. They had to collaborate to recover Warburg money invested in tea and rubber plantations in the Dutch East Indies. These Dutch colonial interests had become “enemy property” after Germany invaded Holland, and it took the Warburgs years to retrieve their money from the Indonesian government.7 Eric and Siegmund were like quarreling convicts in an old prison melodrama, who find themselves chained together at the ankles after their escape. On a psychological level, each had something the other wanted. Eric admired Siegmund’s dark, magnetic intelligence, his daring and decision. Siegmund must have envied Eric his light, spontaneous charm and social ease, not to mention his comfortable childhood. Fate had lashed them together in an intricate love-hate relationship.