The Warburgs

by Ron Chernow

  In the end, George refused to bow to Siegmund’s will. By announcing his engagement right after Lucie’s death he wounded his father. In 1956 George married Ellie in a simple, nondenominational service outside the summer home of Ellie’s parents in Newport, Rhode Island. Siegmund, Eva, and Anna attended. At Eva’s suggestion, they invited the nanny who had taken care of George in Boston nearly thirty years before and she brought along her policeman husband. Siegmund and Eva were delighted to see this woman again and were struck by how the intervening decade had been so tranquil for her, so turbulent for them.

  At the office, Siegmund gave George many chances and wanted his son to succeed, but George’s heart wasn’t in the business. He didn’t always function as a smoothly oiled machine. At one S. G. Warburg-Kuhn, Loeb summit meeting in the early 1960s, George was put in charge of arrangements. He was supposed to see to it that the tables were set up in faultless S. G. Warburg style—every pencil sharpened, every pad aligned. Instead, he didn’t show up and went with Ellie to a concert. When the participants arrived, nothing was ready—a huge embarrassment to Siegmund, who muffled his anger. Then John Schiff innocently asked where George was and Siegmund erupted in a tantrum so intense that he actually foamed at the mouth. An embarrassing moment ensued before a quick-witted Kuhn, Loeb partner suggested that they adjourn to caucus. Siegmund disappeared into an adjoining room with Henry Grunfeld, who tried to calm him down.11 Siegmund never said anything to his son and nobody else ever dared to mention it to George.

  Siegmund would have been upset by the insinuation that he was an autocratic parent and professed astonishment at the notion that his son might legitimately have a psychological complex about having a strong father. He simply thought he knew what was best for his children and acted accordingly. But such a powerhouse of a man—such a freight train of energy—would have overwhelmed any son. In 1963, George left S. G. Warburg & Co. to set up his own financial-advisory firm called Wainside. The day he left, he said a great weight had been lifted from his shoulders. Siegmund thought George’s departure a terrible mistake and interpreted it as an unforgivable act of disloyalty.

  The departure dashed Siegmund’s hopes for establishing a new Warburg dynasty in London. He tried to be philosophic about it. Echoing the speech Uncle Max had made at the May 1938 Aryanization, he said the firm was a living entity that transcended its current occupants, and that S. G. Warburg & Co. was his child as much as any human child.12 It was a terrible irony that Siegmund, who cared so deeply about family honor and waged such a lengthy crusade to revivify the Warburg name, had nobody to inherit the firm. By universal agreement, he had failed as a father. For all his extraordinary intelligence, he was never introspective or privy to the secret workings of his own mind and always suffered from some fateful shortage of self-knowledge. Because he didn’t fully understand himself and hadn’t known a normal family life as a child, he didn’t know how to act when things went awry. He dwelled only on how others had disappointed him, never the reverse.

  After George left, Siegmund made random efforts to recruit other Warburgs into the firm to perpetrate the name. On one Paris visit, he invited Eddy Lachman—a grandson of Aby S., who had spent the war in Holland with his mother, Olga—to lunch at an elegant Parisian hotel. Already, on a previous visit, Siegmund had suggested to Eddy that he change his name to Warburg. Now Siegmund carried his plan a step further. “During lunch Siegmund asked me why I wouldn’t join him at the bank. I immediately shot back that I was a journalist and not a banker. ‘Oh,’ he answered, ‘that you can learn in six months.’ I was a bit aghast. Then I thought how unkind such a proposition was towards my cousin George, with whom I had played.” Eddy remembered the unhappy experience of relatives who had worked for Siegmund and was grateful when Eva rescued him. “Eva, sensing my embarrassment, remarked that nepotism in business never worked.”13

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  Perhaps it was his disappointment with people that made Siegmund so passionate about books. Entranced by them from boyhood, he got an unadulterated joy from reading that he didn’t get from business. As Eva noted, “If Siegmund is engrossed in a book, you could put him in a chair in Piccadilly Circus and he wouldn’t lift his head from the page.”14 At the dentist, Siegmund would take his novocaine injection, then sit in the chair reading Plato, oblivious of everything else. Like a perennial graduate student, he read, absorbed, annotated, and internalized books. An amazingly speedy reader, he could put away six books in a weekend. On trips, he always lugged in his suitcase a huge edition of Burton E. Stevenson’s The Home Book of Quotations.

  Reading in several languages, he went through Stendhal, Tolstoy, Shakespeare, Goethe, and Trollope. How many London bankers read Greek and Latin classics for pleasure? How many had waded through Thomas Mann’s Doctor Faustus three times? How many could recite by heart the last page of Tonio Kröger? He once said, “The four most important things to me are first, human beings; second, books; third, the sun; and fourth, music.”15 In London, he seldom had the third and despite his fondness for Bach, Mozart, Beethoven, Schumann, and Handel and frequent trips to the Glyndebourne Opera, his musical appreciation trailed behind his love of books. Even Siegmund conceded his love of books sometimes surpassed his interest in people; “And I find it even sometimes more interesting to meet other people in books than in person.”16

  Every Monday morning, Siegmund would arrive with three or four book reviews marked off from the Sunday paper. His three secretaries would promptly purchase the books and assemble pertinent reviews up front. His motto from Samuel Butler was then stamped in each book: “Progress in Thinking is Progress Toward Simplicity.” Siegmund would note important passages and mark their page numbers in pencil up front. He always carried, in a soft leather case hand-sewn by Eva, a rubber eraser for corrections. The vast majority of his books dealt with history, biography, philosophy, or literature, with only a smattering of books on economics—an odd omission for a legendary financier. He preferred to read about totalitarianism or sexual motivation than about corporate bonds. If one read all of George Bernard Shaw, he sometimes said, that would be an education in itself.

  In the end, Siegmund accumulated about four thousand closely read books. It was a very Jewish love of books. No less than Uncle Aby, Siegmund took pride in his library and was annoyed if someone rearranged it. But though an ardent bibliophile, he only went once to the Warburg Institute and declined offers to serve on the board, probably from fear that he would be pumped for money. His careful distancing from the Institute also stemmed from its association with Eric and the Mittelweg Warburgs.

  Siegmund enjoyed conversing about books. The top corporate people, he said, preferred literary talk to dull chatter about debentures. Very often, after a meeting, a surprised client would receive a hand-delivered parcel of books that Siegmund had mentioned. To judge their interests or test their intellectual subtlety, he asked young job seekers in interviews what they had read lately. A learned discourse about Thomas Mann or August Strindberg could more easily land a job than sound economic reflections. When a young prospective recruit named Martin Gordon told Siegmund he was studying classical languages and literature at Oxford, Siegmund exclaimed, “I’m so glad you are not studying economics!”17 Some cynics thought Siegmund’s book talk a magnificent cover, a sure-fire sales pitch designed to lure clients seeking that coveted touch of “class.” If so, it was a masterful strategy, for it allowed Siegmund to create a seamless unity between his banking career and his all-consuming hobby.

  Siegmund read purposefully, culling epigrams that appealed to him and could be used in conversation. Starting in the 1930s, he had secretaries type out memorable extracts and added aphorisms of his own coinage to the pile. Eventually he accumulated more than two thousand quotations. Stuffed into a drawer, they would form part of a commonplace book that would occupy Siegmund in his last years.

  How could a man of infinite appointments have time for this stupendous personal culture? The answer is that Siegmund never w
asted a second. In stores, he would point his umbrella at clothes and say, “I’ll take three of those.” When he bought glasses, the optometrist would bring frames to his office. Siegmund would try them on and not even bother to look at himself in the mirror. Though he helped to introduce commercial television in Britain, he scarcely ever watched it and didn’t listen to radio or attend movies. He never traveled without a book; if he had a few minutes to spare in a taxi or airport, he would open a book and read.

  In general, Siegmund skipped the small and large social niceties of life, although he liked a cozy evening at home playing bridge or gin rummy. Unless absolutely required, he didn’t attend cocktail parties or International Monetary Fund meetings and never joined the gentlemen’s clubs that form the backdrop of London business. He declined invitations to most weddings, bar mitzvahs, and other such celebrations. He had no small talk. If he sat next to a bright, gorgeous woman at a dinner, he would chat delightedly all evening; but if seated next to an attractive vacant woman, he would stare into space. As a rule, he attended no dinner party with more than ten people, convinced it would lack serious talk. When Harold Wilson invited him to dine at 10 Downing Street, he asked, before accepting, how many people would attend. As he once grumbled, “these big parties, where there are 100 people, this is modern barbarism.”18

  Siegmund reflected a cult of simplicity common among the intellectual heroes of his boyhood. He mocked the money-mad crowd. “If orange juice were as expensive as champagne,” he said, “people would serve it at elaborate parties.”19 For this banker, greed was the most shameful sin. He complained that many financial people had an “erotic relationship to money” and cited André Meyer as a prime offender.20 Siegmund likened such mercenary tendencies to necrophilia.21 A monkish side of him hated all material striving. In 1949, he visited Paul Ziegler at his monastery. Originally Jewish, Ziegler was an old friend who had converted to Catholicism and become a Benedictine monk and Siegmund came away highly impressed by his regulated life.22

  Siegmund’s head seemed too large for his body, and the symbolism was appropriate, since he was an entirely cerebral person. He was so unmechanical that Eva filled his fountain pens. This discomfort with the physical universe probably contributed to his withering, merciless views on sports. In his hatred of skiing he was nearly pathological. People went skiing, he said, to overcome inferiority complexes, but it made them instead moral cowards by consuming their courage on the slopes. At dinner parties, to general merriment, Siegmund delighted in mimicking the frenzied faces of skiers careering down the slopes. More than one S. G. Warburg person who broke a leg skiing invented a story about having been in a traffic accident.

  This contempt for sports may also have stemmed from Siegmund’s own physical shortcomings. He suffered from a curvature of the spine that degenerated into a slight but noticeable humpback. (In later years, a doctor thought Siegmund had a shadow on his lung because the hump so distorted an X-ray.) Because of this deformity, Siegmund walked with a stoop. When fitted for suits, he straightened up and they never perfectly fit him. Self-conscious about the hump, he seldom removed his jacket; many people who knew Siegmund for decades never saw him in shirtsleeves. Both psychologically and sartorially, Siegmund was a tightly buttoned-up person. To be sporty, he donned a beret but that was absolutely the extent of his liberties.

  Siegmund’s preoccupation with clothing of conservative taste was partly professional. He thought a banker should present just the right image, which meant approved shades of black, blue, and gray. Any shade of green or brown struck him as a shocking lapse of taste, although he occasionally made grudging exceptions. When Robin Jessel began working for him, Siegmund summoned him one day. “Robin, I see you have on a brown suit. But I see you are wearing black shoes. Harry Lucas always said that it was okay in the City if you had on a brown suit if you also wore black shoes.”23 At Kuhn, Loeb, he once called in a young executive to tell him that his suit wasn’t right, that it was getting shiny, and that he might consider purchasing another.

  Siegmund had an unerring eye for telltale details and was fascinated by the character clues hidden in neckties. Never a believer in fashion statements, he said, “If you notice the tie a man’s wearing, it’s too loud.”24 He learned more about clients from their clothing than their balance sheets. One day in the 1960s, he brought some German and American executives together to discuss a deal he had been pondering for some time. In the middle of lunch, Siegmund’s mood changed and he suddenly, inexplicably, cooled off on the deal. At a later postmortem, his puzzled staff asked what had gone wrong. Apparently, the American chief executive had hiked up the sleeve of his suit, disclosing shirt cuffs with monogrammed initials. With gleeful derision, Siegmund asked, “Did you see the man’s cuffs?” He thought it an appalling example of nouveau-riche vanity that forever altered his opinion of the man. Doing deals with the man was now infra dig.

  In his relations with people, Siegmund would “read” them and track their development, as if they were interesting characters in a novel. If he wanted to hire somebody, he would pursue them relentlessly for years. He had an uncanny ability to blend people from fancy and mundane backgrounds. At a time when the City hired young Tories with public school and Oxbridge backgrounds, Siegmund opted for offbeat characters. He hired a young Reuters correspondent named Ian Fraser who decided to leave the press agency and enter merchant banking when his advancement was blocked. Despite his total ignorance of banking, Siegmund hired him because of his fluency in German and knowledge of Germany. When he offered to hire a Canadian diplomat named Tony Griffin, the latter demurred, explaining that he had no banking experience and was a poor mathematician. “My dear friend,” Siegmund replied, “I want you precisely for the fact that you’re a diplomat and not a mathematician.”25 He would hire people for his own distinctively quirky reasons. When a young solicitor named Bernard Kelly showed him a list of his legal accomplishments, Siegmund seemed surprisingly impressed. Kelly protested that the deeds listed were routine things, like wills and estates. Siegmund smiled and said, “Yes, but I like that you made up the list.”26

  As a lifelong student of human nature, Siegmund was often attracted to people who were rebellious, even controversial. In the 1950s, he hired a man named Christopher Burney, a British spy captured in France during the war who had been imprisoned in Buchenwald for over a year. After the war, Burney wrote a book about his experiences called The Dungeon Democracy that outraged the Jewish community. Although he condemned German barbarism, he didn’t glorify the Jewish inmates either and showed how badly they had behaved under inhuman conditions: “They were annoying in the extreme by their obsequiousness, even to the S.S., and even among themselves they behaved more like animals than men, fighting and even robbing the dead and dying of their clothing.”27 Some reviewers found the book tasteless, while others saw it as remarkably brave and candid.

  Something about Burney piqued Siegmund’s curiosity. A born contrarian, Siegmund was often drawn to people who took unpopular stands. “Siegmund took Burney in as a trainee in the 1950s,” recalled John Libby of Kuhn, Loeb. “One day Siegmund said to him, ‘I don’t think you’re happy here’ and suggested a walking tour for 30 days.”28 Siegmund made him a manager in the British and French Bank and when that didn’t work out, got him another job. Siegmund didn’t prolong the world war. In the 1950s, he hired as a trainee the son of the former head of I. G. Farben, the industrial conglomerate that, among other things, had manufactured gas for the camps.

  Siegmund knew thousands of people, yet the inner man remained veiled. As Lord Roll noted, “This created a certain aura of mystery round him and led to his becoming a near-legend in his lifetime.”29 Although Siegmund and Henry Grunfeld worked together for forty-seven years, they never posed together for a picture. Photos never graced S. G. Warburg reports or brochures, which were printed on plain paper. No firm was more reticent. Siegmund liked to quote his Kaulla grandfather on the three degrees of secrecy. In the first, a man swear
s to keep something secret, but tells his wife. In the second, he doesn’t tell his wife. In the third stage, he doesn’t remember the secret himself three years later. Siegmund inhabited the third stage.30

  Like many people who stayed clear of the newspapers, Siegmund created a mystique by omission. He only gave a few interviews during his lifetime and then only on the proviso that he meticulously edit and “correct” them before publication. He never submitted to spontaneous self-exposure and maintained complete control over his public image. When he granted an interview to the Sunday Telegraph in 1970, it was such a novelty that the paper trumpeted, “Sir Siegmund Warburg speaks.”31 He enjoyed his reputation as a man of infinite contacts, a canny sphinx, a confidant of industrial titans.

  Siegmund condemned psychoanalysis as symptomatic of personal weakness and was puzzled why somebody as smart as Jimmy Warburg took it seriously. Yet Freudian theory permeated his thinking—for instance, his belief that gossip compensated for sexual inadequacy—and he had his own ersatz therapy.32 With a powerful strain of hypochondria, Siegmund often stopped at the doctor on his way to work and constantly fretted about his health. He always had a ruling doctor or guru. One Warburg director suggested that he try a distinguished London physician named Dr. Carl Heinz Goldman, a German-Jewish refugee who started a one-man practice after the war. When Siegmund entered his office, he addressed the doctor in Latin and was startled when he replied in perfect Latin. It was like a homecoming, the first exchange establishing that they had the same classical Gymnasium education in Germany. This forged a strong bond between them. Sometimes, however, Siegmund spoke in a Swabian dialect that even Dr. Goldman couldn’t understand.