by Ron Chernow
In his reading, Siegmund had amassed two thousand quotations which he now arranged into a work tentatively entitled An Anthology for Searchers. This commonplace book—which has been erroneously described as a “secret diary”—sharply mirrors Siegmund’s mind. He was quick to spot a kindred spirit and looked for quotes that certified his own beliefs. Certain themes recur in his choices: that happiness is a by-product of hard work and duty fulfilled, that human pleasure is fleeting, that great accomplishment is always intermixed with pain. When Henry Grunfeld later contemplated publishing Siegmund’s anthology, he decided against it, fearing the quotes exhibited too bleak a view of human existence.
At Blonay, Siegmund would often invite young people for long, stimulating chats that lasted five or six hours and ran the gamut from great books to gossip. (He once defined banking as organized gossip.) By talking to people in semi-confessional style, he encouraged them to voice their own inmost thoughts. One young companion was Carey Reich, managing editor of Institutional Investor magazine. “Siegmund was the most facile and scintillating conversationalist I’d ever met in my life,” Reich recalled.7 In 1979, Siegmund agreed to a rare, extended interview with Reich on the condition that he review the transcript before publication. He spent as much time quibbling with Reich over punctuation and editing as in answering his questions in the first place.
In the interview, Siegmund sounded like an Old Testament prophet, bewailing modern societies that gorged themselves on superfluous consumer goods. He chided the sterile bureaucracies of modern business, the corporate obsession with ever-rising profits.8 Deploring Britain’s laziness, he saw a country in decline from creditor to debtor nation and he responded to Margaret Thatcher’s appeal for a more entrepreneurial spirit.
If Siegmund sounded like that Spenglerian youth of Weimar Germany, he also embodied a fading world of elegance. He was ultramodern and old hat at once. One day in the 1970s, he had a busy day in New York. To avoid running into some Wall Street people at lunch, he suggested to his companions that they eat further uptown. They stopped at a MacDonald’s in Greenwich Village where Sir Siegmund Warburg, in his seventies, tasted his first hamburger. He was fascinated that this strange brown thing on a bun had been named after his family’s hometown. After eating it, he beamed with amazement and said he was impressed by this three-dollar meal, which he thought represented excellent value.
Yet his strong sense of tradition never deserted him. In 1978, he went to Japan to receive the First Class Order of the Sacred Treasure from Prime Minister Takeo Fukuda. The honor, awarded in the prime minister’s residence, was signed by Emperor Hirohito. It pleased Siegmund greatly that he had restored the link cherished by Jacob Schiff and Uncle Max.
He softened with age—somewhat. He still had violent fits and shouted at the top of his lungs, but his anger didn’t flare so readily. He and Eva recaptured some old closeness and struck visitors as a courtly, old-fashioned couple. But Siegmund often felt alone in Switzerland, burdened by the beautiful house. To Grunfeld, he sighed, “We become the slaves of our possessions.” Increasingly detached from earthly things, he delighted in travel and felt at home in sleeping cars. As a practical man, he talked about moving into a hotel where he and Eva would each have a bedroom and share a sitting room. It was as if Siegmund were searching for some past simplicity—maybe some lost piece of his Swabian boyhood with Lucie—that he could never find again. It seemed emblematic of the Warburg saga that Sir Siegmund Warburg, the most successful of the clan, was also the saddest and most frustrated.
At moments, he betrayed a wish to erase his footprints from the sand and even expunge his name from his extraordinary creation, S. G. Warburg & Company. Trying to run the London office from Blonay, he sometimes sparred with Messrs. Grunfeld, Roll, and Seligman. Even in his late seventies, he was still so busy that Doris Wasserman set up appointments for his weekend telephone calls. He never stopped brooding about his firm or worrying about its runaway growth. At one point, he grew so upset about the way certain expenses were accounted for that he considered having the firm drop his name after his death. With his usual theatrics, he threw a mock tantrum and flung his glasses. Then he settled down and scrapped the idea when told of the legal problems involved.
In some ways, Siegmund now found his firm alien. “I think that with some of the people in charge there I would have very little chance to be hired. People would say, ‘This fellow is much too nonconformist, much too eccentric’ ”9 He was too Jewish to be hired, he said. He experienced the founder’s nightmare that his firm would become unrecognizable after his demise. To colleagues, he predicted that within five years of his death, they would join the establishment, grow larger, have glossy reports, change the Mercury Securities name to S. G. Warburg & Co., and print brochures with photos. Virtually all of the prophecies would come true, confirming Siegmund’s reputation for clairvoyance.
Siegmund didn’t face death with equanimity. He evaded funerals and hated to visit sick people, as if they might be contagious. With age his face grew gaunt, making him appear ill, and his head sank deeper into his chest. He seemed smaller and wider. Frail, with a weak heart, he didn’t like walking with a cane and camouflaged his weakness with an umbrella. But his eyes still sparkled with their old preternatural gleam from his thin, yellowish face.
—
Siegmund’s success had been spectacular but lopsided. He had established the Warburg name in Britain, but had stumbled elsewhere. It haunted him that the Warburg name might not survive in Germany and America, where the family had made such an enormous contribution. Fate allowed him no surcease from his dream of restoring Warburg honor. In Germany, he had a big deal brewing. And Becker and Paribas gave him one last chance to reverse the Wall Street verdict. It seemed that, at the last moment, he might yet sweep the board.
Then fresh complications fractured his relationship with Paribas. In September 1981, the French Socialists announced plans to nationalize the Paris-based bank. Moussa warned the new government that this move would damage Paribas’s international accords with War burgs and Becker. He brought Siegmund to Paris, hoping he would convince the French government that Paribas was a global institution and that nationalization would irreparably tarnish France’s image in world financial markets.
However sympathetic to Moussa’s travails, Siegmund soon developed his own, quite different, agenda. Taking the French Socialists’ rhetoric at face value, he believed they would engineer a far-reaching revolution, charting a middle path between capitalism and communism. As a matter of policy, Siegmund liked to stay on good terms with governments. Instead of following Moussa’s lead, he decided to court the Socialists to get fair compensation for Warburg’s Paribas stake or to have a special role in any nationalized firm. To this end, he not only met French president François Mitterand, but charmed and cultivated his receptive special assistant, Jacques Attali.
Moussa came up with a controversial plan to shield Paribas’s Swiss assets from the grasp of the French government. He planned to transfer these assets to a holding company called Pargesa. It was a perfectly legal, if politically incendiary, idea. Moussa wanted S. G. Warburg & Co. and Becker to show their solidarity and to participate in an underwriting for the expanded Pargesa. From loyalty to Moussa, Ira Wender gave him his word that he would take part. But Siegmund, eager to exploit Paribas’s weakness, shifted course and stayed aloof from the Pargesa underwriting. He applied tremendous pressure on Wender to back out, dispatching David Scholey, Eric Roll, and other high-level emissaries to convince him that it was unwise to provoke the French government. Wender didn’t budge.
In the end, Moussa never stopped admiring Siegmund, but he revolted against his constant need to rule. As he wrote in his diary at the time, “Above all, Siegmund wants to be obeyed. He wants to reign, by sweetness and persuasion, but totally.”10 Some Warburg people surmise that Moussa had always planned to gain closer control of S. G. Warburg after Siegmund’s death. The question became moot when Moussa was hounded
from his job over the Pargesa affair. By ingratiating himself with the French government, Siegmund emerged with an enhanced role in the nationalized Paribas, confirming Moussa’s suspicions.11
The repercussions of all this maneuvering were enormous at Becker. Siegmund wanted to push aside the weakened Paribas and buy out the 60 percent of Becker owned by Becker employees. Convinced of his fiduciary obligation to these employees, Wender again defied Siegmund’s wishes. In this recession year of 1982, Becker was bleeding money, reporting millions in losses.12 S. G. Warburg & Co. hadn’t instilled the same taut discipline there as in London. Seething over the Pargesa affair, Siegmund blamed his “adopted son” Wender for Becker’s failure and turned on him with a vengeance. David Scholey flew to New York to negotiate a bitter end to the relationship. Another adopted son had been sacrificed.
Time was running out for Siegmund. After S. G. Warburg and Paribas bought out the employee stake in Becker, Siegmund made a secret trip to New York in July 1982. To avoid press reports, he met with its new management at a hotel near Kennedy Airport. Siegmund was already so weak and sick that Henry Grunfeld warned him not to go. Arriving amid muggy summer weather, Siegmund let it be known that failure to attend would be tantamount to resignation. Despite his fragility, he spent six hours delivering the pep talk of his life, inspiring the troops with bold visions, chastening them with trenchant criticisms. He made one last show of unity with the French. The next day, he visited George in Connecticut, his first time at his son’s new home, and felt triumphant, like an old trooper who had pulled off one last feat.
Paribas and S. G. Warburg subsequently traded back their stakes in each other, and the Becker operation was sold to the French after Siegmund’s death. In the end, S. G. Warburg decided to create a Wall Street outpost from the ground up, which would prove to be the winning formula that had evaded Siegmund.
In his last months, Siegmund strained to bring off one last triumph in Germany. He masterminded a scheme to merge the Effectenbank-Warburg in Frankfurt with two private banks owned by Munich’s Bayerische Vereinsbank: the Bethmann Bank in Frankfurt and the Simon Bank in Düsseldorf. In September 1982, Siegmund flew to Munich to shake hands on the deal. He thought a prior agreement had been reached by which Peter Reimpell—a friend of Siegmund’s and a Bayerische Vereinsbank executive—would chair the new entity. Then the chairman of the Bayerische Vereinsbank, Dr. Hackl, told Siegmund categorically that he had heard of no such deal to release Reimpell from his duties. Flabbergasted, irate, embarrassed, Siegmund left the meeting. At Siegmund’s hotel, Grunfeld found his old ally packing his bags to return to Switzerland. Looking tired and very worried, Siegmund again bemoaned that S. G. Warburg & Co. was becoming too large and complacent.
Still fuming, Siegmund flew back to Geneva where a car met him at the airport. En route to Blonay, he had a severe stroke and by the time he reached the house, he lay unconscious in the back seat, with one arm paralyzed. (According to another version, the stroke occurred after he arrived home.) Siegmund was rushed to a general ward of a Lausanne hospital and Dr. Goldman flew out to treat him. Having failed in his grand finale, Siegmund remained feverish, determined to outwit fate. He couldn’t bear the failure, as if he still wanted to rewrite the Warburg script torn up by the Nazis. To Grunfeld’s astonishment, Siegmund called two days later from Switzerland and began talking about how to revive the aborted Bavarian deal while Grunfeld urged him to rest.
Teary-eyed, Siegmund begged Dr. Goldman to take him by ambulance plane to London and Dr. Goldman reluctantly acceded. Instead of resting, Siegmund was often angry and agitated in London. At times he babbled deliriously and offered to set up Dr. Goldman for life. Dr. Goldman couldn’t get Siegmund to stop telephoning David Scholey and issuing instructions on business. One day, Siegmund had a conversation with the office that so upset him that he had a massive stroke afterward and never spoke again.13 According to another version of events, Siegmund arrived semi-conscious at the London clinic and was unable to make telephone calls.
Several parties had been planned to celebrate Siegmund’s eightieth birthday, and at first guests were informed that Siegmund had a cold. Now the festivities were canceled outright. Three weeks after the Munich meeting, on October 18, 1982, Sir Siegmund Warburg died, a deeply unhappy man devoured by a dream.
With his usual thoroughness, leaving nothing to chance, Siegmund had written up instructions in 1980 for how to handle his death. He didn’t want a funeral service. “I believe in the old precept that it is better to give flowers to the living than wreaths to the dead,” he wrote. He wanted to donate his body for medical research. He was eager that his eyes be used for implantation, but was talked out of this by his secretary, Doris Wasserman. Instead he was cremated and a small family group attended the scattering of ashes. Though Siegmund had requested no memorial service, Grunfeld, Scholey, et al. did gather at the Guildhall a few months later to remember him.
A curious coincidence followed Siegmund’s death. In his hometown of Urach, the children at the local school were studying the Nazi period and were shaken by their new knowledge. They wanted to show that Germany didn’t simply forget injustice. So they decided to restore the neglected grave of Siegmund’s father, Georges. Since 1923 the forest had closed in around the tall forgotten gravestone and the children now cleared space around it. Eva wrote a moving letter to the headmaster, thanking him and noting Siegmund’s love for Urach and its surroundings.14
Eva felt she needed to be strong for Siegmund while he was sick. For many years, she had played her part selflessly. Those close to Eva hoped she would now blossom in her own right. Instead, though she tried to stay busy in the lonely house, her life seemed empty. The cancer she had battled for fifty years gained the upper hand. She decided to return to her doctors in London where she faced her illness with great bravery. Though she suffered from pain and severe shortness of breath, she never complained and was the strong, dignified Viking that Siegmund had loved. When her nurse said that she couldn’t recall such an uncomplaining patient, Eva—sounding very much like Lucie—said, “Then perhaps you ought to think back a little harder.”
A few days before her death, Eva told her children what a great relief and triumph it had been for her to outlive Siegmund, for she felt he would have been defenseless without her. When her youngest grandson visited, she put on makeup and got especially dressed to receive him. Despite her extreme frailty, she still had an indefinable radiance, making the shocked young man cry out, “Why, Granny, you look simply fabulous!” He was inconsolable the next morning when he learned that his grandmother had died during the night. Eva had survived Siegmund by a year.
No member of Siegmund’s family was now left in England, so that his conquest seemed a rather lonely one. He put the Warburg name back on the map, but he hadn’t revived the tight cohesion and shared purpose of the old family. He had brought forth an empire, not a dynasty. The all-important success in America and Germany had eluded him.
The story of Siegmund and the uncles demonstrated the indomitable spirit of the German Jews in the Diaspora. They had displayed the same energy that had made them so envied in Germany. They had enriched their adopted country with their drive, discipline, and zest for new ideas, carrying abroad the best of German culture even as the worst had triumphed at home.
Sir Siegmund Warburg was a very complicated human being. Almost anything you could say about him, you could also say the reverse. Of his influence upon the financial world, however, there was no doubt. After his death, the British press extravagantly praised him for reawakening the City from its slumber in the 1950s. “More than any other single person,” said The Times “he was responsible for the change in the City’s habits which made it ready to take advantage of the circumstances of the second half of the twentieth century.”15 The Financial Times said, “Sir Siegmund Warburg … was perhaps the most influential financier in the City of London in the post-war period.”16 Once again, as with the Rothschilds, a German-Jewish immigrant
had renewed London’s financial supremacy. Siegmund’s feat was singular in financial annals, for he had constructed his empire ex nihilo, within a generation, against astronomical odds. He had bequeathed to Britain a merchant bank that could compete around the world.
After Siegmund’s death, the City wondered whether his firm would decline. Instead, his hand-picked successor, Sir David Scholey, arose as London’s foremost banker, perpetuating the discipline, teamwork, and discretion instilled by Siegmund. Of his mentor’s death, he said, “I suppose, in family terms, it was like the death of a father, and in personal terms it was the loss of a second father.”17 Scholey became a member of the Court of the Bank of England and was frequently touted as a future governor. While the German Jews had mostly disappeared from S. G. Warburg—though Henry Grunfeld, in a very Siegmundian retirement, still reported to work each day—their legacy lasted. “Siegmund once said he considered me an honorary member of the Jewish community,” said Scholey. “It was one of the greatest compliments I’ve ever been paid.”18
As financial houses swelled into big, anonymous bureaucracies, Sir Siegmund’s legend took on a new luster. He became an inspiration for young bankers who preached his philosophy of relationship banking and top-flight professional service. He had shown that finance could be a rich human experience, that a banker’s life transcended budgets and balance sheets. These acolytes imitated Siegmund’s methods, repeated his aphorisms, spread his gospel of excellence. They were everywhere in world finance and they gave him his real immortality.
