The Warburgs

by Ron Chernow

  In April, Glick stopped in London for a confidential briefing with Max and other German Jews, then proceeded to the Esplanade Hotel in Berlin. He met with U.S. Consul General George S. Messersmith, who telephoned Himmler to arrange an interview. A few days later, Glick and Messersmith’s assistant, Raymond H. Geist, entered Gestapo headquarters at No. 8 Prinz Albrechtstrasse, passing beneath a sign that said, “Entry Here Forbidden to Jews.”41

  Geist assured Himmler that nobody knew of Glick’s visit. Their purpose, they explained, was to help Jews leave Germany. At this point, the Nazis preferred expulsion to extermination, and even found some common ground with Zionists who admonished Jews to flee to Palestine. Himmler summoned his chief lieutenant, Reinhard Heydrich, who escorted the visitors to see one of the more bizarre specimens lodged in the Gestapo bureaucracy. Dr. Karl Haselbacher was the top man for Jewish Questions. With curious, clerklike precision, Haselbacher kept a meticulous card file with the names, addresses, occupations, and activities of thousands of German Jews. Without further ado, he gave Glick his phone number and a list of leading Jews in large cities. It was an implausible scene—the Gestapo furnishing a complete mailing list to expedite the escape of German Jews! To their astonishment, Glick and Geist flew easily through the interviews.

  Later, Glick marveled that William Shirer and other seasoned journalists in Berlin never got wind of his existence. Max monitored his activities and sent such positive reports to Felix that the Joint renewed his contract for a second year. Returning to Germany in 1937, however, he was harassed by Gestapo officers. This secret Jewish emissary then secured a letter that he could flash to Secret Police anywhere in Germany, indicating that he had official support. Glick’s mission lasted until mid-1938.

  At this point, Himmler and Heydrich had less quarrel with the Zionists than with the patriotic, acculturated Jews who pleaded with people to stay.42 If Max Warburg showed folly in urging Jews to dig in their heels, he also showed tremendous courage by bucking official policy. The Gestapo actually forbade Jews from making any public references about staying in Germany. In speeches, Max always professed to favor emigration. In private, he exhorted Jews to stay.

  This contradictory situation was highlighted at an unforgettable speech Max gave to a joint meeting of the B’nai B’rith lodges in Hamburg in 1936. The Gestapo eavesdropped on such Jewish gatherings and reviewed speakers’ notes in advance. While a Gestapo observer listened intently, Max approvingly surveyed the immigration prospects in different countries. As people milled about in the social hour afterward, Max noticed that his Nazi auditor had left. He then committed an act of exceptional courage as recounted by historian Hans Liebeschütz:

  “Max Warburg called the members back for a final word which proved to be a complete retraction of his speech. He emphasized his belief that German Jewry would survive the storm, if they remained in the country. The majority of the assembly was probably more astonished than persuaded, but everybody must have been deeply impressed by the speaker’s courage. An uncautious word by one of the hundred or more men present could bring the heretic statement to the knowledge of the men in power.”43 By risking his life and laying himself at the mercy of the audience, Max not only exhibited great courage, but exemplary trust in the Hamburg Jewish community.

  For many German Jews, the Warburgs were heroes who eased their way out of Germany by providing money, training, or foreign currency at advantageous rates. Others, however, would feel bitter toward Max Warburg as a man who, by urging them to stay, had played god with their lives. That Max made strong, emotional appeals for people to stay is certain. Whether people were actually swayed is more difficult to say. For instance, in 1936, Hans Liebeschütz’s wife, Rahel, consulted a lawyer named Dr. Fritz Fenthol about emigration. When Max learned of this visit, he invited Rahel to Kösterberg and bluntly warned that she couldn’t use his services for emigration. As she recalled this emotional episode, “ ‘You know that I am the God of the Jews,’ as [Max] described his immense prestige in the community with this inappropriate expression, ’but I can’t fulfill my duties for the Jews if you run away from me.”44 On a more conciliatory note, Max ended by saying he might be able to convert Rahel’s money at a rate superior to the official one. When she then sent a friend to the Warburg bank, he asked to speak with Dr. Rudolf Brinckmann, the office manager. Instead the friend was shepherded to Max’s office where, Rahel assumed, he got the same speech she had heard.

  The story of Max Warburg shows the extent to which the German Jewish psyche was damaged by the Nazi terror. This ebullient, self-confident man, who had so long felt invincible, fell prey to inner fears and insecurities. In April 1936, he made a sadly revealing speech to the Aid Society in which he told how Jews were conservative and clung to their soil. He noted that, for sentimental reasons, some departing Jews packed tiny bags of German soil in their suitcases. He told prospective emigrants that in their newly adopted countries, they should steer clear of politics; scatter themselves evenly through the provinces; and not congregate noticeably in big cities. “The more quietly the Jewish immigrant lives in his new homeland, the easier it will be for him to establish a foundation for himself.”45 It was a weary prescription for eternal, second-class citizenship.

  —

  As host to the Olympic Games in August 1936, the Germans wanted to spotlight for Berlin tourists the serene prosperity of the new Germany, and so the Jews experienced some temporary relief. Demonstrations ceased and the more obnoxious placards, such as “No admittance to Jews and dogs,” were taken down.46 But, as Felix warned a correspondent, the surface calm was deceptive and “underneath there is cruelty and humiliation everywhere.”47

  In his unremitting efforts to get Max to leave, Felix kept suggesting travel and urged him to accept a long-standing invitation from his old friend Korekiyo Takahashi to visit Japan. After the Russo-Japanese War, Takahashi had served as prime minister and finance minister. In 1936, Max and Alice finally accepted Takahashi’s invitation. They had never seen Japan and it seemed an appropriate moment for a rest. On the eve of the trip came news that the eighty-year-old Takahashi had been murdered by military fanatics. For Malice, it was as if no true exit existed from their nightmare.

  The Warburgs constantly grappled with the paradox of being mercilessly pummeled in the press yet spared in the flesh. They were at once the most and least privileged of German Jews. To celebrate the annual Nuremberg rally in 1936, the Stürmer devoted almost an entire issue to The Protocols of the Elders of Zion. Max’s photo was juxtaposed with that of Karl Marx and the Nazis blamed the Warburgs for both capitalism and communism. All of Europe was swamped with this nonsense. In November 1936, the official organ of the Italian Fascist party, Fascista Regime, claimed that Felix Warburg and Kuhn, Loeb had bankrolled Lenin, Trotsky, and the entire Bolshevik Revolution.48

  And what punishment did the Nazis mete out to these malefactors? Despite the grim backdrop, M. M. Warburg turned a profit in 1936. Nobody was more amazed than Siegmund who traveled freely (if perilously) in and out of Germany before he had a “J” for “Jew” stamped in his passport. As late as July 23, 1936, he told Felix, “M.M.W. & Co. are still remarkably untouched by the Nazi situation and the business is doing very well.”49 With Felix at least, Siegmund tended to be full of praise for Max. “Under these circumstances,” he said, “it is particularly admirable how Uncle Max keeps his balance and even his sense of humour.”50

  What sort of business could a Jewish bank do in 1936? After the Nuremberg Laws, the bank employed eight attorneys to guide Jewish businesses through the labyrinth of racial laws, as they transferred money or sold businesses. M. M. Warburg booked fees for managing the Paltreu accounts, which also provided the firm with low-interest deposits.51 The bank also remained a member of the prestigious loan consortia for Hamburg and Reich debt. Most remarkably of all, it quietly performed business for elite firms of German industry. In 1936, for instance, the bank still disbursed interest payments to bondholders for Friedrich
Krupp A. G. of Essen. At the same time, Max was forced off the board of North Sea Fisheries, which he had helped to found, and the company rechristened two boats that had been named the Carl Melchior and the Max Warburg. One must understand this peculiar, surreal, and maddeningly illogical reality to appreciate the extreme perplexity felt by the Warburgs in trying to figure out their future.

  In his memoirs, Max shied away from the fact that his bank remained profitable in 1936. He preferred to dwell on the monotony and ostracism. Some of this reticence doubtless came from embarrassment at having done business with firms, such as Krupp, that later profited from the war effort, or from guilt at having earned money while other Jews faced terror. But Max’s suffering was real enough and only seemed slight in the light of later heinous crimes. As he wrote, “In Hamburg conditions were not quite as vile as in some other territories. Yet Jewish life was unendurable. Especially dreadful was the knowledge that again and again both Jews and non-Jews disappeared forever in prisons and concentration camps. One knew they were tortured even to death and one was powerless to give them any aid. No one who has not experienced it can even imagine the National Socialist terror. Horror and despair overwhelmed us. I was convinced now that all was lost. But I could not yet bear to admit it to myself, my family, or my employees. In the increasing agony of my spirit what sustained me was the feeling that I must do my duty toward my fellow Jews by helping them to a dignified mode of emigration.”52 Max omitted mentioning his efforts to get Jews to stay.

  Helping the Warburgs and other wealthy Jewish families to endure the Third Reich was the fact that they often had supportive employees and domestic help, who served as a buffer against the surrounding hate. The Warburgs were exceedingly lucky in this regard. For nearly ten years, Eric’s Kösterberg house had been tended by a young woman named Minna Wethling. Then the Nuremberg Laws made it illegal for Jews to employ as domestics gentile German women under forty-five. Regretfully Eric let Minna go and hired an Austrian named Kathi Schwärz who came from Hitler’s birthplace, Braunau. A staunch anti-Nazi, she had gone to school with the Führer, who was called “Crazy Adolf” by his chums. When she went to register in Blankenese, she said “Guten Morgen” to the officials who reprimanded her for not greeting them with “Heil Hitler.” They made her wait half an hour. When they asked where she was born, she then berated them for not recognizing the name of the Führer’s birthplace.

  A brave, kindly woman, Kathi entered into a weird marriage of convenience. After the 1934 “Night of the Long Knives” came a crackdown on homosexuality, which had been rampant in the SA. To protect him from a concentration camp, Kathi married a homosexual who briefly worked as the Warburgs’ butler. Kathi had faint contempt for the man and his sporadic alcoholic binges, but stood by him.

  Eric would joke that in those cheerless days he had three strikes against him, any one of which could have landed him in a concentration camp: one, he was Jewish; two, his housekeeper was anti-Nazi; and three, his big black Newfoundland dog, Teddy, didn’t like uniforms and tended to snap at people who wore them.53

  CHAPTER 31

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  Partition

  Now in his sixties and semiretired, Felix, with his speckled gray mustache, looked like a courtly European aristocrat. He wore pince-nez set in a tortoiseshell frame that dangled from a ribbon. He had heart trouble, diabetes, and arthritis so severe that he couldn’t grasp his squash racket and had to abandon the game. Despite his maladies, he never lost his spruce, natty appearance or quick smile. When he went yachting aboard the Carol, he was as dandified as ever in crisp blazer with pocket handkerchief and white flannel pants.

  As he survived one Kuhn, Loeb partner after another, Felix found himself, much to his surprise, the grand old man of the firm. “I was never born to be a banker,” he confessed. “I buried nine partners and now end up as the sole survivor of this big firm, with nothing but young people about me.”1 He pulled off his one big deal. He was friends with the musician Leopold Godowsky who, along with his brother-in-law Leopold Mannes, had invented a practical technique for color photography. Kuhn, Loeb negotiated on their behalf with Eastman Kodak, which bought the process and introduced it as “Kodachrome.”

  The growing threat in Germany often dimmed even Felix’s sunny nature. The world’s troubles seemed to flow across his desk as he was deluged by letters from German Jews, many of them strangers, pleading for money and affidavits. These heartrending letters forced him to exercise godlike powers. In general, he resolved this excruciating dilemma by providing help if he had some link to the supplicant. If not, he referred the person to relief agencies.

  Though situated in New York, Felix was featured in the Nazi bestiary of Jewish financial demons. The Stürmer, having fully acquainted its readers with Max, now added Felix to the roster. It published a photo of him with New York governor Herbert Lehman and the Joint’s Paul Baerwald above the caption, “Chief Jewish agitators against Germany at a conference in New York.”2 The photo was a fabrication. Felix spurned invitations to meet German officials in New York, lest he seem to condone Nazi policy. At the same time, when Wilhelm Furtwängler, the conductor and German chauvinist, visited New York, Felix defended his right to play, saying he was being made a scapegoat by Jewish protesters. Germany preoccupied Felix. He felt bereft of his birthright and spoke movingly of the desecrated beauties of his German youth.

  Now honorary chairman of the Joint, Felix had the satisfaction of heading the foreign group with the most extensive program inside Germany. In 1936, it covered school costs for sixty thousand Jewish children banned from state schools, subsidized thousands of Jewish shopkeepers, trained and transported youth to Palestine, and retrained older people. Quite unlike Max, Felix preached that the terrors of exile paled beside the extreme danger of lingering in Germany. He especially feared that the elderly would “have to go into their graves without even having the assurance that these very graves will remain unmolested by hoodlums in their blind rage.”3

  As Jews mobbed American consular offices in Germany, the State Department assigned extra personnel to handle the throngs. Felix and Governor Herbert Lehman repeatedly pressed FDR to issue more visas. In November 1935, they petitioned him to boost the number of German Jews admitted annually from twenty-five hundred to a still modest five thousand. This still fell far short of the twenty-six thousand who could be legally and theoretically admitted each year. As the governor told FDR, “Mr. Warburg and those associated with him in caring for the unfortunate refugees are very desirous of having the very stringent regulation with regard to the immigration quota from Germany liberalized to some extent by the State Department.”4 Lehman sent the president a long, despairing letter about the situation in Germany that James G. McDonald had written to Felix. But the president didn’t care to take such a controversial public stand, and Felix grew despondent as vague promises turned into windy rhetoric. To its everlasting shame, the United States would accept only 157,000 German Jews from 1933 to 1942—about the same number of Jews admitted in the single year of 1906.5

  ——

  An ailing Felix Warburg attends a dinner for conductor Walter Damrosch, January 1937. (Wide World)

  When convenient, the president would invoke the Warburgs to mask his own cowardice in confronting the nativists and isolationists. In January 1936, Rabbi Stephen Wise, after visiting the White House, told Einstein, “Unfortunately, and I tell it to you with sorrow … his [FDR’s] first word was ‘Max Warburg wrote to me lately that things were so bad in Germany … there was nothing that could be done.’ ” Wise continued, “You see how this bears out our theory that Max Warburg and his kind do not really desire to help. This is doing exactly what the Nazi government would wish him to do.”6 Wise always loathed Park Avenue, non-Zionist Jews and often denounced the dictatorship of 52 William Street (Kuhn, Loeb headquarters) and its “satellite oligarchy,” the American Jewish Committee.7 His charge seems heavily colored by ideology. The Roosevelt Library at Hyde Park can locate no s
uch letter from Max.8 Why didn’t Roosevelt mention to Wise instead the November plea from Felix and Lehman?

  The plight of the German Jews aggravated tensions between Zionists and non-Zionists. Afraid of another Diaspora, Zionists saw Palestine as the sole legitimate destination for Jews escaping from Germany. Felix didn’t neglect Palestine. In 1934, he had spearheaded the Joint’s three-million-dollar effort to resettle Jews there as honorary president of the Palestine Economic Corporation. If a solid, sober Republican at home, Felix fantasized about a classless society in Palestine, purged of human frailty. His Utopian vision of Jewish farmers and artisans settling there was oddly reminiscent of the dreams he had once projected onto the Agro-Joint in Russia.

  In the last analysis, Felix was less concerned with where German Jews emigrated than whether they emigrated. In 1935, the Joint Distribution Committee used approximately a third of the money it allocated for German-Jewish relocation in Palestine. That year, Felix chaired the drive to create the ten-million-dollar Refugee Economic Corporation and became its first president. The group provided loans to Jews moving anywhere. Weizmann, aghast, suspected that affluent non-Zionists had again betrayed an unspoken bias against Palestine. He later told Felix, “All the results in other countries, with the possible exception of North America, are ridiculously small in comparison with what Palestine can do for German Jewry, and what it has already done.”9 Felix wearied of those who seemed to place ideology above the simple, inescapable matter of saving lives.

  Relations between Felix and Weizmann deteriorated from other disputes as well. Weizmann had gotten Israel Sieff of Britain’s Marks and Spencer to establish a scientific institute in Palestine in memory of his teenage son, who had committed suicide. As president of the Hebrew University, Weizmann pictured the Sieff Institute as a wing of the university. Felix and others alleged that Weizmann ran the Sieff lab as his personal fiefdom, diverting money to it rightly destined for the university, and this assault on his integrity deeply angered Weizmann.