The Jews in America Trilogy

by Birmingham, Stephen;

  Everyone who knew him knew what he meant. Again and again, he had refused to participate in loans involving Czarist Russia. He had predicted, in fact encouraged, a Russian revolution. He had helped assure that Russia lost its war with Japan. In protest against the massacre of Russian Jews at Odessa in 1905, he had gone to President Roosevelt, urging him to urge the Congress to act against the Czarist government and had succeeded in getting Roosevelt to write a personal letter to the Czar. After Jacob’s speech, there was a short silence. He then offered to resign from Kuhn, Loeb rather than be connected with the loan. Needless to say, his resignation offer was immediately and unanimously rejected. To Lord Reading, the firm addressed a short note, asking to be excused from participation.

  That evening, leaving the office, Otto Kahn said sorrowfully to Morti, “The old man was magnificent today, but wait till you see the papers in the morning.” Sure enough, the headlines proclaimed:

  KUHN, LOEB, GERMAN BANKERS,

  REFUSE TO AID ALLIES

  It was as though a funeral wreath had been hung on Kuhn, Loeb’s door. While reaction in New York was shocked and silent, reaction in London was angry and noisy. All at once, the Kuhn, Loeb name became unmentionable anywhere in the city. Doors on both sides of the Atlantic that had been open were suddenly closed.

  It seemed to be up to Otto Kahn to do something about it. Certainly no one could sensibly call him pro-German. From as early as 1907 Kahn had been quoted as an expert on European affairs, and in speeches he had deplored a Germany being “possessed gradually by a demoniacal, obsessive worship of power and a will toward world dominion.” The German people, he had declared, were “misled, corrupted, and systematically poisoned by the Prussian ruling class, their very minds perverted and their moral fiber rotted.” He had seen as a young boy in Mannheim the Prussian spirit “ruthlessly pulling down the old Germany, which was dear to me, to which I was linked by ties of blood, fond memories and cherished sentiments.” On subsequent trips to Germany he had watched what he called the “sinister transmutation” which Prussianism had effected in Germany and which he felt was a threat to the entire world. Kahn had read Schopenhauer and Nietzsche and understood better than most Americans some of the doctrines—“the will to war, will to power and will to overpower”—that were guiding German thought. In the fall of 1914 he had told Gatti-Casazza to remove all German operas from the repertory of the Metropolitan for the duration of the European war, and his aim was mainly to stop performances of the works of Wagner, which, he felt, “translated Nietzsche’s Übermensch philosophy into a language disturbingly understandable even to illiterates.” This was not easy for him to do, because Wagner’s music was perhaps his greatest love. And finally, of course, his own anti-German position was not an easy one. Like Felix Warburg and many other German Americans who were pro-Ally, Otto Kahn had friends and relatives in Germany, and in the German Army.

  His sister, for example, was married to a man named Felix Deutsch who was head of one of the largest public utilities corporations in Germany. In March, 1915, Kahn wrote his brother-in-law to say how much he regretted Germany’s declaration of war, that he felt Germany had precipitated the war, and that the “rape of Belgium” made him ashamed to be German-born. Deutsch replied curtly and disagreeably, and this inspired Kahn to write Deutsch a twenty-three-page letter pouring out all his sentiments. The letter, which took him four days to write, reveals him as a stylist of particular power. He accuses Prussianism of

  throwing overboard everything that civilization and humanitarian progress of centuries has accomplished toward lessening the cruelty, the hatred and the sufferings engendered by war and toward protecting non-combatants from its terrors … the violation of innocent Belgium, in defiance of solemn treaties, and unspeakable treatment inflicted on her people, the bombardment without warning of open places (which Germany was the first to practise), the destruction of great monuments of art which belong to all mankind, the Lusitania horror, the strewing of mines; the use of poison gases, causing death by torture or incurable disease; the taking of hostages—these are the facts that the noncombatant nations charge against Germany.… Such words and ideas are greeted with contempt by your spokesmen and scornfully termed empty phrases and sentiment. If these are mere phrases, then the whole upward struggle of the world for endless years past has been founded on sentimentality.

  Kahn’s fat letter to Deutsch was spotted by a French censor, who, in a routine check, opened it to see what the great American financier was saying to the great German industrialist. He soon realized that he had something of possibly great importance. He copied the letter, sent the original on, and delivered the copy to the French Minister of Information. From there it made its way to England, and very soon a copy of Kahn’s letter was in every Allied foreign office. Excerpted and reprinted in bulk, in its original German, it soon became a major item of Allied propaganda, and was being scattered over Germany from planes. Kahn, at first, was less than pleased at this development, since he had not intended his letter to his brother-in-law for use as an anti-German leaflet. However, soon after Jacob Schiff’s refusal to participate in the Allied loan, Kahn, in an attempt to lift some of the pall that had fallen on Kuhn, Loeb, permitted his famous letter to be published in the New York Times.

  He continued his work to bring the firm out of its unfortunate spot. Both he and Morti Schiff asked to make private contributions to the Allied loan—Kahn’s was for $100,000—and this also helped. Kahn, who had always been an Anglophile and was still a British subject, had for several years kept a large house in London called St. Dunstan’s, in Regent’s Park, which had fourteen acres of gardens and grounds and was one of the English capital’s great showplaces. At the time of Jacob Schiff’s decision against the loan, “sods of earth” had been hurled at the windows of St. Dunstan’s, and now Kahn decided to make a definite move to woo back England’s public and financial community.

  Presently the Times of London was announcing:

  The King and Queen are showing great interest in arrangements which have been completed to provide for the welfare of officers and men of both services who lose their sight in the war. The scheme is in the hands of the Blinded Soldiers’ and Sailors’ Committee, of which Mr. C. Arthur Pearson is chairman.…

  Mr. Otto Kahn has generously placed at the disposal of the Committee, for the purposes of a hostel, St. Dunstan’s.… In the grounds will be installed an open-air club where those of the blind men who wish to live in the country will be taught poultry-culture, garden and farm work, way-finding, marketing, and sports and games.

  By the fall of 1915 St. Dunstan’s was serving 130 blind British veterans, and the congratulatory mail was pouring in to Otto Kahn. “You have certainly endeared yourself to all on this side of the water,” said one. “No single thing that has been done by an American has been such a conspicuous and effective help as the turning over of St. Dunstan’s as a hospital and training place for the blind,” said another.

  In fairness it should be pointed out that not all Otto Kahn’s public relations went that smoothly. As his wealth increased to Croesus proportions, Otto Kahn’s love of stately mansions became overweening. In addition to St. Dunstan’s, he had his Italian villa in Morristown, New Jersey, and no less than three houses in East Sixty-eighth Street. He was in the process of selling these three, however, and of building his huge house at 1100 Fifth Avenue, just down the street from the Warburgs, and, as though one country house weren’t enough, he was building another in Cold Spring Harbor, Long Island. Jacob Schiff, who scolded the Warburgs for ostentation, gave up when it came to Kahn. Kahn’s Long Island place would eventually take workmen and landscape gardeners two years to build. It was in the Norman style, H-shaped from the sky, and would require a staff of 125 servants. It was very nearly as big as the old Grand Union Hotel at Saratoga. The Georgian dining room would seat two hundred, and there were so many guest rooms, each with a sunken bath, that a little card rack (of sterling silver) was secured to each d
oor so that servants could keep track of guests, and the guests could keep track of each other. There were miles of formal gardens and acres of hothouses. In a period of wartime belt-tightening, shortages, and general austerity, the Cold Spring Harbor house was widely criticized.

  Meanwhile, his celebrated letter to Felix Deutsch had made Kahn in demand as an anti-German pamphleteer. He had wanted, as a boy, to be a playwright, and he took up his pen again with glee. He was best at invective, and his alliterative polemics talked of “perfidious plotters … architects of anarchy … violators of international Law.” Germany, he wrote, was guilty of “crime heaped upon crime in hideous defiance of the laws of God and man.” In Germany his attacks were reaching their mark, and presently there was a concerted German propaganda attack against Otto Kahn. He was called a “traitor … turncoat … betrayer and corrupter of German morale.” And, inevitably, with these attacks came a wave of anti-Semitism, which, of course, swept poor Jacob Schiff along with it. He was now being vilified by both the United States and Germany. Men like Otto Kahn, the German Government announced, were no more qualified to speak for the Allied powers than Jacob Schiff was qualified to speak for Germany.* These men, said the Kaiser’s spokesmen, were Jews—“outsiders, men without a country, empty of every sentiment except the love of money.” Undaunted, Otto Kahn continued writing essays and making speeches.

  While President Wilson continued to defend American neutrality, Kahn became convinced that intervention was inevitable and essential. He had, however, been hesitant to comment on American policy in any of his speeches or essays since he was not an American citizen. At the same time, he had been reluctant to give up his British citizenship for fear that such a move would lead to further criticism in England. In January, 1917, he reached his decision and, characteristically, announced it in the New York Times. He would become a naturalized American. He received his final papers on March 28, and had less than ten days to put forth his interventionist views. On April 6 America was in the war.

  Now his speechmaking and propaganda campaign went into full swing. In one of his fieriest talks, called “The Accursed Spirit of Prussianism,” first delivered at a Liberty Loan drive, he spoke of “an abominable spirit … and the German Government, obsessed with it, deserves to be called the enemy of the whole human race.” His speeches were printed in newspapers across the country, and in Paris and London. Then, translated into German, they went to the U.S. Government Printing Office, from where, by the hundreds of thousands, they were scattered from the air over Germany. Kahn’s specialty began to be his talks before German-American groups in which he urged them to see modern Germany in its true lights, and to “set their faces like flint against the monstrous doctrines and acts which robbed them of the Germany they loved, the Germany which had the affection and admiration of the entire world.” He spoke to the German populations of Milwaukee and Minneapolis and, in Madison, Wisconsin, announced that he would turn over his entire income for war work and charities—“after deducting necessary expenses for myself and my family.” This news made front-page copy in every city in America, and a joyous Kahn wrote: “What a glory to be an American! What a joy to be alive in these soul-stirring days!” Seldom had a banker enjoyed a war so much, and even more glorious moments were to come. As the German Army advanced toward the Marne, it encountered what it took to be an abandoned convoy of American supply trucks. The soldiers fell upon the trucks, tearing open the packages they contained, which the soldiers expected to be food, only to find bales of Otto Kahn’s propaganda pamphlets. The German soldiers sat around reading what Kahn had to say, and that evening there were several desertions.

  The Kaiser’s anger, which had been only barely under control, boiled over when he heard of this incident. Newspapers in Berlin, Frankfurt, and Cologne launched massive attacks against Kahn and quoted the Kaiser himself as saying that Otto Kahn and men like him were “Schmutzfinken,” or filthy pigs.

  Undismayed by the Kaiser’s nasty-name-calling, Kahn stepped up his pamphleteering. “I wear the vilification of the Boche and pro-Boche as a badge of honor!” he cried. “My name has been on the blackest page of the Black Book of the German Government for four years.” He then announced his boldest move of all: he would go to Europe himself and “evaluate the situation.” Once again he made the front pages.

  It was April, 1918, and the North Atlantic was full of U-boats. Nevertheless, he sailed off for England, not at all sure how he would be received there. Renouncing his British citizenship had, as he expected, been criticized, and also the British had not forgotten Jacob Schiff’s stand on the Allied loan. As recently as February of that year—nearly four years after Lord Reading’s visit—the London Times had mentioned Schiff adversely, quoting him as having told a Times correspondent that he was “willing to help the Kaiser rather than the Allies.” As Kahn sailed off for Europe, however, his anti-Kaiser position was helped considerably by a published report that Germany now considered Otto Kahn the number one enemy of the state. All submarines in the Atlantic, it was said, had received instructions to torpedo Kahn’s boat, and to give this project top priority. The Kaiser was supposed to have said, “We would rather eliminate him than either the President or Pershing.”*

  Though Kahn later confessed to being “frightened” during the crossing, the voyage took place without incident, and Kahn was received respectfully in England, where he was known for St. Dunstan’s, and where he was described as an example of “changed sentiment of Germans in the United States.” He was a far greater success in France, where they remembered Otto Kahn for his work to place French operas in the repertory of the Metropolitan, and they gave him a hero’s welcome. Speaking in French, announcing that he would give 10,000 francs to the French Society of Dramatic Writers, he called France “la Terre Sainte de l’humanité,” and the deafening applause is said to have continued for eighty minutes. He had dinner with Clemenceau, who called him “the greatest living American,” and then, though the battle of the Aisne was raging, he paid a visit to the front and dined with General Pershing in a château which had been bombarded by shellfire an hour earlier.* He then went on to Spain and, perhaps, the most important of his contributions to the Allied war effort.

  In Madrid, after conferring with King Alfonso XIII, whom Kahn described as “very intelligent, exceedingly well posted and one of the most attractive men I have ever met,” Kahn happened to overhear, at a diplomatic reception, a conversation between “a pair of swarthy fellows.”

  The men, speaking in Spanish, apparently assumed that Kahn, an American, could not understand what they were saying. They were wrong. Kahn found some of their remarks highly interesting. There was, one of them hinted, to be an uprising very soon of the Spartacus League in Brussels. The Spartacus League, sometimes called the German Leninists, eventually became the foundation of the German Communist party, and during the war the League had functioned as an underground group to stir up internal dissent and to undermine German unity. (Later, the League’s chief, Karl Liebknecht, received a prison sentence for his and-Junker activities during the war.)

  Kahn was immediately aware of how important news of an underground revolution could be to the Allies. Quivering with the excitement of international intrigue, he hurried to the British Ambassador in Madrid. The Ambassador listened gravely to what Kahn had to say, and that evening placed Kahn’s report in the diplomatic pouch to London. In London it went directly to Downing Street and into the hands of Lloyd George, who, reportedly, “could scarcely believe what he read. But knowing Kahn’s reputation for scrupulous accuracy, he investigated the report and found it true.”

  Kahn’s report persuaded the Allied strategists to move ahead strongly. “He did us great service by reporting on this affair,” one of Lloyd George’s ministers said later, and it has even been claimed that the final armistice would have been delayed by as much as six months if it hadn’t been for the efforts of Secret Agent Otto Kahn.

  By the end of the war Otto Kahn was being c
alled “The King of New York.” And, in the process, the sour reputation of Kuhn, Loeb & Company at the war’s outset had sweetened considerably.

  *In 1910 Paul Warburg and Nelson Aldrich together drafted the Aldrich Bill, the first to include central banking as an element of banking reform. Paul Warburg had, meanwhile, set up the National Citizens’ League for Promotion of a Sound Banking System. The Federal Reserve Board Act, largely Warburg-designed, was passed in 1913, but the System was not operative until 1915. Warburg resigned from Kuhn, Loeb in 1917 to serve on the Board.

  * It was a subtle way to continue to hammer the point, with Americans and Britishers, that Schiff was pro-German—though he never was.

  * It is wise to remember that Kahn, at this point, had employed the publicist Ivy Lee to handle his public relations. Though very possibly true, this story smacks of press agentry.

  * In World War I bombardments often stopped conveniently for lunch.

  41

  CALAMITIES AND SOLUTIONS

  After the reaction to his war loan stand, Jacob Schiff had little more to say about the war with Germany. One of his rare public statements about the war was made in the summer of 1918, just a few months before the Armistice, when he said, “Though I left Germany as a very young man and adopted this as my country fifty-three years ago, I believe I understand Prussian aspirations and Hohenzollern methods sufficiently to confirm my belief in the most forcible necessity for winning this war completely.” Throughout the war he had concentrated on another, and to him equally crucial, matter.