Remarks on my father Eric M. Warburg

by Dr. Marie Warburg

My father was born in 1900 into a prominent Jewish banking family that had settled in Hamburg from the city of Warburg in 1649. The banking firm M.M. Warburg & Co. was founded in 1798 and experienced steady growth, particularly in the latter half of the 19th Century when the bank had established close ties to other banks within Germany and in Europe.

At the end of the 19th century, two brothers of my grandfather married into New York Jewish families and moved to New York where both became partners at Kuhn Loeb & Co, prominent bankers and philanthropists. I mention this because both of these brothers and their families maintained very close ties to their parents and siblings in Hamburg and until 1914 spent every summer with their Hamburg relatives. These close family ties to his American relatives were to become a significant early factor in widening my father’s horizon beyond Hamburg and Germany, both personally and later professionally.

In 1917, my father graduated early from high school due to having volunteered in the III. Regiment of the Prussian Guards Field Artillery in Berlin. Fortunately, his only battle experience was during the brief mutinous workers‘ uprising in Berlin on Christmas Eve 1918.

The Versailles Treaty negotiations, in which my grandfather and his close friend and partner Carl Melchior participated as members of the first German delegation and the Finance Committee respectively were to have a pervasive influence on my father’s understanding of history and the consequences which developed as a result of the extremely harsh reparation demands upon which the Allied Forces insisted. This first German delegation left the peace negotiations refusing to sign. Its members were convinced that acceptance of these demands would ultimately result in the destruction of the German economy whilst fomenting a fertile medium for nationalist revenge. And that is what ensued. Ultimately however, the next delegation signed the treaty. Throughout this war – a war which began 100 years ago and about which many new historical analyses have been published in recent years – the Warburg family was able to maintain their close familial ties across the ocean.

The lessons of WWI and the implications and consequences of the Versailles Treaty profoundly affected my father and instilled in him for the rest of his life a prevailing concern to avert repeating historical mistakes.

Following his brief experience in the German army, my father began a typical Hamburg banking training (most of Hamburg’s business elite looked down on a university education – if you knew how to race on a sloop against the tide on the Elbe river, you’d be a good banker). This training required working at different banks both in Germany and abroad.

After traineeships in Berlin, Frankfurt and London he was given the choice to attend university, but decided instead in 1923 to go to America. On entering, the immigration officer tried to convince him to move to the U.S., stating „we need fellows like you“. Two years later my father discovered that this officer had somehow placed him on the immigrant quota which meant that he could obtain a renewable „permit to re-enter“ – avoiding the need to apply for a visa every time he visited the U.S. Keeping this permit to re-enter active probably saved his life as well as the lives of my grandparents, when he emigrated from Nazi-Germany in 1938. A large segment of the extended Warburg family that stayed behind in Hamburg and fled to Holland did not survive the Shoah.

My father spent his first year in the U.S. as a trainee with his Uncle Paul. Paul Warburg had first joined Kuhn Loeb & Co. as partner, but subsequently cofounded the Federal Reserve System and served as Vice Governor of the Federal Reserve Board from 1914-1918. In 1921 he had founded the International Acceptance Bank.

After a year, Uncle Paul advised my father to leave his highly privileged workplace and lifestyle and gain additional experience in the rest of the country, supplying him with various letters of introduction. He finally ended up in Portland Oregon in 1924, where he landed a job in the Foreign Department of the First National Bank. He was extremely happy there and had little, if any, desire to return to Hamburg. He loved his work. He lived in a boarding house run by a Scottish lady who had previously been the madam in a brothel in Alaska, had a girlfriend, many friends and was about to buy a car. It took the diplomatic skills of his uncle Paul to convince him to return – at least to New York. Basically, Uncle Paul threatened my father with pulling the proverbial plug in the comfortable bathtub he was lying in. And my father loved to take baths. New York was at least closer to Hamburg than Portland.

On returning to New York, my father spent his third year in the U.S. working again at the International Acceptance Bank. There he gained experience in mid-term credits for European industries in the aftermath of WWI and had frequent business interactions with the law firm Sullivan & Cromwell, where he got to know both John Foster and Allen Dulles. He travelled frequently to Boston and Washington and established a wide circle of friends, amongst them Jack McCloy. Today one would say he was an excellent networker. It was “with great reluctance“ he later wrote, that „I left that youthful and energetic country.”

I believe that these three years laid the foundation for my father’s transatlantic commitment. They were essential in providing him with an in-depth experience and understanding of America and its various regional differences and exposure to high-level business, political and intellectual circles.

After returning to Hamburg in 1926, my father became partner at M.M. Warburg & Co. in 1929. But the Weimar Republic was increasingly becoming unhinged and this was made worse by the massive inflation that set in – culminating in the Great Depression in the late 1920s. This was also a time when rising anti-Semitism and the emergence of the Nazi Party and Communist Party were intimations of events to come. The bank in Hamburg was actually destined to collapse, as many others did – had it not been for my two American great uncles, Felix and Paul, who risked a major part of their fortunes to save the family’s bank.

During the early 1930s my father travelled often between Germany, America and throughout Europe, but after Hitler’s rise to power, the partners of M.M. Warburg & Co. were increasingly limited by the Nazis in their capacity to perform banking activities or serve on boards.

By the mid-1930s my grandfather, great uncle and my father were almost exclusively devoting their time ameliorating the fate of Jews in Germany. They came up with various solutions to expedite their emigration from Germany. These efforts were tolerated by the Nazis (the onerous Reich escape taxes had to be paid, of course). In the end, the Nazi state usually succeeded in confiscating about 90% of any emigrant’s assets and possessions. and a highly sophisticated financial engineering concept was developed whereby $3,000 per person were generated to pay for each affidavit and immigration visa by virtue of a revolving credit that needed to be repaid after an emigrant had arrived in the U.S. or another country.

During this time, my father managed to convince the U.S. Consul General in Hamburg to relocate his office to a floor in the bank. This was very beneficial for his efforts to obtain immigration visas for Jews until a successor American Consul General arrived who was sympathetic to the Nazis and vociferously complained to the State Department about my father’s unrelenting and annoying activities on behalf of immigration visas for Jews, demanding a halt be put to his requests. All in all, my grandfather, great uncle and my father managed to get 40,000 Jews out of Germany into the U.S. and other countries – as you can imagine – against enormous odds.

Finally, in 1938, when M.M.Warburg & Co was arianized, my father left Germany (becoming a U.S. citizen in a week due to his re-entry immigrant permit from 1923), as did my grandparents who were able to become U.S. citizens as parents of a recently naturalized citizen.

One might ask what motivated my father, grandfather and great uncle, as well as my father’s four sisters to remain in Germany, given the increasingly oppressive web of anti-Semitic laws and persecution of Jews, placing their own life at great risk. The answer I was given by many family members when I posed this question years ago was that they felt unable to abandon a sinking ship as long as they could still help others leave Germany and while they remained relatively unscathed.

Surviving under those increasingly dire circumstances during this darkest time in Germany I believe, was only attributable to my father’s sense of commitment and loyalty to his family, the bank and his desire to help as many Jews out of Germany as possible. What also gave him enormous strength and spiritual sustenance were his close friendships, both in the U.S. and in Germany, with many of those Germans involved in the all too small German resistance movement and who ultimately sacrificed their lives.

In New York, my father continued to follow the developments leading up to the war intensely, while trying to build the small firm he had founded, E.M. Warburg & Co, where his early clients were Germans who had managed to escape to the U.S. with some remaining assets.

Wishing to serve the U.S. should it become involved in the war my father decided early on to volunteer by signing up for Army Air Corps. After officer training in Harrisburg, PA and Florida he joined the 9th Division of the U.S. Army Air Corps, serving first as liaison officer between the U.S. and British military intelligence. He subsequently participated as an interrogation officer in many of the military theaters in North Africa, Europe and ultimately Germany, where in May 1945 he interrogated the high ranking German Air Force officers prior to the Nuremberg trials, including Hermann Göring – successfully disguised as a U.S. officer of Swedish descent with the name of Colonel Wikstroem.

His view on interrogations was that prisoners of war needed to be treated humanely and with respect. Treating prisoners of war as „peers“ and convincing them that the Allied Forces were exceedingly well informed about their activities were the prerequisites to gleaning useful information.

At the end of WWII my father was consulted by the Pentagon on the proposed division of Germany amongst the Allied occupation forces. To his absolute horror, he was shown a map with Hamburg and the strategically important Kiel Canal as part of the Soviet occupation zone. Fortunately, he was able to present arguments which convinced his superiors otherwise, and to successfully lobby for a U.S. port enclave of Bremerhaven within the British occupation zone as well. While the U.S. considered the Soviet Union a friend, my father was to caution his superiors against too much trust in the Soviets – a conviction which turned out to be very accurate. It was this conviction that also motivated his efforts to both rebuilding Germany and strengthening the ties between Germany and the U.S., especially in view of discussions within German political circles of Germany taking a much more “neutral” position.

What strikes me as interesting is how during his military service years my father – freed from his familial and professional responsibilities – was able to manage extreme and complex situations with diplomacy and sensitivity, both in dealing with the British and French Allies as well as with Germany. His military service also gave him many important contacts both in the U.S. as well as in Britain and Germany.

During the immediate post war years, my father travelled to Germany often, reconnecting with the Hamburg firm and trying to support those who had resisted Hitler. He was keenly aware of and opposed to the Morgenthau Plan, which enjoyed popularity in the U.S. and which he thought was entirely misguided. In his view, a rural Germany would be easy prey for annexation by the Soviets and also would increase anti-American sentiment in Germany, not conducive to strengthening the relationship between both countries.

After his friend Jack McCloy was appointed Germany’s first High Commissioner in August 1949, they had a memorable dinner during which Jack McCloy told him he thought the Allies should continue the dismantling program of German industries that had already begun. The Germans, said McCloy, should be treated as “the Romans did the conquered Germanic tribes, by breaking their swords over their knee in front of them“(Kai Bird). A heated argument resulted between the two men in which my father tried to convince his friend that implementing the complete dismantling of German industries would be tantamount to repeating the mistakes of the Versailles treaty and its consequences. As Ron Chernow states in his biography on my family, my father „warned that (demolition) would poison German relations with the Allies, foster nationalism and possibly drive Germany towards Communism.“ He told McCloy that it was absolutely necessary to rebuild Germany in order to create a reliable and strong ally. At the end of the dinner, Jack McCloy asked my father to draw up a list within 48 hours of those industries which should be spared from demolition. My father provided the list, and Jack McCloy subsequently put in great efforts to convince the U.S. and the Allies that this was ultimately the right policy to pursue.

The friendship between these two men also led them to be involved in two other post WW II endeavors, the first being asked by the Jewish Claims Conference to convince German corporations who had engaged in using forced labor to provide restitution, a very difficult assignment.

The second endeavor that my father and Jack McCloy embarked upon was the creation of the American Council on Germany. During the early postwar years, a small group of individuals in the U.S. and Germany began conceiving of two organizations, one American and one German, which would be separate but would work together closely in helping to foster a lasting alliance between both countries. The American Council on Germany and the Atlantik-Brücke were established in 1952. Jack and Ellen McCloy, my father, and Christopher Emmet – a wealthy and politically active journalist and author – cofounded the ACG and Marion Dönhoff a journalist with the German weekly „Die ZEIT“, Erik Blumenfeld, an Auschwitz survivor and businessman/politician, my father and a few other friends cofounded the Atlantik-Brücke. These individuals all shared a common perspective: they were atlanticists, anticommunist, wary of Soviet aggression and convinced that Germany needed to become a strategic ally. This perspective was enforced during the ensuing Cold War period. Inspired by the German English Königswinter and later the Bilderberg Group conferences, the ACG and Atlantik-Brücke created a common biannual high level conference which provided a platform for off the record exchange between leading experts and policy makers in business, politics, journalism and academia, law and diplomacy. Other activities which these two organizations engaged in separately were topic specific exchange programs, fellowships, studies, publications and study groups.

In addition to the biannual conferences the other main program established in 1973 by the ACG and the Atlantik-Brücke was the Young Leaders program, in which meanwhile over 1,000 individuals have participated, many of whom held or hold high level positions in their respective countries. For many years this was a joint program, but for several years now it has been conducted separately by each organization.

In conclusion, I hope this broad brush stroke outline of the significant chapters in my father’s life and how they shaped his personality and his motivation to establish the American Council on Germany and the Atlantik-Brücke with the help of his American and German friends is clear. The inception of these two organizations occurred at a time when the rebuilding of Germany after 1945 had just started and these efforts did not enjoy widespread popularity.

However, the values and principles on which both organizations were based remain as important and current as they were then. I dare say my father would contend that even though a very strong alliance between the U.S. and Germany has developed, there will always be challenges. The current challenges we face have changed significantly since the fall of Communism (involvement in military interventions, NSA, containment of terrorism, climate change, immigration / migration, trade, Pacific pivot, the EU and financial crisis -­‐ to name only a few ) but these challenges can only be addressed in a collaborative and constructive manner.

This text is a shortened version of remarks held by Dr. Marie Warburg on the occasion of the San Diego Conference of the Eric M. Warburg Chapters of the American Council on Germany on January 25, 2014.