Eric M. Warburg
Transatlantic commuter and mediator
A German-born Jew with an American passport, the investment banker Eric Warburg was a transatlantic commuter at home in the United States as well as in Germany. Warburg’s name was, first and foremost, associated with the banking business—the Warburg family’s banking firm has existed in Hamburg since the late eighteenth century. However, Eric Warburg also earned a reputation as a political and economic adviser with considerable diplomatic skills, which he often put to use away from public view. Furthermore, he was a pivotal figure in negotiations of the Jewish Claims Conference after World War II, distinguished himself as a successful fundraiser for numerous causes, and was a patron of the arts. He was part of a transatlantic business and social elite, whose networks traversed the trials and tribulations of the twentieth century.
The Warburg Family’s Transatlantic Network
Born into the Wilhelmine era, Eric Warburg grew up witnessing the astounding success of his father, Max Warburg, and the family’s firm, M. M. Warburg & Co. The Warburg’s counted among their business partners and friends such illustrious figures as Albert Ballin, father of modern cruise ship travel and general director of the famous Hamburg-America Line, and Prince von Bülow, former Reich Chancellor of the German empire. Moreover, Max Warburg belonged to a circle of advisors of the German emperor, Wilhelm II. Following World War I, Max Warburg participated in the negotiation of the Versailles Treaty as member of the German delegation, though he declined the offer to chair the Finance committee and instead suggested his partner in the Warburg bank, Carl Melchior (Warburg 1983). The Warburgs’ economic ascendance was also expressed in the steadily rising number of board seats that Max Warburg held prior to the 1930s. By the mid-1920s, he served on 27 company boards, despite his initial intention to limit it to the one he held at Blohm & Voss, Germany’s biggest shipyard at the time. The last one added was on the I.G. Farben board (Chernow 1993). Though Warburg was forced to forfeit these seats after the Nazi seizure of power, they were nevertheless an expression of M.M. Warburg & Co.’s excellent standing in business and industry. This ultimately also provided a foundation for his son Eric’s successful reestablishment of business networks after World War II.
The Warburg family had furthermore established a significant branch of the family in the United States of America around the turn of the century through the marriages of two of Eric’s uncles, Paul and Felix Warburg. The former married Nina Loeb, daughter of Salomon Loeb, a founding partner of the New Yorker Wall Street banking house Kuhn, Loeb & Co. The latter married Frieda Schiff, the sole daughter of Jacob H. Schiff, a senior partner in the same firm. Both Warburg brothers eventually joined as partners of Kuhn, Loeb, the second biggest private bank in the United States prior to World War I (Klessmann 1998).
Apprenticeship on Wall Street in the 1920s
Eric Warburg graduated early from secondary school in order to volunteer for military service in 1918. After the war, he held apprenticeships with banks in Frankfurt and Berlin and subsequently with N.M. Rothschild & Son in the City of London as well as with his uncle Paul Kohn-Speyer’s company Brandeis, Goldschmidt & Co, the largest non-ferrous metals dealer in England. His training as an international banker then got its finishing touches in the United States where he spent three years. For the most part he lived with his New York relatives, Felix and Frieda Schiff Warburg, in Woodlands near White Plains, N.Y.
Eric Warburg worked at the International Acceptance Bank (IAB), which had been established by his uncle Paul Warburg after his service at the Federal Reserve Board. IAB sold commercial papers to finance the reconstruction of European countries after World War I. Since Eric was close to his cousin Frederick Warburg, Frederick’s circle of friends soon became Eric’s as well. Among them were the “McCloys, the Garrisons, the Parkers, Frank Hatch, George Brownell,” all of them young ambitious Wall Street lawyers and bankers (Warburg 1983, 74). Eric’s timing was fortuitous as his family at the time advanced into the upper echelons of American east coast establishment (Chernow 1993).
While apprenticing on Wall Street, Eric Warburg also did business with law firms, including Sullivan & Cromwell. The firm was involved in American-German business deals well into the Nazi period, and both Dulles brothers, Allen and John Foster, worked there, though they would later distinguish themselves as head of the Central Intelligence Agency (CIA) and Secretary of State respectively. In sum, his time spent as an apprentice in New York laid the groundwork for many of the networks and connections that would support his later transatlantic career and eased his transition to exile during the 1930s.
Brief Return and Emigration to America
Upon his return from the United States, Eric was made partner in his family’s banking firm. Yet, political developments in the Weimar Republic made conducting business increasingly difficult. With the Nazi rise to power, the Warburg’s success story in Germany came to a dramatic halt. In 1938, like thousands of other Jewish-owned businesses, the bank fell prey to “Aryanization.” When the overall situation in Nazi Germany became unbearable, Eric and his parents departed for the United States. Fortunately, Eric already held the status of permanent resident which allowed him to quickly become naturalized. As an American citizen he could then in turn obtain permission for his parents, Max and Alice Warburg, to stay as well. That same year, Eric started his own business, E. M. Warburg & Co. that he staffed with old employees of Warburg businesses in Europe who had also managed to immigrate to the United States. Among its clients “were the fortunate few who had managed to take some capital out of Europe, especially Germany” (Warburg 1983, 131).
The Warburg’s wealth and existing family ties to the United States allowed for a relatively smooth transition compared to the experience of many other exiles. In 1938, an estimated 300,000 German citizens were waiting to immigrate to the United States. The entry quota, however, was as low as 27,000 per annum. Unlike many other émigrés, Eric Warburg felt very much at home in the United States. Even before his actual departure from Nazi Germany, Warburg had chosen the U.S. as his preferred country of resettlement. Since “I had spent three of the happiest years of my youth there… I knew that I would probably feel far more at home there than in, say England, Holland or Sweden.” (Warburg 1983, 100-101). Besides running his newly established business, Eric Warburg joined several assistance committees trying “to help refugees stranded in New York to find homes and some sort of work else-where in the country” (Warburg 1983, 139). As chairman of the National Committee for the Resettlement of Foreign Physicians belonging to the National Refugees Service (NRS), he assisted several hundred German and Austrian doctors to settle in the United States. Moreover, Eric Warburg lent financial assistance to help people leave Europe during the war. In 1941 he deposited money with the Jewish Joint Distribution Committee’s Transmigration Bureau to have three people immigrate to the U.S. (JDC Online Archives).
At the outbreak of the war, Eric Warburg once again volunteered for military service and, at the age of 42, was enlisted by the U.S. Army Air Force. Like other family members and many émigrés, he was assigned to Anglo-American intelligence gathering and analyzing projects as he possessed the necessary language skills, as well as intimate knowledge of foreign countries and economies (Chernow 1993). Warburg became chief interrogator and liaison officer between American and British military intelligence. According to historian Ron Chernow, Warburg’s wartime service secured him “entrée in both Washington and Whitehall, where he collected powerful friends who would help to advance his postwar career” (Chernow 1993, 522).
First Postwar Returns to Germany
Indeed, during the postwar years Warburg successfully expanded his pre-war and wartime networks. In May 1945 he met his old New York acquaintance Allen Dulles who was now in charge of the American intelligence service for Germany as head of the Office of Strategic Services (OSS) in Switzerland and later in occupied Germany. Through Dulles, Warburg became acquainted with survivors of the German resistance in the summer of 1945, including Fabian von Schlabrendorff who later on became a judge of the Constitutional Court of West Germany. They developed a friendship, but soon found each other on opposite sides of the bargaining table. When the Conference on Jewish Material Claims against Germany began negotiations with German companies to compensate former concentration camp inmates for forced labor Eric Warburg was approached and asked to act as honest broker. Claims conference officials sought Warburg’s intervention since he was acquainted with a number of the negotiators representing the successor firms to I.G. Farben, Krupp, Siemens, and Flick. Furthermore, Eric Warburg made available the offices of the Warburg bank in Hamburg for meetings between Claims conference officials and attorneys of the respective firms (Ferencz 2002)). In the case of the Dynamite Nobel AG, a munitions producer of which Friedrich Flick held 82% of the shares, it was Fabian von Schlabrendorff who Warburg met and corresponded with most frequently between 1962 and 1967 (Stiftung Warburg Archiv, SWA). Despite the close relationship between the two men, negotiations ended most unsuccessfully for the claimants as Friedrich Flick, after years of skillfully protracting negotiations, claimed to be short of funds (Ferencz 2002).
Since Warburg did not intend to join the U.S. military government and refused to officially participate in the Nuremberg trials that began in November 1945, he resigned from active duty and returned to New York. In the immediate postwar years, Warburg’s priority was to revive his New York firm. Still, he remained loyal to the Air Force intelligence community and throughout the 1950s, as reserve officer, gave lectures at the CIA to train future interrogators. As a civilian, he joined the Council on Foreign Relations (CFR), America’s most prestigious and most influential foreign policy think tank of the postwar era, pursuing a grand internationalist agenda.
Warburg had established contact with the family’s old banking firm in Hamburg, now under the name Brinckmann, Wirtz & Co., soon after the war. In 1949 a restitution comparison was made, which made the Warburg family represented by Eric M. Warburg once again partner in the firm. From then onward, Eric had good reason to travel to West Germany and particularly to Hamburg quite frequently, thus becoming a frequent transatlantic commuter. However, only in 1956 did Eric finally rejoin the bank’s management (Klessmann 1998, 133 and 137). Since 1970, the bank again bears the name M.M. Warburg.
Postwar Role in West German-American Relations
Eric Warburg was not, however, simply trying to regain the family’s bank in Hamburg. His broader goal was to “take part in building a bridge between the old world and the new, in particular Germany and the United States, since I had spent so many years on both sides of the Atlantic” (Warburg 1983, 238). He helped establish two organizations in pursuit of that goal: the Atlantik-Brücke and the American Council on Germany (ACG). Although he only held the office of treasurer of the ACG, he “always sponsored” and “helped on both sides.” The larger goal he hoped to achieve through the activities of the two organizations was to firmly integrate West Germany into the Western community of states and forge a strong anti-communist Atlantic Alliance.
Aside from his involvement with such private transatlantic elite organizations, Warburg showed his attachment to Germany in several other ways. Despite the injustices his family had suffered, Warburg was an open opponent of the Morgenthau Plan and criticized any Allied dismantling of industrial plants in West Germany. He arranged a meeting with his old friend John J. McCloy, as the newly installed U.S. High Commissioner for Occupied Germany, in 1949 at which Warburg argued against the Allied dismantling program. McCloy eventually gave in, asking Warburg to draft a list of plants to be saved from dismantling, which included the steel works of August Thyssen and the Krupp synthetic gas works (Chernow 1993). By the late 1950s Eric Warburg had reentered his family company’s management as a liable partner and had decided to return to Germany for good. Despite his wife’s initial opposition, the entire family settled in Hamburg and the children attended German schools. Yet the family retained strong ties to the United States through relatives and business. Besides the many American cousins, there was Eric’s youngest sister Gisela who had married the Federal Judge Charles E. Wyzanski and his oldest daughter who later moved back to the United States to study medicine there. In 1966, Lionel Pincus joined E. M. Warburg & Co. and though the company subsequently changed its name to Warburg, Pincus & Co., Eric remained a partner in the firm that he had established in 1939. Shortly before his definite return to Hamburg, Warburg joined the Foreign Committee of the American Jewish Committee (AJC) acting as their media watchdog in Germany with a special eye on anti-Semitism (Chernow 1993, 594).
Eric M. Warburg in the Midst of a Transatlantic Elite Network
In this tentative biographical sketch of Eric M. Warburg’s life he is portrayed as a transatlantic commuter with a wide-reaching personal network that linked him to key institutions, organizations, and individuals. Although Eric M. Warburg never pursued a political post or a career in politics, he kept close to the influential and powerful members of those circles. In the United States, John J. McCloy, the former U.S. High Commissioner for Germany, was one of Warburg’s most notable high profile contacts. In Germany, it was Helmut Schmidt, the German chancellor from 1974 to 1982, with whom he kept a close friendship from the 1960s onwards and shared a passion for sailing. It was to Eric Warburg that Schmidt would turn for advice regarding German-American relations (Schmidt 1996).
Though born in the Wilhelmine era and having lived through the Weimar Republic and Nazi period, it was the confrontation with Soviet communism that shaped Eric Warburg most. Shortly after the armistice in 1945, Warburg lobbied General Eisenhower to give up Berlin and in turn keep major parts of central Germany harboring “10 million people and vital industrial potential … crucial in maintaining the equilibrium between the East and the West.” He was convinced that had the allies followed his advice “it would have been quite improbable that Communist Democratic German Republic could ever have been created” (Warburg 1983, 180–181). He applied a similar line of argument when convincing John J. McCloy to stop dismantling German industry: “Without a solid economy the German people … would fall prey to Communism” (Warburg 1983, 232–233). In light of his staunch anti-communist attitudes, Warburg’s commitment to the reconstruction of Germany as well as to good relations with the United States despite the Jewish people’s, the world’s, and his family’s sufferings under the Nazi regime become more understandable.
With his multifaceted network linking him to the business and industrial communities of West Germany as well as the United States, and his involvement in the transatlantic activities of the Atlantik-Brücke and the American Council on Germany connecting him to political circles, the media, and academia, Eric M. Warburg can be seen as a representative of a transnational elite that arose anew in the postwar era and helped to shape the Cold War Atlantic Community.
Letter from Hans Karl von Borries to Christopher Emmet, March 10, 1970. Christopher Emmet Papers, Box 64, HIA.