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Jewish Idea in American Monetary Affairs
The Remarka ble Story of Paul Warburg, Who Began Work on the United
States Monetary System After Three Weeks' Residence in the Country
MR. BRISBANE says that Jewish bankers exer
cise their large measure of control because they
ire abler than the other bankers. It was very
good of Mr. Brisbane to say so, and it adds to the
sum of his weekly, almost daily, worship at the Jewish
shrine, but it is scarcely true. Jewish bankers do not
yet control the United States, and the principal reason
they do not is that they are not abler than the other
bankers. Doubtless they seek control : doubtless they
have almost grasped it on several occasions ; but not yet.
Nevertheless they form such a formidable force,
and with their international connections constitute such
a political problem, that the mere fact of their failing
to top the column of control is not so reassuring as
The great Jewih banking houses of the United
States are foreign importations, as perhaps everyone
knows. Most of them are sufficiently recent to be con
sidered in their immigrant status, while the thought of
them as aliens is stimulated by their retention of over
sea connections. It is this international quality of
the Jewish banking group which largely accounts for
Jewish financial power : there is team-play, intimate un
derstandings, and while there is a margin of competi
tion among themselves (as at golf) there is also a
wiping out of that margin when it comes to a con
test between Jewish and "Gentile" capital.
Four Jewish-American Financiers
FOUR conspicuous contemporary names in Jewish
American finance are Belmont, SchirT, Warburg and
Kahn. All of them, even the most recent, are of for
August Belmont was the earliest and arrived in
America in 1837 as the American representative of the
Rothschilds in whose offices he had been raised. His
birthplace was that great center of Jewish international
finance, Frankfort-on-the-Main. He became the founder
of the Belmont family in America, which has largely
forgotten its Jewish origin. Politics was a part of
his concern in this country, and during the critical
time from 1860 to 1872 he was chairman of the na
tional Democratic committee. His management of the
Rothschild interests was exceedingly profitable to that
house, although the operations in which he engaged
were quite simple compared with the operations of the
Jacob Schiff is another Jewish financier who was
given to the world by Frankfort-on-the-Main. He
entered the United States in 1865, after having passed
his apprenticeship in the office of his father, who was
also an agent of the Rothschilds. The name Schiff runs
a long way back without change, unlike the name of
Rothschild. Originally named Bauer, this family of
financiers took a new name from the red shield which
adorned their house in the Jewish section of Frankfort
and thus became "Rot-schild." Commonly the last syl
lable is pronounced as if it were "child"; it is "schild,"
shield. An epoch-making family in itself, it has trained
hundreds of agents and apprentices, of whom Jacob
H. Schiff was one. He became one of the principal
channels through which German-Jewish capital flowed
into American undertakings, and his agency in these
matters gave him a place in many important depart
ments of American business, especially railroads, banks,
insurance companies and telegraph companies. He
married Theresa Loeb, and in due time came to be head
of the firm of Kuhn, Loeb & Company.
The International Mr. Kahn
MR. SCHIFF, too, was interested in politics with a
Jewish angle, and was perhaps the moving force in
the campaign which forced Congress and the President
to break off treaty relations with Russia, then a friendly
nation, on a strictly Jewish question which had been
skillfully given an American aspect. Mr. Schiff was
of inestimable assistance to Japan in the war against
Russia, but is understood to have been disappointed by
Japan's shrewdness in preventing too high a return
being made for that assistance.
Associated with Mr. Schiff in Kuhn, Loeb & Com
pany is Otto Herman Kahn, who is probably more in
ternational than were either of the two gentlemen men
tioned ibove and is more constantly engaged in dabbling
in mysterious matters of an international nature. This
characteristic may be accounted for, however, by his
experience of many countries. He was born in Ger
many and is also a product of the Frankfort-on-the-Main
school of finance, having had connections with
the Frankfort Jewish house of Speyer.
Of just how many countries Mr. Kahn has been a
citizen is a question not easy to determine here because
of the doubt that was recently cast upon his American
citizenship by a protest against his being permitted to
cast his vote last year and by his failure the an
nounced cause being physical indisposition to cast his
vote. If Mr. Kahn is a citizen of the United States (a
status that will be readily proclaimed upon proof that
he is), that probably increases the number of his cit
izenships to three. He was a German citizen by birth,
and served in the German Army. And in 1914, in
August, at the time of the outbreak of the European
War, when efforts were being made, which afterward
succeeded, to put Paul M. Warburg, a member of the
firm of Kuhn, Loeb & Company, on the Federal Re
serve Board, Mr. Warburg testified that at that time
Mr. Kahn was not a citizen of the United States.
Senator Bristow "How many of these part
ners are American citizens, or are they all Amer
ican citizens . . . ."
Mr. Warburg "They are all American citi
zens except Mr. Kahn." (P. 7, Senate Hearings,
August 1, 1914.)
Senator Bristow "Now, the members of your
firm, arc they all American citizens except Mr.
Mr. Warburg "Except Mr. Kahn, yes."
Senator Bristow "Was Mr. Kahn ever an
Mr. Warburg "No."
Senator Bristow "He never was?"
Mr. Warburg "No; he is a British subject."
Senator Bristow "He is a British subject?"
The Chairman "He lives in England, does he
Mr. Warburg "No. At one time he thought
he would move to Europe, and that was when the
question arose of his standing for Parliament;
then he changed his mind and moved back to the
Senator Bristow "He was at one time a can
didate, or a prospective candidate for Parlia
ment, was he not?"
Mr. Warburg "No; he was not; but there was
talk about it; it had been suggested, and he had
it in his mind. Something had been written about
it in the papers." (P. 76, Senate Hearings, Au
gust 3, 1914.)
So, that if Mr. Kahn is a citizen of the United
States now, which as a matter of fact has been dis
puted, then he has been a citizen of three countries,
Germany and Great Britain being the other two.
Enter Paul Moritz Warburg
i R. KAHN, by the way, is one of those Jews whose
adoption of another form of faith brings no de
nunciation whatever from the Jews themselves. A most
peculiar circumstance! But doubtless not inexplicable.
Mr. Kahn is not called a "renegade Jew" nor any of the
other nasty names heaped upon Jewish converts to Chris
tianity, because he does rot deserve them. They would
not fit him. He is not renegade. And he never was
regarded for a moment by Jacob H. Schiff as anything
but a Jew, else that "Prince of Israel" would not have
chosen him to remain in America and run the business
of Kuhn, Loeb & Company, at a time when it seemed
undesirable to put the junior Schiff in full charge of
Doubtless it was Mr. Kahn's desire, just at the time
Jacob Schiff made his wishes known, to go to Eng
land and stand for Parliament.
But from New York he fulfills, probably as well as
he could from London, those mysterious missions which
frequently take him to the Continent, at which time
he makes what are regarded as certain authoritative
decisions, though just whose decisions it is not always
possible to say. In Paris particularly, and at points
east thereof, Mr. Kahn has been established in the
position of spokesman of the merican Financial Hier
archy, which, of course, he is not. But he undoubtedly
i the spokesman of some group, possibly the group
which to ably put through the Jewish program at the
Peace Conference, the group that impressed Eastern
Europe with the feeling that the United State
America was a very powerful Semitic empire. M
Kahn's trips abroad are usually unheralded, but th
results richly repay observation.
A fourth member of the Jewish financial group L
America (which is the form of statement which fr
Chaim Weizmann would sanction, rather than to '
"Jewish-American financiers") is Mr Paul YVa b
to whose testimony we have just alluded.
Mr. Warburg is the most recent of all. He wa
born in Germany in 1868; he came to the United Stat'
in 1902; he became an American citizen in 1911 H
came to the United States for the express purpose of
reforming our financial system, and it is hardly po
sible to understand fully the system in operation to
day without reference to Paul Warburg. He is a man
of very fine mind, a money-maker, but something more
a shrewd student of the systems by which money is
made. There are two types engaged in the mere work
of money-making which is better described as "money
getting," without reference to production; one type
grubs away under whatever system obtains, regarding
it as fixed as the solar system J another type is suf
ficiently detached to see the system as an artifice which
may be mended, remodeled or supplanted altogether
Paul Warburg, scion of a long line of German Jewish
bankers, is of the latter type. He is not content with
the fact that the cash-register fills itself with money;
he wants also to know how the cash-register works,
and whether it can be worked. He is thus a student
of money and of the number of ways in which it can
The Internationalism of Mr. IVarburt
DERHAPS it will be best to let him tell his own story
I as far as he goes. When he told it to the Committee
on Banking and Currency of the United States Senate
in executive session, there was some dispute as to
whether the proceedings should be recorded by the
stenographer. It was finally agreed that notes should
be made but should not be divulged. The testimony was
printed "in confidence" on August 5, 1914, and nom
inally "made public" on August 12.
The Warburgs are one of the international families
whose importance was not realized until the war, and
would not have been realized then if their interna
tionalism had not been so apparent. It was an inter
esting spectacle to see brothers occupying important
places of counsel on either side of the great struggle.
Paul Warburg learned the rudiments of banking in
his father's bank at Hamburg, Germany, studying the
over-sea trade which is the foundation of that city s
business. The banking house of Warburg in Hamburg
dates from 1796.
"After that I went to England, where I stayed for
two years, first in the banking and discount firm ot
Samuel Montague & Company, and after that I took
the opportunity of staying two months in the office ot
a stockbroker in order to learn that part of the
"After that I went to France, where I stayed in a
French bank, so that
The Chairman "What French bank was that?
Mr. Warburg "It is the Russian bank for foreign
trade, which has an agency in Paris.
"And after that I went back to Hamburg and worke
there again for a year, I think.
"Then I went round to India, China and Japan.
"And then I came to this country for the first W
in 1893. I stayed here only a short time then,
went back to Hamburg, and then became a partner
the firm in Hamburg."
The Chairman "How long were you in Ham u
then in the banking business?"
Mr. Warburg-"Until 1902 And then
over here to this country to become a partner o
Loeb & Company."
Ties of Race, Money and Domesticity
4(1 EXPLAINED in the curriculum which I g
1 Mr. Chairman, that by marriage I am j
members of the firm, the late Mr. Loeb having
father-in-law, which brought about a desire o q
of the family to bring me over here . 5 an(j
say that I got married in this country V