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http://www.jrbooksonline.com/Intl_Jew_full_version/ij59.htm -------------------------------------------------------------------------------- Jewish Idea of Central Bank for America
When Professor Seligman wrote in the Proceedings of the Academy of Political Science that "the Federal Reserve Act will be associated in history with the name of Paul M. Warburg," a Jewish banker from Germany, he wrote the truth. But whether that association will be such as to bring the measure of renown which Professor Seligman implies, the future will reveal. What the people of the United States do not understand and never have understood is that while the Federal Reserve Act was governmental, the whole Federal Reserve System is private. It is an officially created private banking system. Examine the first thousand persons you meet on the street, and 999 will tell you that the Federal Reserve System is a device whereby the United States Government went into the banking business for the benefit of the people. They have an idea that, like the Post Office and the Custom House, a Federal Reserve Bank is a part of the Government's official machinery. It is natural to feel that this mistaken view has been encouraged by most of the men who are competent to write for the public on this question. Take up the standard encyclopedias, and while you will find no misstatements of fact in them, you will find no direct statement that the Federal Reserve System is a private banking system; the impression carried away by the lay reader is that it is a part of the Government. The Federal Reserve System is a system of private banks, the creation of a banking aristocracy within an already existing autocracy, whereby a great proportion of banking independence was lost, and whereby it was made possible for speculative financiers to centralize great sums of money for their own purposes, beneficial or not. That this System was useful in the artificial conditions created by war—useful, that is, for a Government that cannot manage its own business and finances and, like a prodigal son, is always wanting money, and wanting it when it wants it—it has proved, either by reason of its inherent faults or by mishandling, its inadequacy to the problems of peace. It has sadly failed of its promise, and is now under serious question. Mr. Warburg's scheme succeeded just in time to take care of war conditions, he was placed on the Federal Reserve Board in order to manage his system in practice, and though he was full of ideas then as to how banking could be assisted, he is disappointingly silent now as to how the people can be relieved. However, this is not a discussion of the Federal Reserve System. General condemnation of it would be stupid. But it is bound to come up for discussion one day, and the discussion will become much freer when people understand that it is a system of privately owned banks, to which have been delegated certain extraordinary privileges, and that it has created a class system within the banking world which constitutes a new order. Mr. Warburg, it will be remembered, wanted only one central bank. But, because of political considerations, as Professor Seligman tells us, twelve were decided upon. An examination of Mr. Warburg's printed discussions of the subject shows that he at one time considered four, then eight. Eventually, twelve were established. The reason was that one central bank, which naturally would be set up in New York, would give a suspicious country the impression that it was only a new scheme to keep the nation's money flowing to New York. As shown by Professor Seligman, quoted in the last number, Mr. Warburg was not averse to granting anything that would allay popular suspicion without vitiating the real plan. So, while admitting to the Senators who examined him as to his fitness for membership on the Federal Reserve Board—the Board which fixed the policies of the banks of the Federal Reserve System and told them what to do—that he did not like the 12 district banks idea, he said that his objections to it could "be overcome in an administrative way." That is, the 12 banks could be so handled that the effect would be the same as if there were only one central bank, presumably in New York. And that is about the way it has resulted, and that will be found to be one of the reasons for the present situation of the country. There is no lack of money in New York today. Motion picture ventures are being financed into the millions. A big grain selling pool, nursed into existence and counseled by Bernard M. Baruch, has no hesitancy whatever in planning for a $100,000,000 corporation. Loew, the Jewish theatrical man, had no difficulty in opening 20 new theaters this year— But go into the agricultural states, where the real wealth of the country is in the ground and in the granaries, and you cannot find money for the farmer. It is a situation which none can deny and which few can explain, because the explanation is not to be found along natural lines. Natural conditions are always easiest to explain. Unnatural conditions wear an air of mystery. Here is the United States, the richest country in the world, containing at the present hour the greatest bulk of wealth to be found anywhere on earth—real, ready, available, usable wealth; and yet it is tied up tight, and cannot move in its legitimate channels, because of manipulation which is going on as regards money. Money is the last mystery for the popular mind to penetrate, and when it succeeds in getting "on the inside" it will discover that the mystery is not in money at all, but in its manipulation, the things which are done "in an administrative way." The United States has never had a President who gave evidence of understanding this matter at all. Our Presidents have always had to take their views from financiers. Money is the most public quantity in the country; it is the most federalized and governmentalized thing in the country; and yet, in the present situation, the United States Government has hardly anything to do with it, except to use various means to get it, just as the people have to get it, from those who control it. The Money Question, properly solved, is the end of the Jewish Question and every other question of a mundane nature. Mr. Warburg is of the opinion that different rates of interest ought to obtain in different parts of the country. That they have always obtained in different parts of the same state we have always known, but the reason for it has not been discovered. The city grocer can get money from his bank at a lower rate than the farmer in the next county can get it from his bank. Why the agricultural rate of interest has been higher than any other (when money is obtainable; it is not obtainable now) is a question to which no literary nor oratorical financier has ever publicly addressed himself. It is like the fact of the private business nature of the Federal Reserve Sysem—very important, but no authority thinks it worth while to state. The agricultural rate of interest is of great importance, but to discuss it would involve first an admission, and that apparently is not desirable. In comparing the present Federal Reserve Law with the proposed Aldrich Bill, Mr. Warburg said: Mr. Warburg—". . . . . . . . I think that this present law has the advantage of dealing with the entire country and giving them different rates of discount, whereas, as Senator Aldrich's bill was drawn, it would have been very difficult to do that, as it provided for one uniform rate for the whole country, which I thought was rather a mistake." Senator Bristow—"That is, you can charge a higher rate of interest in one section of the country under the present law, than you charge in another section, while under the Aldrich plan it would have been a uniform rate." Mr. Warburg—"That is correct." That is a point worth clearing up. If Mr. Warburg, having educated the bankers, will now turn his attention to the people, and make it clear why one class in the country can get money for business that is not productive of real wealth, while another class engaged in the production of real wealth is treated as outside the interest of banking altogether; if he can make it clear also why money is sold to one class or one section of the country at one price, while to another class and in another section it is sold at a different price, he will be adding to the people's grasp of these matters. This suggestion is seriously intended. Mr. Warburg has the style, the pedagogical patience, the grasp of the subject which would make him an admirable public teacher of these matters. What he has already done was planned from the point of view of the interest of the professional financier. It is readily granted that Mr. Warburg desired to organize American finances into a more pliable system. Doubtless in some respects he has wrought important improvements. But he had always the banking house in mind, and he dealt with paper. Now, if taking up a position outside those special interests, he would address himself to the wider interests of the people—not assuming that those interests always run through a banking house—he would do still more than he has yet done to justify his feeling that he really had a mission in coming to this country. Mr. Warburg is not at all shocked by the idea that the Federal Reserve System is really a new kind of private banking control, because in his European experience he saw that all the central banks were private affairs. In his essay on "American and European Banking Methods and Bank Legislation Compared," Mr. Warburg says: (the italics are ours) "It may also be interesting to note that, contrary to a widespread idea, the central banks of Europe are, as a rule, not owned by the governments. As a matter of fact, neither the English, French, nor German Government owns any stock in the central bank of its country. The Bank of England is run entirely as a private corporation, the stockholders electing the board of directors, who rotate in holding the presidency. In France the government appoints the governor and some of the directors. In Germany the government appoints the president and a supervisory board of five members, while the stockholders elect the board of directors." And again, in his discussion of the Owen-Glass Bill, Mr. Warburg says: "The Monetary Commission's plan proceeded on the theory of the Bank of England, which leaves the management entirely in the hands of business men without giving the government any part in the management or control. The strong argument in favor of this theory is that central banking, like any other banking, is based on 'sound credit,' that the judging of credits is a matter of business which should be left in the hands of business men, and that the government should be kept out of business. . . . . The Owen-Glass Bill proceeds, in this respect, more on the lines of the Banque de France and the German Reichsbank, the presidents and boards of which are to a certain extent appointed by the government. These central banks, while legally private corporations, are semi-governmental organs inasmuch as they are permitted to issue the notes of the nation—particularly where there are elastic note issues, as in almost all countries except England—and inasmuch as they are the custodians of practically the entire metallic reserves of the country and the keepers of the government funds. Moreover in questions of national policy the government must rely on the willing and loyal co-operation of these central organs." That is a very illuminating passage. It will be well worth the reader's time, especially the reader who has always been puzzled by financial matters, to turn over in his mind the facts here given by a great Jewish financial expert about the central bank idea. Observe the phrases: (a) "without giving the government any part in the management or control." (b) "these central banks, while legally private corporations . . . . are permitted to issue the notes of the nation." (c) "they are custodians of practically the entire metallic reserves of the nation and the keepers of the government funds." (d) "in questions of national policy, the government must rely on the willing and loyal co-operation of these central organs." It is not now a question whether these things are right or wrong; it is merely a question of understanding that they constitute the fact. It is specially notable that in paragraph (d) it is a fair deduction that in questions of national policy, the government will simply have to depend not only on the patriotism but also to an extent on the permission and counsel of the financial organizations. That is a fair interpretation: questions of national policy are, by this method, rendered dependent upon the financial corporations. Let that point be clear, quite regardless of the question whether or not this is the way national policies should be determined. Mr. Warburg said that he believed in a certain amount of government control—but not too much. He said: "In strengthening the government control, the Owen-Glass Bill therefore moved in the right direction; but it went too far and fell into the other and even more dangerous extreme." The "more dangerous extreme" was, of course, the larger measure of government supervision provided for, and the establishment of a number of Federal Reserve Banks out in the country. Mr. Warburg had referred to this before; he had agreed to the larger number only because it seemed to be an unavoidable political concession. It has already been shown, by Professor Seligman, that Mr. Warburg was alive to the necessity of veiling a little here and a little there, and "putting on" a little yonder, for the sake of conciliating a suspicious public. There was also the story of the bartender and the cash register. Mr. Warburg thinks he understands the psychology of America. In this respect he reminds one of the reports of Mr. von Bernstorff and Captain Boy-Ed of what the Americans were likely to do or not to do. In the Political Science Quarterly of December, 1920, Mr. Warburg tells how, on a then recent visit to Europe, he was asked by men of all countries what the United States was going to do. He assured them that America was a little tired just then, but that she would come round all right. And then harking back to his efforts of placing his monetary system on the Americans, he said: "I asked them to be patient with us until after the election, and I cited to them our experiences with monetary reform. I reminded them how the Aldrich plan had failed because, at that time, a Republican President had lost control of a Congress ruled by a Democratic majority; how the Democrats in their platform damned this plan and any central banking system; and how, once in full power, the National Reserve Association was evolved, not to say camouflaged, by them into the Federal Reserve System." Remembering this play before the public, and the play behind the scenes, this "camouflaging," as Mr. Warburg says, of one thing into another, he undertook to assure his friends in Europe that regardless of what the political platforms said, the United States would do substantially what Europe hoped it would. Mr. Warburg's basis for that belief was, as he said, his experience with the way the central bank idea went through in spite of the advertised objection of all parties. He believes that with Americans it is possible to get what you want if you just play the game skillfully. His experience with monetary reform seems to have fathered that belief in him. Politicians may be necessary pawns to play in the game, but as members of the government Mr. Warburg does not want them in banking. They are not bankers, he says; they don't understand; banking is nothing for a government man to meddle with. He may be good enough for the Government of the United States; he is not good enough for banking. "In our country," says Mr. Warburg, referring to the United States, "with every untrained amateur a candidate for any office, where friendship or help in a presidential campaign, financial or political, has always given a claim for political preferment, where the bids for votes and public favor are ever present in the politician's mind, . . . . a direct government management, that is to say, a political management, would prove fatal . . . . There can be no doubt but that, as drawn at present (1913), with two cabinet officers members of the Federal Reserve Board, and with the vast powers vested in the latter, the Owen-Glass Bill would bring about direct government management." And that, of course, in Mr. Warburg,s mind, is not only "dangerous," but "fatal." Mr. Warburg had almost his whole will in the matter. And what was the result? Turn to the testimony of Bernard M. Baruch, when he was examined with reference to the charge that certain men close to President Wilson had profited to the extent of $60,000,000 on stock market operations which they entered into on the strength of advance information of what the President was to say in his next war note—the famous "leak" investigation, as it was called; one of the several investigations in which Mr. Baruch was closely questioned. In that investigation Mr. Baruch was laboring to show that he had not been in telephone communication with Washington, especially with certain men who were supposed to have shared the profits of the deals. The time was December, 1916. Mr. Warburg was then safely settled on the Federal Reserve Board, which he had kept quite safe from Government intrusion. The Chairman—"Of course the records of the telephone company here, the slips, will show the persons with whom you talked." Mr. Baruch—"Do you wish me to say, sir? I will state who they are." The Chairman—"Yes, I think you might." Mr. Baruch—"I called up two persons; one, Mr. Warburg, whom I did not get, and one, Secretary McAdoo, whom I did get—both in reference to the same matter. Would you like to know the matter?" The Chairman—"Yes, I think it is fair that you should state it." Mr. Baruch—"I called up the Secretary, because someone suggested to me—asked me to suggest an officer for the Federal Reserve Bank, and I called him in reference to that, and discussed the matter with him, I think, two or three times, but it was suggested to me that I make the suggestion, and I did so." (pp. 570-571) Mr. Campbell—"Mr. Baruch, who asked you for a suggestion for an appointee for the Federal Reserve Bank here?" Mr. Baruch—"Mr. E. M. House." Mr. Campbell—"Did Mr. House tell you to call Mr. McAdoo up and make the recommendation?" Mr. Baruch—"I will tell you exactly how it occurred: Mr. House called me up and said that there was a vacancy on the Federal Reserve Board. and he said, 'I don't know anything about those fellows down there, and I would like you to make a suggestion.' And I suggested the name, which he thought was a very good one, and he said to me, 'I wish you would call up the Secretary and tell him.' I said, 'I do not see the necessity; I will tell you.' 'No,' he said, 'I would prefer you to call him up.'" (p. 575) There we have an example of the Federal Reserve "kept out of politics," kept away from government management which would not only be "dangerous," but "fatal." Barney Baruch, the New York stock plunger, who never owned a bank in his life, was called up by Colonel E. M. House, the arch-politician of the Wilson Administration, and thus the great Federal Reserve Board was supplied another member. A telephone call kept within a narrow Jewish circle and settled by a word from one Jewish stock dealer—that, in a practical operation, was Mr. Warburg's great monetary reform. Mr. Baruch calling up Mr. Warburg to give the name of the next appointee of the Federal Reserve Board, and calling up Mr. McAdoo, secretary of the United States Treasury, and set in motion to do it by Colonel E. M. House—is it any wonder the Jewish mystery in the American war government grows more and more amazing? But, as Mr. Warburg has written—"friendship or help in a presidential campaign, financial or political, has always given a claim to political preferment." And as Mr. Warburg urges, this is a country "with every untrained amateur a candidate for office," and naturally, with such men comprising the government, they must be kept at a safe distance from monetary affairs. As if to illustrate the ignorance thus charged, along comes Mr. Baruch, who quotes Colonel House as saying, "I don't know anything about those fellows down there and I would like you to make a suggestion." It is permissible to doubt that Mr. Baruch correctly quotes Colonel House. It is permissible to doubt that all that Colonel House confessed was his ignorance about "those fellows." There was a good understanding between these two men, too good an understanding for the alleged telephone conversation to be taken strictly at its face value. It is possibly quite true that Mr. House is not a financier. Certainly, Mr. Wilson was not. In the long roll of Presidents only a handful have been, and those who have been have been regarded as most drastic in their proposals. But this whole matter of ignorance, as charged by Mr. Warburg, sounds like an echo of the Protocols: "The administrators chosen by us from the masses will not be persons trained for government, and consequently they will easily become pawns in our game, played by our learned and talented counsellors, specialists educated from early childhood to administer world affairs." In the Twentieth Protocol, wherein the great financial plan of world subversion and control is disclosed, there is another mention of the rulers' ignorance of financial problems. It is a coincidence that, while he does not use the term "ignorance," Mr. Warburg is quite outspoken concerning the benighted state in which he found this country, and he is also outspoken about the "untrained amateurs" who are candidates for every office. These, he says, are not fitted to take part in the control of monetary affairs. But Mr. Warburg is. He says so. He admits that it was his ambition from the moment he came here an alien Jewish-German banker, to change our financial affairs more to his liking. More than that, he has succeeded; he has succeeded, he himself says, more than most men do in a lifetime; he has succeeded, Professor Seligman says, to such an extent that throughout history the name of Paul M Warburg and that of the Federal Reserve System shall be united. [THE DEARBORN INDEPENDENT, issue of 2 July 1921] -------------------------------------------------------------------------------- http://www.jrbooksonline.com/Intl_Jew_full_version/ij58.htm Jewish Idea Molded Federal Reserve Plan
That conference in its ultimate results was of the utmost importance to the United States, for then and there were formulated those fiscal devices, those financial methods, those "monetary reforms" which have exerted an influence on every citizen, rich and poor, of the Republic. Much history was made in that little trip. It irresistibly calls to memory that other trip made in 1915—almost two years before America's entry into the war—by Bernard M. Baruch. As readers of THE DEARBORN INDEPENDENT of November 27, 1920, will recall, Mr. Baruch had been financial backer of the Plattsburg camp, and in his testimony he said he thought that General Wood would admit this. Then—"I went off on a long trip, and it was while on this trip that I felt there ought to be some mobilization of the industries, and I was thinking about the scheme that practically was put into effect and was working when I was chairman of the board. When I came back from that trip I asked for an interview with the President . . . . The President listened very attentively and graciously as he always does." Mr. Baruch was an authority on the President's demeanor, for there was a long period in 1917 and 1918 during which he called at the White House every afternoon. Two momentous trips in our recent history, both of them signalized and given their principal meaning by the presence of Jews. Not that there should not have been Jews in either case; to insist upon their total exclusion would be going too far. The Jew as a citizen, bearing his part, is one matter; the Jew as a master, directing the national show, is quite another thing. It is by no means agreed that Barney Baruch was the only man in the United States who could have run this nation's war business. That is the explanation made of the high place he took—that he was the only man who could do it. Nonsense! If that be so, let us close up the nation and hand the keys over to the New York Kehillah. Mr. Baruch could say—"I probably had more power than any other man did in the war; doubtless that is true," but he had that power because he was for the time the head and front of the Jewish group for war purposes. If the explanation of Jewish mastery at critical moments were "brains," well and good, but if it were, it would be more evident to the people; brains do not need to be advertised, they advertise themselves. There is another reason. The British public recently awoke to the fact that not Lloyd George but Mr. Montagu and Sir Alfred Mond were in charge of the recent negotiations over the German indemnities. These gentlemen are both Jews, one of them of German descent. Of all the British Empire are they the only two men to advise the premier in a great crisis? If they are, why is it? The Montagus, we know, control the silver of the world; Sir Alfred Mond, we know, turned a very neat trick of keeping the sign of the Cross off the war memorials raised to the soldiers of the empire; their Jewishness always so apparent. Both financiers; both the close advisers of the premier; as Baruch to Wilson, so they to Lloyd George. Apparently there are no Anglo-Saxons on either side of the sea capable of managing these deep matters, if we are to judge from the war administrations—those that have passed off the stage and those that still linger. Lloyd George, for once stung to the quick by the criticism of the British public of his tendency to closet himself with Jews when confronted with a crucial question, retorted bitterly—with what? With the old outworn Jewish propagandist boast, that it ill became people who sang Jewish psalms in church to rag the race that wrote them! A most illuminating defense! The world would give a good deal for a true psalm from Sir Alfred Mond, Mr. Montagu, or even Sir Philip Sassoon, who is soon to become the premier's son-in-law. In our own history, Barney Baruch boldly claims his place, he unhesitatingly asserts that he had more power than any man in the war. If Allenby in Palestine needed a locomotive, if the Americans in Russia needed clothing, if the munition mills needed copper—it was Baruch who gave or withheld the word. Mr. Warburg, being of somewhat finer grain, probably due to his having less than Mr. Baruch of the rough experience of "the Street," does not make the claim that he is the chief factor in the present monetary system of the United States, nor does THE DEARBORN INDEPENDENT undertake to make it for him lest the cry of "anti-Semitism" wax wrathful again; but fortunately the fact is amply attested by a Jew whose knowledge of the matter is unquestionable. Readers have doubtless become aware by this time that for a non-Jew to say that a certain Jew is a most important factor in any field is to be guilty of anti-Semitism, while for a Jew or a "Gentile front" to say it is perfectly proper. It is a rather odd etiquette in which simple minds sometimes become confused. Professor E. R. A. Seligman, of Columbia University, is the sponsor of this great honor for Mr. Warburg. What Professor Seligman says is of such importance, both as to its source and its subject, that quotation is justified: (the italics in all cases are ours) "It is in a general way known to the public that Mr. Warburg was in some way connected with the passage of the Federal Reserve Act, and his appointment to his present responsible position on the Federal Reserve Board was acclaimed on all sides with a rare degree of approval and congratulation; but I fancy it is known only to a very few how great is the indebtedness of the United States to Mr. Warburg. For it may be stated without fear of contradiction that in its fundamental features the Federal Reserve Act is the work of Mr. Warburg more than of any other man in the country . . . . "When the Aldrich commission was appointed it was not long before Senator Aldrich—to his credit be it said—was won over by Mr. Warburg to the adoption of these two fundamental features. The Aldrich Bill differed in some important particulars from the present law . . . . The concession in the shape of the twelve regional banks that had to be made for political reasons is, in the opinion of Mr. Warburg as well as of the writer of this introduction, a mistake; for it will probably, to some extent at least, weaken the good results which would otherwise have followed. On the other hand, the existence of a Federal Reserve Board creates, in everything but in name, a real central bank; and it depends largely upon the wisdom with which the board exercises its great powers as to whether we shall be able to secure most of the advantages of a central bank without any of its dangers . . . . "In many minor respects also the Federal Reserve Act differs from the Aldrich Bill; but in the two fundamentals of combined reserves and of a discount policy, the Federal Reserve Act has frankly accepted the principles of the Aldrich Bill; and these principles, as has been stated, were the creation of Mr. Warburg and of Mr. Warburg alone. ". . . . It must not be forgotten that Mr. Warburg had a practical object in view. In formulating his plans and in advancing slightly varying suggestions from time to time, it was incumbent on him to remember that the education of the country must be gradual and that a large part of the task was to break down prejudices and remove suspicions. His plans, therefore contain all sorts of elaborate suggestions designed to guard the public against fancied dangers and to persuade the country that the general scheme was at all practicable. It was the hope of Mr. Warburg that with the lapse of time it might be possible to eliminate from the law not a few clauses which were inserted, largely at his suggestion, for educational purposes. "As it was my privilege to say to President Wilson when originally urging the appointment of Mr. Warburg on the Federal Reserve Board, at a time when the political prejudice against New York bankers ran very high, England also, three-quarters of a century ago, had a practical banker who was virtually responsible for the idea contained in Peel's Bank Act of 1840. Mr. Samuel Jones Lloyd was honored as a consequence by the British Government and was made Lord Overstone. The United States was equally fortunate in having with it a Lord Overstone . . . . "The Federal Reserve Act will be associated in history with the name of Paul M. Warburg . . . ." —(pp. 387-390, Vol. 4, No. 4, Proceedings of the Academy of Political Science, Columbia University). It surely cannot be considered invidious for THE DEARBORN INDEPENDENT thus to introduce to the people of the United States a gentleman whose influence upon the country is so vital. Just how vital can be understood only by those who have studied the puzzle of a country filled with the good things of life, and still unable to use them or to share them because of a kink in the pipe line called "money." But that Mr. Warburg himself is not entirely unaware of his position is indicated on page 56 of his testimony quoted last week. Mr Warburg had just told the Senate Committee that he was making a heavy financial sacrifice to accept the position on the Federal Reserve Board offered him by President Wilson, and into the fitness of which appointment the Senate was carefully inquiring: Senator Reed—"May I ask what your motive is, or your reason for making that sacrifice?" Mr. Warburg—"My motive is that I have, as you know, taken a keen interest in this monetary reform since I have been in this country. "I have had the success which comes to few people, of starting an idea and starting it so that the whole country has taken it up and it has taken some tangible form." Professor Seligman advises us of the strategy that was used to get the whole country to take up Mr. Warburg's idea, and of the fact that some of the items inserted to appease the public might easily be removed when the public shall have become accustomed to Mr. Warburg and the Federal Reserve Board; but Mr. Warburg adds another hint, to the effect that you can do some things by administration which you cannot do by organization. For example: Mr. Warburg wanted only one central bank which should be the sole arbiter of finance in the United States. The United States Government would have almost nothing to do save to make the money and stand back of it; the bankers of the United States, and the people thereof, would have nothing to do except what they were told; the one central bank would be the real financial governing authority. When asked by Senator Bristow to state the fundamental difference between the Aldrich plan and the present Federal Reserve plan, Mr. Warburg replied: "Well, the Aldrich Bill brings the whole system into one unit, while this deals with 12 units, and unites them again into the Federal Reserve Board. It is a little bit complicated, which objection, however, can be overcome in an administrative way; and in that respect I freely criticized the bill before it was passed." There is evidently, then, a method of administration for which severe critics might even use the word "manipulation," by which the plain provisions of a banking law, whatever they may be, may be, if not evaded, then somewhat adapted. This idea is brought to mind by a more colloquial expression of Mr. Warburg's to be found in his address on "bank acceptances" delivered in 1919: "In this connection I am reminded of a story I once heard concerning a man belonging to a species now soon to be extinct and to be found by our children in Webster's dictionary only, the 'bartender.' A man of this profession, in pre-historic times, was abandoning his position and was turning over his cash-register to his successor. 'Please show me how it works,' said the newcomer. 'I will show you how it works,' said the other, 'but I won't show you how to work it.'" The politics of Mr. Warburg and the firm of Kuhn, Loeb & Company formed part of the inquiry, and Mr. Warburg made some interesting revelations which illustrate the oft-repeated statement that it is part of Jewish policy—perhaps of large financial firms generally—to attach themselves to both parties so that certain interests may be the winners regardless of which party is defeated. Senator Pomerene—"What are your politics?" Senator Nelson—"No; we have not raised that before this committee." Senator Reed—"It has not been raised here, but I should like to know." Senator Pomerene—"It has been raised before the Senate." Senator Reed—"I will say why I should like to know." Senator Pomerene—"Well, I have no objection to saying what was in my own mind." The Chairman—"I will say that I do not know what Mr. Warburg's politics are." Senator Pomerene—"Well, I did not." Senator Shafroth—"I do not know and I do not care to know." Senator Pomerene—"I heard the statement made that the entire board was Democratic, and I had understood that Mr. Warburg was a Republican, or had been, in his affiliations." Mr. Warburg—"Well, so I was; and my sympathies were entirely, in the early campaign, for Mr. Taft against Mr. Roosevelt in the first fight. When later on Mr. Roosevelt became President Wilson's opponent my sympathies went with Mr. Wilson . . . ." Senator Reed—"Well, you would count yourself a Republican, generally speaking?" Mr. Warburg—"I would." Senator Bristow—"It has been variously reported in the newspapers that you and your partners directly and indirectly contributed very largely to Mr. Wilson's campaign funds." Mr. Warburg—"Well, my partners—there is a very peculiar condition—no; I do not think any one of them contributed largely at all; there may have been moderate contributions. My brother, for instance, contributed to Mr. Taft's campaign." Senator Bristow—"Just what would you consider a moderate contribution to a presidential campaign?" Mr. Warburg—"Well, that depends who the man is who contributes; but I think anything below $10,000 or $5,000 would not be an extravagant contribution, so far as that should be—" (Examination resumed another day) Senator Bristow—"Now, Mr. Warburg, when we closed Saturday some Senator asked you in regard to political contributions, and I understood you to say that you contributed to Mr. Wilson's campaign." Mr. Warburg—"No; my letter says that I offered to contribute; but it was too late. I came back to this country only a few days before the campaign closed." Senator Bristow—"So that you did not make any contribution?" Mr. Warburg—"I did not make any contribution; no." Senator Bristow—"Did any members of your firm make contributions to Mr. Wilson's campaign?" Mr. Warburg—"I think that is a matter of record. Mr. Schiff contributed. I would not otherwise discuss the contributions of my partners, if it was not a matter of record. I think Mr. Schiff was the only one who contributed in our firm." Senator Bristow—"And you stated that your brother had contributed to Mr. Taft's campaign, as I understand it?" Mr. Warburg—"I did. But again, I do not want to go into a discussion of my partners' affairs, and I shall stick to that pretty strictly, or we will never get through." Senator Bristow—"I understood you also to say that no members of your firm contributed to Mr. Roosevelt's campaign." Mr. Warburg—"I did not say that." Senator Bristow—"Oh! Did any members of the firm do that?" Mr. Warburg—"My answer would please you probably; but I shall not answer that, but will repeat that I will not discuss my partners' affairs." Senator Bristow—"Yes. I understood you to say Saturday that you were a Republican, but when Mr. Roosevelt became a candidate, you then became a sympathizer with Mr. Wilson and supported him?" Mr. Warburg—"Yes." Senator Bristow—"While your brother was supporting Mr. Taft?" Mr. Warburg—"Yes." Senator Bristow—"And I was interested to know whether any member of your firm supported Mr. Roosevelt." Mr. Warburg—"It is a matter of record that there are." Senator Bristow—"That there are some of them who did?" Mr. Warburg—"Oh, yes." Senator Bristow—"Will you please indicate—or do you care to indicate—what members of your firm supported Mr. Roosevelt in that campaign?" Mr. Warburg—"No, sir; I shall have to go on the principle that I cannot disclose the business of a member of my firm." The result was this: that in a three-cornered fight between three candidates, Roosevelt, Taft and Wilson, the men who constituted the firm of Kuhn, Loeb, & Company, chief Jewish financial institution of the United States, distributed their support among all three. Schiff for Wilson; Felix Warburg for Taft; and an unknown for Roosevelt—was that unknown Mr. Kahn? In any case, Wilson won, and the above examination relates to a member of the firm of Kuhn, Loeb & Company receiving an important appointment which gave him large power over the finances of the United States. The point of not discussing the affairs of Kuhn, Loeb & Company was frequently made by Mr. Warburg. "I cannot discuss the affairs of the firm nor my partners, nor be asked to criticize acts of my partners, either to approve them or in any other way. I would like to say that before we come to the point where I would feel that I should not answer any question," said Mr. Warburg. The principle of this objection was conceded by the Senate Committee, but that it ought to serve as a blanket injunction against a number of pertinent inquiries was doubted. Senator Bristow—"But you are a partner in this firm, and have you not had something to do with its operations and its management?" Mr. Warburg—"Yes." Senator Bristow—"Does that not go to show your general views and practices as a financier and as a citizen and as a business man?" Mr. Warburg—"Yes; but you have got to take them individually. . . . I cannot permit my firm to be drawn into this discussion." Senator Bristow—"But how can you divest yourself from your firm when you have been one of the managers of the firm?" Mr. Warburg—"I shall divest myself of the firm." Senator Bristow—"If the firm has done something that I might think was improper—to illustrate, being called upon to say whether or not I approve your nomination to this responsible position—have I not a right to know what your attitude was in regard to that transaction which your firm performed?" Mr. Warburg—"Well, inasmuch as my answer there might be a criticism of my firm, I would beg to be excused, and I would leave it to the committee to draw its own conclusions. . . ." In examining Mr. Warburg about the handling of $100,000,000 Southern Pacific securities, the same difficulty was experienced; Mr. Warburg objected, "but we are getting here again into the transactions of my firm!" To which Senator Bristow retorted—"Ah! but when you participated in the profits of the transaction, is it not a part of your business life?" Mr. Warburg—"Certainly it is a part of my business life, and there is no reason why I should not be proud of it. But as a matter of principle I think we should not get into a discussion of the business of my firm." Senator Bristow—"I am discussing your business." Mr. Warburg—"No, you are discussing the firm's business." Senator Bristow—"Did you get any of the profits that came from the handling of this $100,000,000?" Mr. Warburg—"You may take it that whatever my firm did I got my profits—my share in the profits." Senator Bristow—"Your share in the profits. Now, without being specific, I take it for granted that this was quite material; that that was quite a material interest in size; that is, that you are one of the important members of the firm." Mr. Warburg—"I am one of the important members of the firm." Senator Bristow—"Yes, I think the testimony and the report here show that you are the third important member—or the second, which is it?—of the firm." Mr. Warburg—"We are not numbered." Senator Bristow—"You are not; all right." Mr. Warburg—"There is Mr. Jacob H. Schiff who is the senior." Senator Bristow—"Yes." Mr. Warburg—"And the others rank very much alike." Senator Bristow—"Yes. We may take it for granted, then, that whatever profits accrued to your firm in the handling of this business here since you became a member of it, you participated in the profits as one of the partners." Mr. Warburg—"Yes, sir." Senator Bristow—"Yes. So I will assume then, of course, that you participated in the marketing of $113,000,000 of Union Pacific, and so on." The responsibilities of a member of the Federal Reserve Board, especially such a member as Paul M. Warburg would be (for it was recognized that because of his purpose and connections he would become a dominating factor), were very great, especially at the time when the appointment was being considered. They are as important now, of course, but in a different way; it is not now a question of military safety. This thought was evidently in the mind of the senators, as the following shows: Senator Hitchcock—"Mr. Warburg, one of the important functions of the board is to guard the gold supply of the country, and it has been thought that it is very important to have men on the board who had at heart only the interests of the United States, and had no foreign interests or alliances. You have said that you proposed to divest yourself altogether of your banking connections in Germany. Have you any other interests in Europe?" "No, not to speak of," said Mr. Warburg. "I may have very unimportant things, like everybody has; but I could dispose of those; it would not amount to anything." Senator Hitchcock—"Nothing in the line of banking?" Mr. Warburg—"No." A few moments later the chairman, Senator Owen, said—(the date was August 1, 1914)—"We are on the eve of a great European war, and the organization of this board is of great national importance." At this time, Mr. Warburg was a member of the Hamburg firm. He testified (p. 7)—"I am going to leave my Hamburg firm, though the law does not require me to do so." A part of the German firm of his father and brothers, a part of the American firm to which he and his brother were related by marital as well as financial ties, Mr. Warburg repeatedly said he would break off all business relationships so that he, like Caesar's wife (to quote himself), should be above suspicion. [THE DEARBORN INDEPENDENT, issue of 25 June 1921] http://www.jrbooksonline.com/Intl_Jew_full_version/ij57.htm Jewish Idea in American Monetary Affairs
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 it sounds. The great Jewish banking houses of the United States are foreign importations, as perhaps everyone knows. Most of them are sufficiently recent to be considered in their immigrant status, while the thought of them as aliens is stimulated by their retention of oversea connections. It is this international quality of the Jewish banking group which largely accounts for Jewish financial power: there is team-play, intimate understandings, and while there is a margin of competition among themselves (as at golf) there is also a wiping out of that margin when it comes to a contest between Jewish and "Gentile" capital. Four conspicuous contemporary names in Jewish-American finance are Belmont, Schiff, Warburg and Kahn. All of them, even the most recent, are of foreign origin. 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 National 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 present day. 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 syllable 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 departments 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. 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 & Company is Otto Herman Kahn, who is probably more international than were either of the two gentlemen mentioned above 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 Germany and is also a product of the Frankfort-on-the-Main school of finance, having had connection 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 announced 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 citizenships 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 afterwards succeeded, to put Paul M. Warburg, a member of the firm of Kuhn, Loeb & Company, on the Federal Reserve Board, Mr. Warburg testified that at that time Mr. Kahn was not a citizen of the United States. Senator Bristow—"How many of these partners are American citizens, or are they all American citizens . . . ." Mr. Warburg—"They are all American citizens except Mr. Kahn."—(p. 7, Senate Hearings, August 1, 1914.) Senator Bristow—"Now, the members of your firm, are they all American citizens except Mr. Kahn?" Mr. Warburg—"Except Mr. Kahn, yes." Senator Bristow—"Was Mr. Kahn ever an American Citizen?" 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 not?" 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 United States." Senator Bristow—"He was at one time a candidate, or a prospective candidate for Parliament, 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, August 3, 1914.) So, that if Mr. Kahn is a citizen of the United States now, which as a matter of fact has been disputed, then he has been a citizen of three countries, Germany and Great Britain being the other two. Mr. Kahn, by the way, is one of those Jews whose adoption of another form of faith brings no denunciation 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 Christianity, because he does not 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 it. Doubtless it was Mr. Kahn's desire, just at the time Jacob Schiff made his wishes known, to go to England 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 times 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 American Financial Hierarchy, which, of course, he is not. But he undoubtedly is the spokesmen of some group, possibly the group which so ably put through the Jewish program at the Peace Conference, the group that impressed Eastern Europe with the feeling that the United States of America was a very powerful Semitic empire. Mr. Kahn's trips abroad are usually unheralded, but their results richly repay observation. A fourth member of the Jewish financial group in America (which is the form of statement which Mr. Chaim Weizmann would sanction, rather than to say "Jewish-American financiers") is Mr. Paul Warburg, to whose testimony we have just alluded. Mr. Warburg is the most recent of all. He was born in Germany in 1868; he came to the United States in 1902; he became an American citizen in 1911. He came to the United States for the express purpose of reforming our financial system, and it is hardly possible to understand fully the system in operation today 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; another type is sufficiently 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 be manipulated. Perhaps it will be best to let him tell his own story 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 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 nominally "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 internationalism had not been so apparent. It was an interesting 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 of Samuel Montague & Company, and after that I took the opportunity of staying two months in the office of a stockbroker in order to learn that part of the business. "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 worked 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 time in 1893. I stayed here only a short time then, and went back to Hamburg, and then became a partner of the firm in Hamburg." The Chairman—"How long were you in Hamburg then in the banking business?" Mr. Warburg—"Until 1902 . . . . And then I moved over here to this country to become a partner of Kuhn, Loeb & Company." "I explained in the curriculum which I gave you, Mr. Chairman, that by marriage I am related to members of the firm, the late Mr. Loeb having been my father-in-law, which brought about a desire on the part of the family to bring me over here . . . . I ought to say that I got married in this country in 1895 and that I have been in this country every year since, for several months . . . . That is the history of my banking education." It will be recalled that Jacob H. Schiff also married a daughter of Mr. Loeb, so that Mr. Warburg married the sister of Mrs. Jacob H. Schiff. Felix Warburg, Paul's brother, who is also in the firm, married Mr. Schiff's daughter. Mr. Warburg immediately cast a critical eye upon the state of financial affairs in the United States and it is significant of the grasp he already had on such matters that he found the country rather behind the times. He conceived the ambition—the very daring ambition—of taking hold of the United States' monetary system and making it what he thought it ought to be. This alone would make him a remarkable man. It illustrates very well that detached point of view which the Jew is more fitted to take than any other man perhaps. He sees countries and systems with the same freedom from intimate bias with which another man would view assorted fish upon a market stall. Most of the world is engaged in doing its work and indulging its national, racial, domestic and social affections and inclinations; a small minority stands in the background and watches the entire mass at its unconscious maneuvers, and studies it as an observer studies a hive of bees. The man at work has no time except for his job. One man, standing back and studying 1,000 men at work, is able to see how he might utilize their labor or possess himself of a first toll on their production. Doubtless there must be men to stand at a sufficient distance from things to get a correct idea of their interrelationship, and doubtless such an attitude may be made of great service to the race, but doubtless it has also contributed to the selfish manipulation of natural and social processes. Mr. Warburg testified: "When I came here I was at once impressed by the lack of system, by the old-fashioned nature of the system that prevailed here; and I got immediately into one of those periods of high interest rates, where call money went up to 25 and 100 per cent; and I wrote an article on the subject then and there for my own benefit. "I was not here three weeks before I was trying to explain to myself the roots of the evil. I showed the article to a few friends but I kept it in my desk, because I did not want to be one of those who try to inform and educate the country after they have been here for a month or so; and I kept that article until the end of 1906, shortly before the panic, when those conditions arose again, and when one newspaper wanted for an issue at the end of the year an article dealing with the conditions in our country. "Then I took out that article and touched it up and brought it up to date; and that was the first article of mine that was published. It was called, 'Defects and Needs of Our Banking System.' . . . . "That was, however, the first time that I know of that the question of the discount system and the concentration of reserves was really brought out; and I got a great many encouraging letters asking me to go on and explain my ideas." Mr. Warburg was perfectly willing to talk to the committee about himself, but not about Kuhn, Loeb & Company, his firm. "I cannot discuss the affairs of my firm nor my partners," he said, "nor be asked to criticize acts of my partners, either to approve them or in any other way," but eventually he did tell a number of things which students of American financial affairs have considered interesting. Of which more later. On page 77 of the testimony, more personal matters appear: Senator Bristow—"When did you become a citizen of the United States, Mr. Warburg?" Mr. Warburg—"1911. Did I not answer that?" Senator Bristow—"Perhaps so. Did you intend to become a citizen when you came to the United States in 1902?" Mr. Warburg—"I had no definite intentions then, because some of the reasons that brought me over here were family reasons; . . . . That had a good deal to do with my first coming here; and I was not sure at all that I would stay here when I came." Senator Bristow—"When did you decide to become a citizen of the United States?" Mr. Warburg—"In 1908, when I took out my papers." Senator Bristow—"When you took out your first papers? You took out your second papers then, in 1911?" Mr. Warburg—"Yes." Senator Bristow—"You made your declaration in 1908; that is when you decided to become an American citizen?" Mr. Warburg—"Yes." Senator Bristow—"Why did you wait as long as you did after you came to this country, before deciding to become a citizen of this country?" Mr. Warburg—"I think that a man that does not come here as an immigrant; a man who has had, if you may call it such, a prominent position in his own country, will not give up his nationality so easily as a man who comes over here knowing that he does not care for his own country at all. I had been a very loyal citizen of my own country; and I think that a man who hesitates in giving up his own nationality and taking a new one, is apt to be more loyal to his new country when he does change his nationality than a man who gives up his old country more lightly." Senator Bristow—"Yes." Mr. Warburg—"I may add this: That a thing which had a great deal of influence on my making up my mind to remain in this country and work here, and become a part and parcel of this country, was that monetary reform work, for I felt I had a distinct duty to perform here; and I thought I could do that; and in fact I have been working on it since 1906 or 1907. "Then I felt that it was the right thing for me to become an American citizen and work here and throw in my lot definitely with this country." Senator Bristow—"When you became an American citizen; and the motive which induced you to become an American citizen was, then, as I understand it, largely with a view of laboring to bring about a reform of the American monetary system?" Mr. Warburg—"Well, you put it nearly exclusively on that. I think a man wants to feel that he is going to do some useful work in his country; that he has a mission to perform; and that is what happened to me . . . . Moreover, I had been long enough in this country then to have thoroughly taken root and feel that I was a part and parcel of it." Senator Bristow—"Yes. When did you first become active in promoting the monetary reforms in the United States?" Mr. Warburg—"1906." Senator Bristow—"What was your method of promoting your ideas with regard to monetary reforms?" Mr. Warburg—"Mainly writing." Senator Bristow—"Were you connected with the Monetary Commission?" Mr. Warburg—"No, not directly . . . ." Senator Bristow—"Were you consulted in regard to the report of the Monetary Commission in any way?" Mr. Warburg—"Yes, Senator Aldrich consulted with me about details, and I gave him my advice freely." Senator Bristow—"And in regard to the bill which was prepared by Senator Aldrich in connection with the commission, were you consulted in regard to that?" Mr. Warburg—"Yes." Senator Bristow—"What part did you have in the preparation of that bill, directly or indirectly?" Mr. Warburg—"Well, only that I gave the best advice that I could give." Most readers will recall that the name of "Aldrich" was, a few years ago, the synonym for the money power in government. Senator Aldrich was an able man and a tireless worker. His character for thoroughness and industry did more than anything else to disabuse the popular mind of the notion that such men were mere "tools of the money interest," or engaged in their work out of lust for gain, or out of sheer pleasure in legislating against the interests of the people. Senator Aldrich led on tariff and financial matters because he understood them; and he understood them by tireless study of them; and, therefore, he was the master of other men who had not paid the price of knowledge. But, he understood these matters from the standpoint of the business interests only. He was sincerely desirous of the prosperity of the country, but that prosperity was written in banking balances. Fifteen years ago it might not have been possible to judge him thus calmly, because then he represented in the public mind, more than any individual does today, the concentrated power of the financial group. Their prosperity was his first care, possibly because he believed that their prosperity was also the country's. It was such a man, then, that came to Mr. Warburg for advice. The labors of Senator Aldrich comprise many volumes of difficult material and Senator Aldrich's appeal to Mr. Warburg was a very high compliment to the quality of the latter's mind and financial experience—this, of course, assuming that Mr. Warburg's counsel was not forced upon the Aldrich committee by the New York money interests. In his testimony, Mr. Warburg did not tell all. The omission, however, was supplied by an article in Leslie's Weekly in 1916, the author being B. C. Forbes. It is a story of which Current Opinion said: "It reads like the opening in a shilling shocker." It appears that the conferences between Mr. Warburg and Senator Aldrich took place on an isolated island off the coast of Georgia—Jekyl Island. Included in the party, besides Senator Aldrich and Mr. Warburg, were two New York bankers and the then Assistant Treasurer of the United States. The mysteriousness of it all was well brought out by Mr. Forbes: "Picture a party of the nation's greatest bankers stealing out of New York on a private railroad car under cover of darkness, stealthily hieing hundreds of miles south, embarking on a mysterious launch, sneaking out to an island deserted by all but a few servants, living there a full week under such rigid secrecy that the name of not one of them was once mentioned lest the servitors learn their identity and disclose to the world this strangest, most secret episode in the history of American finance. "The utmost secrecy was enjoined upon all. The public must not glean a hint of what was to be done. Senator Aldrich notified each one to go quietly into a private car which the railroad had received orders to draw up at an unfrequented platform. Drawn blinds balked any peering eyes that might be around. Off the party set. New York's ubiquitous reporters had been foiled. So far so good. After bowling along the railroad hour after hour into southern country, the order was given to prepare to disembark. "Stepping from the car when the station had been well cleared of travelers, the members of the expedition embarked in a small boat. Silence reigned, for the boatmen must not find out how distinguished were their passengers. "In due time they drew up at another deserted pier. They were at Jekyl Island, off Georgia. The island was entirely unpeopled save for half a dozen servants. "'The servants must under no circumstances learn who we are,' cautioned Senator Aldrich. "'What can we do to fool them?' asked another member of the group. The problem was discussed. "'I have it,' cried one. 'Let's all call each other by our first names. Don't ever let us mention our last names.' "It was so agreed. "The dignified veteran Senator Aldrich, king of Rhode Island and a power second to none in the United States Senate, became just 'Nelson'; . . . . and the quiet, scholarly member of the powerful international banking firm of Kuhn, Loeb & Company, became 'Paul.' "Nelson had meanwhile confided to Harry, Frank, Paul and Piatt that he was to keep them locked up on Jekyl Island, cut off from the rest of the world, until they had evolved and compiled a scientific currency system for the United States, a system that would embody all that was best in Europe, yet so modeled that it could serve a country measuring thousands where European countries measured only hundreds of miles." Mr. Forbes does not omit to write this further description of Mr. Warburg's condition at the time: "unable then to speak idiomatic English with perfect freedom and without an accent, an alien not naturalized." Mr. Forbes also wrote—"Here is a German-American, but the sort of one that makes the hyphen look like a badge of honor." That was in 1916. Hyphens went out of fashion, though not entirely out of use, soon after. Thus far the story of Paul Warburg. [THE DEARBORN INDEPENDENT, issue of 18 June 1921 |