Niall Ferguson's "High Financier: The Lives and Time of Siegmund Warburg"

By T.J. Stiles
Sunday, July 11, 2010


The Lives and Time of

Siegmund Warburg

By Niall Ferguson

Penguin Press. 548 pp. $35

There's a saying in publishing that the only brand is the author. Unquestionably Niall Ferguson is a brand, thanks to sweeping, Big Picture, Big Idea books such as "Colossus" and "The Ascent of Money." With Ferguson, we expect provocative interpretations of epochs, empires and civilizations.

Not this time. In "High Financier," Ferguson follows a solitary capitalist into the weeds and flowers of his financial garden. This is no failing, of course; biography is simply a different enterprise. Rather than overarching, it often must be minute and particular. And Siegmund Warburg was extremely particular.

If Warburg's name seems unfamiliar, that is partly by design. He operated largely behind closed doors, which he latched, locked and bolted. As one of London's leading merchant bankers (what Americans commonly call investment bankers), he saw himself primarily as an adviser to corporate clients and policymakers. He was exceptionally discreet. His opinion of an American partner soured after Warburg saw the Yank eating peanuts at a cocktail party a little too eagerly -- behavior well outside of Warburg's strict code of conduct.

Not that Warburg was meek: Henry Kissinger said that he "was an easy person to get along with if you just said 'yes.' " Kissinger's words suggest the scope of Warburg's influence, in politics as well as banking. Ferguson calls Warburg a prophet of globalization and argues that he did more than anyone else to restore London's leadership in international finance after World War II. Yet Warburg's mere survival, let alone triumph, was little short of miraculous.

As Ron Chernow chronicled in "The Warburgs," Siegmund belonged to an illustrious Jewish family based in Hamburg. Merchant banking had been its business since 1798; the flagship firm, M. M. Warburg, achieved great heights under Max Warburg, who recruited his 18-year-old cousin Siegmund in 1920. Young Warburg, having endured World War I and an attempted socialist revolution, now faced hyperinflation. Small wonder he developed a lifelong aversion to risk.

Then came the darkness. After Hitler took power, Ferguson writes, Warburg briefly (if astonishingly) mused that the Nazis might do some good. He came to his senses and fled to London. "Uncle" Max hung on for almost too long, helplessly watching Aryanization strip him of his firm.

Siegmund's choice of London seems curious, given his family connections in New York. When he organized a new house in the bomb-scoured square mile of the City, the financial district, he faced the public-school anti-Semitism of British banking. "He is an international Jew to whom no bounds of country . . . are known," wrote a Bank of England officer in 1953. "He employs Jews in his many operations which have often been askance to the Authorities."

Despite this hostility -- not to mention economic devastation and an avowedly socialist Labour government -- Warburg prospered. He organized a groundbreaking hostile takeover of British Aluminium in the late 1950s, and he largely created the Eurobond market. A clever device for circumventing currency controls, Eurobonds served to politically integrate the continent. With success (and discretion) came acceptance and influence. When he spoke, presidents, prime ministers and Henry Kissinger listened. Yet after he died in 1982, his firm abandoned his caution, over-expanded and was taken over in 1995. It all sounds uncomfortably familiar.

Ferguson brings great authority to this account. Every page demonstrates his deep research in vast, newly opened archives. He crisply sketches Warburg's perfectionism, cultural life and exacting vision of high finance, situating him precisely in the hurricane history of 20th-century Europe.

At times, though, the very mass of Ferguson's expertise and research weighs upon his writing. I was surprised by his confidence in readers' historical and financial knowledge; I doubt he helps many by placing an event "at the time of the financial wrangles that helped topple Prince B├╝low from the Reich chancellorship." The bounty of manuscripts occasionally leads to overindulgence, with a narrow focus on Warburg's views, not their impact. Ferguson refers to "a highly critical memorandum," for example, without telling us who, if anyone, read it.

The subtitle speaks of Warburg's "lives." To me, this suggests conflicting pursuits or radical changes -- say, Arnold Schwarzenegger's leap from bodybuilder to movie star to governor. But Warburg played many roles simultaneously -- financier, policy adviser and Zionist (among others) -- and all reflected a coherent personality and career. Unfortunately, Ferguson splinters them into separate chapters and relegates Warburg's peculiar faith in handwriting analysis (which he relied on in hiring) to a postscript. As IKEA does with its furniture, he has disassembled Warburg's life and handed over the pieces, asking the reader to put them back together.

Ferguson is a talented writer, capable of grace and insight, but it is his ability as a historian that shows most strongly in "High Financier." It illuminates a critical aspect of European history and shows that Warburg, though flawed, was one banker worthy of respect.

T.J. Stiles is the author of "The First Tycoon: The Epic Life of Cornelius Vanderbilt," which won the 2010 Pulitzer Prize for biography and the 2009 National Book Award for nonfiction.

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