The Jews in America Trilogy (57 page)

It was at about this time that Adolph Lewisohn's daughter Adele, who had married Mayer Lehman's son Arthur, had her name inserted in the New York
Social Register
.

It began to seem as though the devout and pious Jewishness of Jacob Schiff had had a point. What would he have thought of these carryings on? With his philosophy of
Pflicht und Arbeit—
duty and work—he had been the conscience of the German Jewish crowd. But he was gone.

*
A copy hangs in the Metropolitan Museum of Art.

*
Whose tragic solution was to commit suicide, as his cousin, Washington Seligman, had done in 1912.

PART V

NEW YORK 21, N.Y.

44

THE END OF A LINE

J. & W. Seligman & Company, though it had been first eclipsed by Kuhn, Loeb and, next, by the Lehmans—to whom the Seligmans sold their building—still managed to produce moments of fiscal excitement. In 1910 Joseph Seligman's ancient rival, J. P. Morgan, was an old man who increasingly allowed others to make his decisions and handle his affairs, and one of these was George W. Perkins, who laughed out loud when a “visionary nitwit” named Will Durant told him that there would one day be as many as fifty thousand automobiles on the roads of America. Shouting, “Impossible!” Perkins threw Durant out of the office. This was too bad for Morgan, because Durant lowered his sights a notch and approached the Seligmans.

Durant's burgeoning General Motors Corporation had already absorbed a number of individual companies—Buick, Oldsmobile, Cadillac, and some twenty others. But even the Seligmans, perhaps because they knew they had a Morgan reject, were initially wary. They agreed to take on Durant, but on staggeringly stiff terms. In return for underwriting $15 million worth of Durant's GM notes,
*
the bankers demanded that Durant put up
all
his company's assets as security, in addition to giving control of his board to the Seligman group. Durant
also wanted $2.5 million in cash, and for this the Seligmans made him put up $4 million worth of stock as security, and charged him 6 percent interest for five years. As an indication of how shaky a venture Durant's was considered to be, the lawyers who drew up the papers on the deal cut their normal fee to less than one-half, in order to get cash and not stock as their fee.

This was in 1910. Three years later, Albert Strauss, who, with his brother Frederick,
*
had been one of the first nonfamily Seligman partners and who had gone on the board of General Motors, was offered $30 a share for his General Motors common stock. Strauss declined to sell, and the Seligmans held on to theirs. By the war's end, in 1919, the original GM common was selling for $850 a share.

The House of Morgan's less than clairvoyant appraisal of the automotive industry is often given as the reason why the Ford Motor Company for so many years refused to go public. Motor stocks of the period were considered so speculative that “Only the Jewish banks will handle them,” and this would not have suited Henry Ford, Sr., a virulent anti-Semite. Nevertheless, the leading gentile banker, Morgan, would not see Ford. It was in the Dearborn, Michigan,
Independent
, which Ford controlled, that he caused to be published for the first time in America the
Protocols of the Learned Elders of Zion
, the spurious document purportedly prepared by an international conference of Jews and Freemasons, outlining their plans to take over the world. (A proven fake, it was traced to an anti-Semitic Russian writer in Kishinev at the time of the pogroms.) As a result of this, it was many years before most Jews would buy a Ford car.

And yet, after Henry Ford's death, it was a Jewish bank, Goldman, Sachs & Company, which first brought out Ford stock and, under the guiding genius of Sidney Weinberg, devised the intricate construction of the Ford Foundation. Today Weinberg is the chief financial adviser to Henry Ford II, and is on the board of directors of the Ford Motor Company. The ironies of high finance never cease. Where great money is to be made, much can be forgiven.

The individual members of the Seligman family, meanwhile, who had always referred to Mrs. Astor and
her
crowd as “the butterflies,” were beginning to display some oddly butterfly-like characteristics of their own. The men of the family seemed definitely to prefer being gentlemen of leisure to working, and a number of the ladies were devoting
themselves as assiduously as Mrs. Astor had to being hostesses. There was, for instance, Mrs. Henry Seligman, the wife of the original Jesse's son. Formerly Addie Walter, she was a double Seligman, having married, first, Joseph's son David, and, upon his death, his first cousin. All through the twenties her parties, in her houses in Elberon, Palm Beach, and in East Fifty-sixth Street, were celebrated. She had a butler, De Witt (not to be confused with De Witt Seligman, another cousin of her husband's), who she liked to say “set the standard for a whole generation” of German Jewish families. He was stationed at the foot of the stairs, and arriving guests learned to fear his look of icy disapproval. When Addie Seligman died—at the depth of the depression in 1934 and at the height of her entertaining career—her dinner plates alone, not including cups, saucers, or soup bowls, brought $2,660.92 at auction. De Witt, a millionaire from tips he had received from guests, retired.

But for all the good times, there were some members of the family who noticed some disturbing Seligman symptoms. Joseph's grandson, George Hellman, was alarmed at what was happening to the Seligman birth rate. At the procreative rate of the original David and Fanny Seligman—who produced eight sons and three daughters—there should have been, Mr. Hellman computed, some 1,536 Seligman boys in New York in his own generation. Yet the opposite was the case. Early Seligmans had the knack of producing mostly boys; later generations produced female children or none at all. The Seligman name, in barely three generations' time, was dying out.

It was a genetic fact that other families of the crowd were having to face. It was almost as though, as the families grew rich and the need to produce sons grew less acute, fewer sons were born.

Needless to say, the number of Seligman-named partners downtown at J. & W. Seligman & Company was diminishing at a similar rate. During the 1920's the firm's seat on the New York Stock Exchange was held in the name of Jefferson Seligman, the fruit-and-ginger and dresses-from-Klein's-distributing partner. At the time of the stock market crash of 1929, Jeff Seligman was there, doing his bit. According to one partner, “In October, 1929, when the panic was a day or two old, Jeff appeared on the floor of the Exchange for the first time in years. He hadn't done a stroke of work since anyone could remember. I don't think he executed any orders—he simply appeared, wearing a flower in the buttonhole of his Prince Albert One of the afternoon papers commented on the calming effect induced by the appearance of ‘the well-known international banker.'”

Calming effect or no, Jeff Seligman did nothing to improve the Seligman birth rate. He died in 1937 at the age of seventy-eight, leaving, according to Geoffrey T. Hellman, “a somewhat diminished estate, which consisted, in part, of a rather large remainder of ginger and Klein's dresses,” and without issue.

The Seligmans had become very family-conscious and family-proud and, at one point, hired a designer and a printer to prepare an elaborate
Seligman Family Register
. Bound and published in a limited edition of one hundred copies, it is printed on heavy vellum and contains the names of 255 people, plus portraits of the original eleven Seligman children from Baiersdorf. Through the
Register
, it is possible to trace the Seligman family's weblike interconnection with other families of the crowd—the Beers, Walters, Goodharts, Guggenheims, Lewisohns, Wassermanns, Nathans, Lilienthals, Lehmans, Wolffs, and Loebs. The Seligmans become the true anchor family of the crowd. It is possible to see how the Seligmans can—and do, with a reasonable degree of accuracy—get themselves connected with the royal House of Windsor, and be able to speak of “our cousin, Princess Margaret.” (“Do you suppose,” suggests one member of the crowd slyly, “that Princess Margaret ever speaks of ‘My cousins, the Seligmans'?”) The connection works this way: Isaac Seligman, in London, married, in 1869, a Miss Lina Messel. A later member of the Messel family was Sir Oliver Messel, who is related to a young man named Antony Armstrong-Jones, now Lord Snowden. The Seligmans could also boast a British knight of their very own, Isaac's son, who became Sir Charles Seligman.

But, for all its luster and what George Hellman somewhat wistfully calls the “slight haze of social prestige” that still clings to the Seligman name, it is presently the responsibility of just two small boys, both great-great-grandsons of Joseph, to see to it that it is carried on.

*
In cooperation with Lee, Higginson and the Central Trust Company.

*
No kin to the single-“s” Strauses.

45

THE FALL, AND AFTER

Felix Warburg's brother Paul had had an unhappy childhood, picked on by his older brothers Aby and Max, who called him ugly and weak. Even his mother seemed not to understand him. By the time he had reached young manhood, he had developed a distinct inferiority complex, and was forever apologizing for himself. He had a habit of prefacing his remarks with “You won't like what I'm going to say, but.…” Still, he was possibly the most brilliant and versatile of all the Warburgs and, for years, was a sort of itinerant Kuhn, Loeb partner, spending half of each year in New York and the other half with the Warburg bank in Germany, serving as a financial liaison between the two countries. He had always considered American banking primitive and haphazard. He had met secretly with Senator Nelson Aldrich at Sea Island, Georgia, and had worked out the Federal Reserve System, and yet when Aldrich tried to give Paul Warburg full credit, Paul, typically, refused to take any credit whatever. He was offered the post of Chairman of the Federal Reserve Board but, insisting that he was unworthy, refused any position higher than Vice Chairman. As anti-German feeling mounted during World War I, and as Kuhn, Loeb became the target of much of this, Paul felt it deeply. In 1918 he wrote to President Wilson saying, in his customary self-effacing way, that he felt
a naturalized citizen ought not to have such a high post with the Board. Secretly he hoped Wilson would not accept his offer to resign, but, to his discouragement and dismay, Wilson did. Even sadder, Paul Warburg returned to New York from Washington, and became chairman of the board of the Bank of Manhattan. In his spare time, he wrote a monumental history of the Federal Reserve System, and a number of sad, introspective poems.

He was, as it turned out, a Cassandra, and, since prophets of doom do not usually find a sympathetic audience, Paul Warburg was made even more unhappy. As the 1920's progressed, he began saying that the prosperity was false and could not last, that the bubble would burst. For this sort of talk, he was soon the most unpopular man on Wall Street. “Here comes old Gloomy Gus!” someone shouted in 1928, when Paul Warburg entered the Century Country Club, and he was booed at a directors' meeting. He went right on, though. Early in 1929 in an annual report of the International Acceptance Bank, Paul stated flatly that climbing prices of stocks were “in the majority of cases quite unrelated to respective increases in plant, property, or earning power,” and he also predicted that if “orgies of unrestrained speculation” were not curbed and controlled, “the ultimate collapse is certain not only to affect the speculators themselves but also to bring about a general depression involving the entire country.” There were more boos and hisses. This statement was issued in March. The “ultimate collapse” came barely six months later. How right Paul Warburg was need hardly be mentioned, but when he tried to say, “I told you so,” in 1930, he was even more enthusiastically disliked.

Meanwhile, there were other problems—disturbing political developments in Germany. Paul and Felix Warburg both felt that the future boded ill for Jewish banks in Germany, and wanted to liquidate M. M. Warburg & Company. But brother Max, head of the Hamburg house, was stubborn. He could, he insisted, “make a deal” with this man Hitler.

The great stock market crash of 1929 affected each banker differently, but those few who had taken Paul Warburg's advice found themselves considerably better off. One of these was Paul's brother-in-law, Morti Schiff. Poor Morti. For all his attempts to move with the International Set, most of his life had been spent squarely under his father's thumb. Now he was to have only a little over ten years of freedom. He died, suddenly, in 1931, after having a pleasant dinner with his daughter, Dorothy. Paul Warburg had warned Morti to “get out of the market” in 1929 and to put his funds into cash. When Morti's estate
was appraised, he was found to have left $28,718,213 in securities, plus property in France worth around a million dollars, a book, binding, painting, and furniture collection worth £153,427, and—thanks to Paul Warburg—$7,683,527 in cash. Between the time of the estate's appraisal and its distribution to his heirs, the value of Morti's securities dropped 54 percent. If it hadn't been for all that cash, things would have been difficult. As it was, Morti's heirs were very proud of him. For all Jacob Schiff's worries about Morti's extravagance, Morti had managed to put aside a tidy sum.

Goldman, Sachs was less fortunate in the crash. Under the influence of optimistic Waddill Catchings, the firm had, in 1928, somewhat belatedly decided to get into the investment-trust field—in which a banking house formed a trust, made investments, sold shares to the public, and hopefully kept a fat share for itself. Catchings' idea was to form the Goldman, Sachs Trading Corporation, capitalized at $100 million, and to sell go percent of its shares to the public, keeping 10 percent for itself. The firm then merged this interest with the Financial and Industrial Corporation, which in turn had stock control of the Manufacturers Trust Company. All this might have put Goldman, Sachs in an enviable position if it had been done in 1923 instead of 1928. As it was, the interfacings were so complicated that it took ten years of legal wrangling to straighten out who owed what and to whom after the crash. Catchings, meanwhile, had withdrawn from the firm and had gone to California to be a radio producer.