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High Financier: The Lives and Time of Siegmund Warburg

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Ferguson's biography of Siegmund Warburg will be of strong interest for readers who find financial news interesting and are looking for a broader perspective on the geopolitics of finance, in particular Britain and the European bond market. It will surely be of less interest to general readers, especially American readers, than some of Ferguson's writings on more contemporary issues, and frankly would not be selling so well were the author someone other than Mr. Ferguson.

"High Financier" can be divided into three parts based on the word "Lives" in the subtitle. The first "life" of Siegmund Warburg was his German one, from 1902-1933, covered in the first 90 pages of the book. His second "life" was his "Anglo-American" life - this runs from 1934 through the 1950s, or about page 200 in the book. The focus here is on Warburg's efforts at increasing transatlantic financial ties. The remainder of the book, slightly more than half, includes his "Anglo-German" life, or his work from the 1950s through his death in 1982 which primarily focused on European integration.

That first part will be of most interest to readers interested in German history and the interwar period. One intriguing point is what Ferguson describes as Warburg's ambivalent feelings toward the Nazi rise to power. As an educated German Jew he was of course repelled by their anti-Semitism and thuggish manner. Yet Warburg's diary and correspondence show that elements of the Nazi program appealed to him. This appears to be because as a life-long man of the political left, Warburg felt a strong attraction to collectivist policy and hostility for the decadence of the bourgeoisie, and thus hoped a coalition government including them might do some good. Ferguson's point is that if even someone like Warburg could fail to understand the Nazis' true nature until 1934, we should be more understanding of people in other countries who took even longer.

Ferguson goes to some effort to portray Warburg as an active opponent of the Nazis once he fully realized the threat, but he tries too hard. He claims Warburg to have been "an ardent opponent of the policy of appeasement," but cites no public anti-Hitler statements prior to 1939. All of the footnotes cite his diary and private correspondence. Indeed, during the 1934-1939 period Warburg traveled to Germany regularly for business, and was never bothered by the regime. All his family had left the country except two uncles who had chosen to stay to maintain the family business. Maybe it was because he didn't become a British citizen until 1939, or maybe he was concerned about his uncles. But despite all the talk about "spiritual values," it is hard not to suspect that Warburg's life priorities were no different than those of any other banker.

In regard to Warburg's "Anglo-American" life, he spent some time in the U.S. at a young age in the late 1920s, before the crash, and with part of the Warburg family firmly established in New York. He considered first going there, but after moving to London in 1934 he was heavily involved in cross-Atlantic finance before his focus moved back toward the continent.

Warburg's third life, taking up just over half the book, is his Anglo-German life. I say that - and this is a term Ferguson uses himself - because while living in the UK is business focused primarily on European finance and the need for greater integration. Whether Warburg was as important as Ferguson claims, I don't know enough about British financial history 1945-1980 to judge. But he portrays Warburg as the father of the hostile takeover in Britain, and as key to the rise of the Eurobond market and to London's revival as a financial center generally.

Warburg does seem to have been a master of business management. Ferguson devotes significant space to Warburg correspondence on the principles of a banker's work and good management practices. I won't go into that here, but readers interested in business philosophy may find these segments fruitful.

Warburg was also a strategic visionary. Ferguson consistently portrays him as being ahead of his contemporaries when it comes to business and finance. But he also presents him as being farsighted in geo-strategic terms, foreseeing the synthesis of Kennan's containment and Kissinger's détente. In 1954 Warburg wrote that the keys to victory were "building up the strength of the Western allies, second, raising the standard of living in the East (particularly in South-East Asia), and third, by a relaxation of tension..."

As I wrote in a review of one of Professor Ferguson's other works, I believe it impossible for him to write a boring book. But he's given it a good shot here. Recognizing that Warburg was a financial pioneer in many respects, author of the first British hostile takeover, the progenitor of the Eurobond, and the man generally credited with restoring the City of London to its pre-World War II stature as an international financial center, he is also a surpassingly uninteresting subject for a lengthy biography. As colorless as his custom-made business clothing, as indifferent to his wife and children as he was to any activity, except reading, not directly related to his financial endeavors, the Professor's very best efforts to highlight, or, indeed, winkle out, his human side are largely unavailing. True, he held himself and his firm's underlings to the highest business standards, and the book's extensive discussions of the intramural squabbles and power plays within his London and other offices make for some interesting reading for those of us intrigued by management politics. Also intriguing in this regard, though not perhaps a business practice to be emulated, was his tendency to make enduring snap judgments about managerial prospects, once forming an instant skepticism about a candidate who consumed too many peanuts at a cocktail party! True, too, that he was widely read, at least in German authors, and applied the teachings of Freud and others to his daily and business lives. Also true that among his quirky beliefs was an unshakeable confidence in graphology, that is, personality assessment using hand writing samples. But that's about it. Not only would you probably not want him for a friend, but you'd never get to that issue because he almost certainly would not want you. Perhaps most ironically, he neither amassed a great fortune himself nor succeeded in making his firm the top player in the City's financial hierarchy.

Having said all that, I certainly did learn something about the business and national financial events of the period covered and this will undoubtedly come in handy in other readings. But learning about financial history is usually a bloodless endeavor, and the Professor's choice of this subject as a biographical vessel for an account of the times only reinforces that perception. Got the rest: the `why' eludes me.

I worked for Siegmund Warburg and his firm. He was a great financier and a classicist as well. He took books with him on vacation and read and reread them. He lived on Eaton Square in London and his firm was at 30 Gresham St.
He revitalized London as a banking center after the war and orchestrated the takeover of British Aluminum, first hostile takeover in Britain. His partners were concerned since it flew in the face of City practice. However it resulted in a great deal of new business for the firm. Though I don't rememember it being in the book, he alway insisted on turquoise ink for signing his letters.

The book recounts Sir Siegmund's interest in graphology. I had to write an essay to be hired which presumably was sent to his graphologist.

He originated the eurobond market which helped make London a financial center.

It is a fascinating biography about a extraordinary man.

Like James McGrath Morris' recent expansive biography on journalist Joseph Pulitzer, former Oxford and now Harvard professor Niall Ferguson's well timed portrait of Siegmund Warburg comes as a result of the author's decade long research and discovery, both through heirs and institutions, of some 10,000 heretofore never released documents and notes about one of Britain's most preeminent financiers.

Ferguson's portrayal of this 'scion of one of the great German-Jewish banking dynasties' reveals a man of high moral turpitude who after his early upbringings and dominant family life in pre-Nazi Germany, expatriated to England to emerge as one of the leading exemplars of economic stability in post-war, post-depression, Britain. In this 548 page volume - complete with archival tree, graphology and extensive notes - Ferguson reveals Warburg to be both mercurial yet oft-times benevolent, moralistic yet powerful, as well as a macro-thinker and part-time psychologist in dealing with the financial affairs of the mid-century British industrial empire and the further concept of European economic integration.

Warburg's issues in British post-war economic society come exceedingly close to many of the issues of the U.S. domestic economy post-Wall Street meltdown of recent years. For example, after his steerage of the floundering British Aluminum industry via a hostile takeover from Reynolds, Warburg attempted to turn the beleaguered British automotive industry into a free market success, centered around the British-Leyland merger (despite the reversal through both nationalization as well as the eventual sale to foreign owners (Ford) of the revered brands Jaguar, Rover and MG). Next, Warburg found himself being asked to play a lead role in preventing the monopolization of the unstable newspaper business of Fleet Street. Both scenarios have obvious parallels with profoundly similar issues today.

Through it all, Warburg stood not as a person of unusual personality or extreme idiosyncrasies, but as a man of great scope, knowledge and principle; always looking at the big picture and its effect on the economic, and thus political, outlook for Britain and the further European continent. Warburg and his board were weary of speculators and hustlers who were often attempting to corrupt the commerce and private economic system for their own gain; a historical lesson that could prove useful for the investment banking industry on Wall Street today.

With his breakthrough books, including last year's `The Ascent of Money,' Ferguson is well on his way (along with Ron Chernow) to becoming one of the most authoritative economic history writers of our times. It will be curious to see what his next subject is (rumored to be either Henry Kissinger or another work on the Rothschilds) and where that places him along this continuum.

You can read more on finance and economics from Niall Ferguson here.

Sir Siegmund Warburg was a seminal figure in the renaissance of post-war UK finance. He was a pioneer of the Euro-Yen market and one of the last great "relationship" bankers. As a young banker at Warburg Paribas Becker in New York, I was heavily influenced by his approach to working with clients and colleagues. Many of my closest friendships today are the result of relationships formed while working at the firm which bore his name. He cautioned all of his colleagues to be careful with their personal reputations, because "Trust Capital" was the hardest to replenish.

Ferguson's book may draw a smaller audience in the U.S. because Sir Siegmund's reputation is less well-know here. Nevertheless the lessons to be drawn from Sir Siegmund's efforts are as relevant today as they were when he was teaching them by example 50 years ago.

Niall Ferguson has produced another masterpiece. I was drawn to his work a couple years ago after listening to him on Bloomberg Surveillance and Bloomberg on the Economy and I have benefited greatly from it. As with all his other books this book is highly detailed, well-referenced, and well-written. This book is about the various lives of (the title is not a typo) a fascinating man who would come to revolutionize banking in London, however he was much more than just a banker.

Siegmund Warburg was born in Germany in the beginning of the 20th century he lived through WWI and was in the early portion of his career as a banker as Hitler took power. Shortly after he would emigrate to Britain fearing persecution by the Nazis (he was Jewish) and start a small firm that would blossom into the great S. G. Warburg and Sons. This upbringing would go on to shape Warburg into a giant of Haute Banque (High Finance). Focused more on doing the right thing than on making money Warburg would help to cure Britain of its post-WWII sclerosis and return the City of London to its former greatness.

Siegmund Warburg bemoaned the lack of morality and the reckless expansion that was occurring within his firm and throughout finance prior to his death, something that ironically led to the demise of his firm following his death. Despite the fact that Warburg is no longer a household name in finance, his innovations and are still present today in the world of banking. These include a transformation of banking culture from an elitist country club mentality to the hyper-competitive world we know of today. He also helped to create the Euro-dollar and bond markets, and was one of the initial players in M&A raids prior to the boom of the 1970s and 1980s. Despite his vast influence that is present today that today the essence of Warburg has been lost, a sense of purpose. Warburg was not just about the money, instead attempting to reshape society in his own image. For example he tried to remove incompetent leaders from struggling companies in Britain; to free Britain from the Statist remnants its post-WWII affair with socialism; and to create a globalized financial market beyond politics that served the interests of the world.

Ferguson has done a brilliant job bringing the story of a relatively unknown figure in banking into the discussion of the history of modern banking over the 12 years it took for him to write this book. I look forward to reading more of his work in the future.

I consider this book an excelent complement of both books about Roschilds. Ferguson has a nice pen to describe economic and politics issues since a point of view of bankers. He describe their feelings in a realistic mode.

This panoramic biography of Siegmund Warburg reveals a complex man who built international banking in response to the great turbulence of the 20th century. Given access to previously unavailable personal letters and diaries, Niall Ferguson, a history professor at Harvard, spent 12 years profiling this singular man, who was shaped by early-20th-century Prussian Europe and lived through World War I, the rise of Nazism, the dark years of the Holocaust and post-World War II reconstruction. The book's title aptly describes Warburg's "lives," since he reinvented himself in the face of world and personal events. Ferguson artfully weaves Warburg's motives, business environment and family intrigues into the political evolution of Western Europe and the US. getAbstract highly recommends this detailed, readable biography of an extraordinary man.

Warburg's colleagues seem to have stepped from the pages of P. G. Woodhouse "This, my boy, is the best club in London. We really ought to be paying a subscription instead of receiving a salary". So Niall Ferguson tells us in "High Financier" but unfortunately relates neither a feel for the City, insight into what the firm did, nor why Siegmund Warburg was successful whereas others were not.

The exception is the so-called 1957-58 Aluminium War, Britain's first ever hostile takeover where the controlling shareholding in a public company was acquired on the open market ousting the company's management and board. The American acquisition of British Aluminium dealt a decisive blow to the unhurried gentlemanly London style of business with Warburg and his firm as the David and the rest of the City as Goliath. "Old citadels tumbled, traditional strongholds were invaded, new thought was devoted to City problems...". A lesser exception is the rise of the Eurodollar and Eurobond markets in the 1960's. The author states "If anyone could claim to be the father of the Eurobond market it was Siegmund Warburg".

That leaves an extended glimpse down memory lane, of the politics, wars, Israel and Warburg's dated advice on company management. This includes Warburg's quaint faith in graphology - the analysis of handwriting - in staff selection.

Obviously, a reader already knowing of or about Warburg would have an advantage especially in the absence of financial results and other data. For instance we are only told he was not a tall man, one contemporary found him `quite short'. Then again the author can only give us what is known. Perhaps, more background information about the financial City of London in this period would have added a context to the book.

I feel an acute ambivalence toward Niall Ferguson's work: if his name is on the byline of a column in the FT or the Wall Street Journal, I will gladly read it as he brings the "longue durée" perspective of history to the minutiae of current economic events. However, when it comes to his scholarly work, I have to will myself to read through to the end. You sometimes feel as if you were listening to him distractedly hurrying through a graduate seminar as he daydreams about his next appointment with Henry Kissinger.

In this biography of the unofficial founder of the postwar City of London and the creator of the Eurobond market, Ferguson has a clearly didactic ambition: to remind "a new generation of bankers of Siegmund Warburg's haute banque ideal -- financial service based on the primacy of the client relationship rather than the speculative transaction." This is a lofty, laudable, conscientious, and earnest (albeit slightly self-righteous) motivation. And he proceeds to do exactly that, thanks to unprecedented access to Warburg's personal papers, in a methodical, conscientious, scrupulous and at times (cringingly) obsequious way (the caption to one picture reads: "Siegmund as a boy: already happiest with book in hand"). However, he discharges his duty in such a bloodless fashion that you sometimes wonder if he was even more tortured by ennui than his reader. Is there any possibility that, as Ferguson intends, a purveyor of synthetic squared CDOs will peruse all of its pages and feel a tinge of shame or that a "Fabulous Fab" will have a Damascene conversion while traipsing through this grey tome? Fat chance.