Harvard’s Ferguson Spices Warburg Bio With Tantrums, Graphology
Siegmund Warburg, the uprooted German financier who rose to fame in postwar London, considered banking something more than a way to make money. To him, it was a calling, as job candidates learned fast.
What are you reading for pleasure? he would ask recruits for S.G. Warburg & Co. Literary taste was his touchstone, writes Niall Ferguson in “High Financier,” a weighty new biography of a man who personified relationship banking.
“If the answer was Balzac, Dickens, Eliot, Tolstoy or Trollope, the candidate was almost certain to be employed, since a fondness for 19th-century European literature was a sure sign in Warburg’s eyes that the precious ‘feu sacre’ burned within,” Ferguson writes.
Then the recruit had to pass a graphology test (in case the sacred fire was guttering, I suppose).
Warburg, who died in 1982, was no ordinary London banker of the day. He was an outsider, the scion of a Jewish financial dynasty, a man forced to flee his homeland after his political ambitions were smashed by the rise of Adolf Hitler. Though he wore Savile Row suits, he became a banker “faute de mieux,” for want of anything better, Ferguson says.
What interested him most were human relations, he once said. His engagement with the world was never limited to financial transactions.
As Hitler’s conquests began, Warburg offered his services to the British government, gathering intelligence during wartime trips to France, Switzerland, Belgium and the Netherlands. (Expect a massive attack through the Low Countries, his sources said.) When peace came, Warburg helped advance Germany’s political and economic rehabilitation.
In the 1950s, he orchestrated Britain’s first hostile takeover bid. In the ‘60s, he acted as an economic adviser to U.K. Prime Minister Harold Wilson and pressed to deepen European integration.
Ferguson, a prolific author who teaches financial history at Harvard University, spent a dozen years, off and on, researching and writing “High Financier.” It’s the first study, he says, to be grounded in Warburg’s vast collection of private papers and other archival materials -- thousands of letters, memoranda and diary entries.
The result, weighing in at about 550 pages, is a serious work of history. More academic than novelistic, it can grow ponderous in places, though Ferguson’s muscular cadences impel the reader forward through a convincing portrait of a man who left his mark on London, the U.K. and Europe.
Warburg, an ascetic, was appalled when he first went to the City as an apprentice. It was 1926, and the bank resembled a gentlemen’s club populated with P.G. Wodehouse characters, Ferguson writes. He returned to stay in the 1930s, when the Warburg family bank in Hamburg was Aryanized.
After the war, London was all but dead as a financial center, Ferguson says. Warburg helped revive it, most notably through his work in pioneering Eurobonds (debt denominated in a currency differing from that of the country where it’s issued). Step by step, Ferguson shows how Warburg promoted the market as a means for deepening European economic integration.
This is not, granted, as much fun as reading about Warburg’s bilingual tantrums, hurled telephones and obsessive perfectionism. One worker remembers Warburg calling on Christmas Day to point out a missing comma after one word in the fifth paragraph of a three-day-old note on the U.S. stock market.
Villain or Hero?
The workaholic Warburg became a force to be reckoned with in the late 1950s, when he orchestrated what is considered the U.K.’s first hostile takeover. The bid for British Aluminium jolted the City, and the drama cast Warburg as either a duplicitous villain or a revolutionary hero, depending on your perspective. Either way, S.G. Warburg had arrived; corporate raiders knew where to turn.
Before long, the outsider became an insider. Warburg served as a confidant to Labour’s Wilson, pressing him, in vain, to avert the devaluation of the pound that came in 1967 and the descent into stagflation in the 1970s.
Warburg fancied himself a financial physician: Ailing industries could be healed through mergers and acquisitions. Yet Ferguson is clear-eyed in recognizing that the industrial combinations bankers promoted -- remember British Leyland? -- failed to restore the patients to profitability. Competitors in continental Europe underwent less consolidation and performed better.
As then, so today: Bankers often flourish as the economy founders.
Before agreeing to cooperate with Ferguson on the biography, Warburg’s trustees had his handwriting analyzed. The assessment was all too accurate, he says.
“Obviously,” the graphologist concluded, “his fragile and vulnerable emotional structure is not without unresolved conflicts and emotional baggage.”
Sounds like a hero from a 19th-century novel. No wonder the family gave him access.
(James Pressley writes for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.)
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