Paul Warburg

Paul Warburg

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Paul Moritz Warburg was a German-born American banker and early advocate of the U.S. Federal Reserve system.

Early life


Warburg was born in Hamburg
Hamburg
-History:The first historic name for the city was, according to Claudius Ptolemy's reports, Treva.But the city takes its modern name, Hamburg, from the first permanent building on the site, a castle whose construction was ordered by the Emperor Charlemagne in AD 808...

, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...

, to a successful Jewish banking family. His parents were Moritz and Charlotte (Esther) Warburg. After graduating from the Realgymnasium in Hamburg in 1886 he entered the employ of Simon Hauer, a Hamburg importer and exporter, to learn the fundamentals of business practice. He similarly worked for Samuel Montague & Company, bankers, in London in 1889-90, the Banque Russe pour le Commerce Etranger in Paris in 1890-91.

In 1891 Warburg entered the office of the family banking firm of M.M. Warburg & Company, which had been founded in 1798 by his great-grandfather. He interrupted work there to undertake a world tour during the winter of 1891-92. Warburg was admitted to a partnership in the family firm in 1895.

On October 1, 1895, Warburg was married in New York City to Nina J. Loeb, daughter of Solomon Loeb
Solomon Loeb
Solomon Loeb was a German American merchant in textiles and later a banker with Kuhn, Loeb & Co.. His father, a devout Jew, had been a small corn- and wine-dealer in Worms, which belonged to the Grand Duchy of Hesse and by Rhine. S. Loeb emigrated to the United States in 1849. He settled in...

, founder of the New York investment firm of Kuhn, Loeb & Company. The Warburgs were the parents of a son, James Paul Warburg, and a daughter, Dr. Bettina Warburg.

Career


Although a major factor in German finance, after frequent business trips to New York Warburg settled there in 1902 as a partner in Kuhn, Loeb & Company where the influential Jacob Schiff, his wife's brother-in-law, was senior partner. Warburg remained a partner in the family firm in Hamburg, but he became a naturalized American citizen in 1911. He was a member of Temple Emanu-El in New York City.[5][6]

Warburg was elected a director of Wells Fargo & Company in February 1910. He resigned in September 1914 following his appointment to the Federal Reserve Board, and Jacob Schiff was elected to his seat on the Wells Fargo board.[7]

Paul Warburg became known as a persuasive advocate of central banking in America, in 1907 publishing the pamphlets "Defects and Needs of Our Banking System" and "A Plan for A Modified Central Bank". His efforts were successful in 1913 with the founding of the Federal Reserve System. He was appointed a member of the first Federal Reserve Board by President Woodrow Wilson, serving until 1918.

In 1919 he founded and became first chairman of the American Acceptance Council. He organized and became the first chairman of the International Acceptance Bank of New York in 1921. International Acceptance was acquired by the Bank of the Manhattan Company in 1929, with Warburg becoming chairman of the combined organization.

He became a director of the Council on Foreign Relations
Council on Foreign Relations
The Council on Foreign Relations is an American nonprofit nonpartisan membership organization, publisher, and think tank specializing in U.S. foreign policy and international affairs...

 at its founding in 1921, remaining on the board until his death. From 1921 to 1926 Warburg was a member of the advisory council of Federal Reserve Board, serving as president of the advisory council in 1924-26. He was also a trustee of the Institute of Economics, founded in 1922; when it was merged into the Brookings Institution in 1927, he became a trustee of the latter, serving until his death.

Warburg was notable on March 8, 1929, for warning of the disaster threatened by the wild stock speculation then rampant in the United States, engineering the crash which occurred in October of that year.

He encouraged German-American cultural cooperation, helping found the Carl Schurz Memorial Foundation in 1930 and serving as its treasurer from May 1930 until his death. He also made substantial contributions to the Warburg Library in Hamburg, founded by his family; gave to Heidelberg University one of its halls, known as the American House; and he made generous donations to the Academy of Political Science in Berlin.

Death


Paul Warburg died at his home in New York City on January 24, 1932 and was buried in Sleepy Hollow Cemetery
Sleepy Hollow Cemetery
Sleepy Hollow Cemetery in Sleepy Hollow, New York is the resting place of numerous famous figures, including Washington Irving, whose story "The Legend of Sleepy Hollow" is set in the adjacent Old Dutch Burying Ground. Incorporated in 1849 as Tarrytown Cemetery, it posthumously honored Irving's...

 in Sleepy Hollow, New York
Sleepy Hollow, New York
Sleepy Hollow is a village in the town of Mount Pleasant in Westchester County, New York, United States. It is located on the eastern bank of the Hudson River, about north of midtown Manhattan in New York City, and is served by the Philipse Manor stop on the Metro-North Hudson Line.Originally...

. At the time of his death he was chairman of the Manhattan Company and a director of the Bank of Manhattan Trust Company, Farmers Loan and Trust Company of New York, First National Bank of Boston, Baltimore & Ohio Railroad, Union Pacific Railroad, Los Angeles & Salt Lake Railroad, Western Union Telegraph Company, American I.G. Chemical Company, Agfa Ansco Corporation, and Warburg & Company of Amsterdam.

Legacy


The cartoon character, "Daddy" Oliver Warbucks in the Little Orphan Annie
Little Orphan Annie
Little Orphan Annie was a daily American comic strip created by Harold Gray and syndicated by Tribune Media Services. The strip took its name from the 1885 poem "Little Orphant Annie" by James Whitcomb Riley, and made its debut on August 5, 1924 in the New York Daily News...

series, was purportedly inspired by the life and times of Paul Warburg. The Paul M. Warburg chair in Economics at Harvard University
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...

 was named in his honour, a title which is currently held by Professor Robert J. Barro.

Family


His son James Warburg
James Warburg
James Paul Warburg was an American banker and financial adviser to Franklin D. Roosevelt. His father was Paul Warburg.- Biography :...

 (1896–1969) was a financial adviser to Franklin D. Roosevelt
Franklin D. Roosevelt
Franklin Delano Roosevelt , also known by his initials, FDR, was the 32nd President of the United States and a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war...

 in the first years of his presidency.

See also

  • Council on Foreign Relations
    Council on Foreign Relations
    The Council on Foreign Relations is an American nonprofit nonpartisan membership organization, publisher, and think tank specializing in U.S. foreign policy and international affairs...

  • History of central banking in the United States
    History of central banking in the United States
    This article is about the history of central banking in the United States, from the 1790s to the present.-Bank of North America:Some Founding Fathers were strongly opposed to the formation of a central banking system; the fact that England tried to place the colonies under the monetary control of...

  • Kuhn, Loeb & Co.
    Kuhn, Loeb & Co.
    Kuhn, Loeb & Co. was a bulge bracket, investment bank founded in 1867 by Abraham Kuhn and Solomon Loeb. Under the leadership of Jacob H. Schiff, it grew to be one of the most influential investment banks in the late 19th and early 20th centuries, financing America's expanding railways and growth...

  • UBS Warburg
  • Warburg
    Warburg (disambiguation)
    Warburg can refer to:Places* Warburg, a city in Germany** the Battle of Warburg* Warburg, Alberta, a village in CanadaPeople* the Warburg family, a family of bankers and philanthropists and one scholar...

  • Warburg family
    Warburg family
    The Warburg family is a financial dynasty of German Jewish origin, noted for their accomplishments in physics, classical music, art history, pharmacology, physiology, finance, private equity and philanthropy. They are believed to be descended from the Venetian Jewish del Banco family, in the early...


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