Sidney Weinberg was born in 1891, one of eleven children of Pincus Weinberg, a struggling Polish-born liquor wholesaler and bootlegger in Brooklyn. Sidney was short, a “Kewpie doll,” as the New Yorker writer E. J. Kahn, Jr., described him, “in constant danger of being swallowed whole by executive-size chairs.” He pronounced his name “Wine-boig.” He left school at fifteen. He had scars on his back from knife fights in his preteen days, when he sold evening newspapers at the Hamilton Avenue terminus of the Manhattan-Brooklyn ferry.

Sidney Weinberg became a powerful banker by accentuating his humble origins. Illustration by Richard Thompson

At sixteen, he made a visit to Wall Street, keeping an eye out for a “nice-looking, tall building,” as he later recalled. He picked 43 Exchange Place, where he started at the top floor and worked his way down, asking at every office, “Want a boy?” By the end of the day, he had reached the third-floor offices of a small brokerage house. There were no openings. He returned to the brokerage house the next morning. He lied that he was told to come back, and bluffed himself into a job assisting the janitor, for three dollars a week. The small brokerage house was Goldman Sachs.

From that point, Charles Ellis tells us in a new book, “The Partnership: The Making of Goldman Sachs,” Weinberg’s rise was inexorable. Early on, he was asked to carry a flagpole on the trolley uptown to the Sachs family’s town house. The door was opened by Paul Sachs, the grandson of the firm’s founder, and Sachs took a shine to him. Weinberg was soon promoted to the mailroom, which he promptly reorganized. Sachs sent him to Browne’s Business College, in Brooklyn, to learn penmanship. By 1925, the firm had bought him a seat on the New York Stock Exchange. By 1927, he had made partner. By 1930, he was a senior partner, and for the next thirty-nine years—until his death, in 1969—Weinberg was Goldman Sachs, turning it from a floundering, mid-tier partnership into the premier investment bank in the world.

The rags-to-riches story—that staple of American biography—has over the years been given two very different interpretations. The nineteenth-century version stressed the value of compensating for disadvantage. If you wanted to end up on top, the thinking went, it was better to start at the bottom, because it was there that you learned the discipline and motivation essential for success. “New York merchants preferred to hire country boys, on the theory that they worked harder, and were more resolute, obedient, and cheerful than native New Yorkers,” Irvin G. Wyllie wrote in his 1954 study “The Self-Made Man in America.” Andrew Carnegie, whose personal history was the defining self-made-man narrative of the nineteenth century, insisted that there was an advantage to being “cradled, nursed and reared in the stimulating school of poverty.” According to Carnegie, “It is not from the sons of the millionaire or the noble that the world receives its teachers, its martyrs, its inventors, its statesmen, its poets, or even its men of affairs. It is from the cottage of the poor that all these spring.”

Today, that interpretation has been reversed. Success is seen as a matter of capitalizing on socioeconomic advantage, not compensating for disadvantage. The mechanisms of social mobility—scholarships, affirmative action, housing vouchers, Head Start—all involve attempts to convert the poor from chronic outsiders to insiders, to rescue them from what is assumed to be a hopeless state. Nowadays, we don’t learn from poverty, we escape from poverty, and a book like Ellis’s history of Goldman Sachs is an almost perfect case study of how we have come to believe social mobility operates. Six hundred pages of Ellis’s book are devoted to the modern-day Goldman, the firm that symbolized the golden era of Wall Street. From the boom years of the nineteen-eighties through the great banking bubble of the past decade, Goldman brought impeccably credentialled members of the cognitive and socioeconomic élite to Wall Street, where they conjured up fantastically complex deals and made enormous fortunes. The opening seventy-two pages of the book, however, the chapters covering the Sidney Weinberg years, seem as though they belong to a different era. The man who created what we know as Goldman Sachs was a poor, uneducated member of a despised minority—and his story is so remarkable that perhaps only Andrew Carnegie could make sense of it.

Weinberg was not a financial wizard. His gifts were social. In his heyday, Weinberg served as a director on thirty-one corporate boards. He averaged two hundred and fifty committee or board meetings a year, and when he was not in meetings he would often take a steam at the Hotel Biltmore’s Turkish baths with the likes of Robert Woodruff, of Coca-Cola, and Bernard Gimbel, of Gimbels. During the Depression, Weinberg served on Franklin Roosevelt’s Business Advisory and Planning Council, and F.D.R. dubbed him the Politician, for his skill at mediating among contentious parties. He spent the war years as the vice-chairman of the War Production Board, where he was known as the Body Snatcher, because of the way he persuaded promising young business executives to join the war effort. (Weinberg seems to have been the first to realize that signing up promising young executives for public service during the war was the surest way to sign them up as clients after the war.)

When Ford Motor Company decided to go public, in the mid-nineteen-fifties, in what remains one of the world’s biggest initial public offerings, both major parties in the hugely complicated transaction—the Ford family and the Ford Foundation—wanted Weinberg to represent them. He was Mr. Wall Street. “In his role as the power behind the throne,” E. J. Kahn wrote in a New Yorker Profile of Weinberg, fifty years ago, “he probably comes as close as Bernard Baruch to embodying the popular conception of Bernard Baruch.” Kahn went on:

There is hardly a prominent corporation executive of whom he cannot—and, indeed, does not—say, “He’s an intimate close personal friend of mine.” . . . Industrialists who want information about other industrialists automatically turn to Weinberg, much as merchants consult credit-rating agencies. His end of many telephone conversations consists of fragments like “Who? . . . Of course I know him. _In_timately. . . . Used to be Under-Secretary of the Treasury. . . . O.K., I’ll have him call you.”

This gregariousness is what we expect of the head of an investment bank. Wall Street—particularly the clubby Wall Street of the early and middle part of the twentieth century—was a relationship business: you got to do the stock offering for Continental Can because you knew the head of Continental Can. We further assume that businesses based on social ties reward cultural insiders. That’s one of the reasons we no longer think of poverty as being useful in the nineteenth-century sense; no matter how hard you work, or how disciplined you are, it is difficult to overcome the socially marginalizing effects of an impoverished background. In order to do the stock offering for Continental Can, you need to know the head of Continental Can, and in order to know the head of Continental Can it really helps to have been his classmate at Yale.

But Weinberg wasn’t Yale. He was P.S. 13. Nor did he try to pretend that he was an insider. He did the opposite. “You’ll have to make that plainer,” he would say. “I’m just a dumb, uneducated kid from Brooklyn.” He bought a modest house in Scarsdale in the nineteen-twenties, and lived there the rest of his life. He took the subway. He may have worked closely with the White House, but this was the Roosevelt White House, in the nineteen-thirties, at a time when none of the Old Guard on Wall Street were New Dealers. Weinberg would talk about his public school as if it were Princeton, and as a joke he would buy up Phi Beta Kappa keys from pawnshops and hand them out to visitors like party favors. His savvy was such that Roosevelt wanted to make him Ambassador to the Soviet Union, and his grasp of the intricacies of Wall Street was so shrewd that his phone never stopped ringing. But as often as he could he reminded his peers that he was from the other side of the tracks.

At one board meeting, Ellis writes, “a long presentation was being made that was overloaded with dull, detailed statistics. Number after number was read off. When the droning presenter finally paused for breath, Weinberg jumped up, waving his papers in mock triumph, to call out ‘Bingo!’ ” The immigrant’s best strategy, in the famous adage, is to think Yiddish and dress British. Weinberg thought British and dressed Yiddish.

Why did that strategy work? This is the great mystery of Weinberg’s career, and it’s hard to escape the conclusion that Carnegie was on to something: there are times when being an outsider is precisely what makes you a good insider. It’s not difficult to imagine, for example, that the head of Continental Can liked the fact that Weinberg was from nothing, in the same way that New York City employers preferred country boys to city boys. That C.E.O. dwelled in a world with lots of people who went to Yale and then to Wall Street; he knew that some of them were good at what they did and some of them were just well connected, and separating the able from the incompetent wasn’t always easy. Weinberg made it out of Brooklyn; how could he not be good?

Weinberg’s outsiderness also allowed him to play the classic “middleman minority” role. One of the reasons that the Parsi in India, the East Asians in Africa, the Chinese in Southeast Asia, and the Lebanese in the Caribbean, among others, have been so successful, sociologists argue, is that they are decoupled from the communities in which they operate. If you are a Malaysian in Malaysia, or a Kenyan in Kenya, or an African-American in Watts, and you want to run a grocery store, you start with a handicap: you have friends and relatives who want jobs, or discounts. You can’t deny credit or collect a debt from your neighbor, because he’s your neighbor, and your social and business lives are tied up together. As the anthropologist Brian Foster writes of commerce in Thailand:

A trader who was subject to the traditional social obligations and constraints would find it very difficult to run a viable business. If, for example, he were fully part of the village society and subject to the constraints of the society, he would be expected to be generous in the traditional way to those in need. It would be difficult for him to refuse credit, and it would not be possible to collect debts. . . . The inherent conflict of interest in a face-to-face market transaction would make proper etiquette impossible or would at least strain it severely, which is an important factor in Thai social relations.

The minority has none of those constraints. He’s free to keep social and financial considerations separate. He can call a bad debt a bad debt, or a bad customer a bad customer, without worrying about the social implications of his honesty.

Weinberg was decoupled from the business establishment in the same way, and that seems to have been a big part of what drew executives to him. The chairman of General Foods avowed, “Sidney is the only man I know who could ever say to me in the middle of a board meeting, as he did once, ‘I don’t think you’re very bright,’ and somehow give me the feeling that I’d been paid a compliment.” That Weinberg could make a rebuke seem like a compliment is testament to his charm. That he felt free to deliver the rebuke in the first place is testament to his sociological position. You can’t tell the chairman of General Foods that he’s an idiot if you were his classmate at Yale. But you can if you’re Pincus Weinberg’s son from Brooklyn. Truthtelling is easier from a position of cultural distance.

Here is Ellis on Weinberg, again:

Shortly after he was elected a director of General Electric, he was called upon by Philip D. Reed, GE’s chairman of the board, to address a group of company officials at a banquet at the Waldorf Astoria. In presenting Weinberg, Reed said . . . that he hoped Mr. Weinberg felt, as he felt, that GE was the greatest outfit in the greatest industry in the greatest country in the world. Weinberg got to his feet. “I’ll string along with your chairman about this being the greatest country,” he began. “And I guess I’ll even buy that part about the electrical industry. But as to GE’s being the greatest business in the field, why, I’m damned if I’ll commit myself until I’ve had a look-see.” Then he sat down to vigorous applause.

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At G.E., Weinberg’s irreverence was cherished. During the Second World War, a top Vichy official, Admiral Jean-François Darlan, visited the White House. Darlan was classic French military, imperious and entitled, and was thought to have Nazi sympathies. Protocol dictated that the Allies treat Darlan with civility, and everyone did—save for Weinberg. The outsider felt perfectly free to say what everyone else wanted to but could not, and in so doing surely endeared himself to the whole room. “When it was time to leave,” Ellis writes, “Weinberg reached into his pocket as he came to the front door, pulled out a quarter, and handed it to the resplendently uniformed admiral, saying, ‘Here, boy, get me a cab.’ ”