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What Baruch Was in War Material, Paul Warburg Was in War

Finance; Some Curious Revelations of Money and Politics

THF last view the reader had of Paul M. Warburg

in the preceding article was as "an alien not

naturalized" secretly closeted with Senator Nelson

W Aldnch and a party of bankers on an obscure island

off the southeastern coast of the United States, all the

member of the party concealing their identity even

from the servants by calling each other by their first

names.

That conference in its ultimate results was of the

utmost importance to the United States, for then and

there were formulated those fiscal devices, those finan

cial method, those "monetary reforms" which have

exerted an influence on every citizen, rich and poor, of

the Republic.

Much history was made in that little trip. It ir

resistibly calls to memory that other trip made in 1915

almost two years before America's entry into the war

bv Bernard M Baruch. As readers of The Dearborn

Imffmnn oi November 27. MO, will recall. Mr.

Baruch had been financial backer of the Plattsburg

camp, and in his te-timny he said he thought that

General Wood would admit this. Then "I went off on

a long trip, and it was while on this trip that I felt

there ought to be some mobilization of the industries,

and I was thinking about the scheme that practically

was put into effect and was working when I was chair

man of the board. When I came back from that trip

I asked for an interview with the President .... The

President listened very attentively and graciously as

he ilwayi tfoe." Mr. Baruch was an authority on the

Hi Mill nt'l demeanor, for there was a long period in

191 and 1918 during which he called at the White

House every afternoon.

Baruch a Parallel of Warburg

TWO momentous trips in our recent history, both of

them signalized and given their principal meaning

bv the presence of Jews. Not that there should not

have been Jews in either case ; to insist upon their total

exclusion would be going too far. The Jew as a cit

izen, bearing his part, is one matter: the Jew as a

master, directing the national show, is quite another

thing. It is by no means agreed that Barney Baruch

was the onlv man in the United States who could have

run this nations war business. That is the explanation

made of the high place he took that he was the only

man who could do it. Nonsense! If that be so. let

us close up the nation and hand the keys over to the

New York Kehillah. Mr. Baruch could say "I prob

ably had more power than any other man did in the

war : doubtless that is true," but he had that power be

cause he was for the time the head and front of the

Jewish group for war purposes.

If the explanation of Jewish mastery at critical mo

ments were drains." well and good, but if it were, it

would be more evident to the people; brains do not

need to be advertised, they advertise themselves. There

is another reason.

The British public recently awoke to the fact that

not Lloyd George but Mr. Montagu and Sir Alfred

Mond were in charge of the recent negotiations over

the German indemnities. These gentlemen are both

Jews, one of them of German descent. Of all the Brit

ish Empire are they the only two men to advise the

premier in a great crisis? If they are, why is it? The

Montagus, we know, control the silver of the world;

Sir Alfred Mond, we know, turned the very neat trick

of keeping the sign of the Cross off the war memorials

raised to the soldiers of the empire; their Jewishness

always so apparent. Both financiers; both the close

advisers of the premier; as Baruch to Wilson, so they

to Lloyd George.

"Warburg Created the Federal Reserve

APPARENTLY there are no Anglo-Saxons on either

side of the sea capable of managing these deep mat

ters, if we are to judge from the war administrations

those that have passed off the stage and those that still

linger. Lloyd George, for once stung to the quick by the

criticism of the British public of his tendency to closet

himself with Jews when confronted with a crucial

question, retorted bitterly with what? With the old

outworn Jewish propagandist boast, that it ill became

people who sang Jewish psalms in church to rag the

race that wrote them! A most illuminating defense!

The world would give a good deal for a true psalm from

Sir Alfred Mond, Mr. Montagu, or even Sir Philip

SailfffTW who is soon to become the premier's son-in-law.

In our own history. Barney Baruch boldly claims

his place, he unhesitatingly asserts that he had more

power than any man in the war. If Allenby in Pal

estine needed a locomotive, if the Americans in Russia

VOLUME two of this series of Jew

ish Studies it now off the press.

It is entitled "Jewish Activities in the

United States," being the second vol

ume of "The International Jew,"

twenty-two articles, 256 pages. Sent

to any address at the cost of printing

and mailing, which is 25 cents.

needed clothing, if the munition mills needed copper

it was Baruch who gave or withheld the word.

Mr. Warburg, being of somewhat finer grain, prob

ably due to his having less than Mr. Baruch of the

rough experience of "the Street." does not make the

claim that he is the chief factor in the present monetary

-ystem of the United States, nor docs The Dearborn

Independent undertake to make it for him lest the

cry of "anti-Semitism" wax wrathful again: but for

tunately the fact is amply attested by a Jew whose

knowledge of the matter is unquestionable.

Readers have doubtless become aware by this time

that for a non-Jew to say that a certain Jew is a most

important factor in any field is to be guilty of anti

Semitism, while for a Jew or a "Gentile front" to say

it is perfectly proper. It is a rather odd etiquette in

which simple minds sometimes become confused.

Professor E. R. A. Seligman, of Columbia Uni

versity, is the sponsor of this great honor for Mr.

Warburg. What Professor Seligman says is of such

importance, both as to its source and its subject, that

quotation is justified: (the italics in all cases are ours)

"It is in a general way known to the public that

Mr. Warburg was in some way connected with the

passage of the Federal Reserve Act, and his appoint

ment to his present responsible position on the Federal

Reserve Board was acclaimed on all sides with a rare

degree of approval and congratulation ; but I fancy it is

kmOWM only to a very few how great is the indebtedness

of the United States to Mr Warburg. For it may be

stated without fear of contradiction that in its funda

mental features the Federal Reserve Act is the uork

of Mr.. Warburg more than of any other man in the

country. . . .

"When the Aldrich commission was appointed it was

not long before Senator Aldrich to his credit be it

said was won over by Mr. Warburg to the adoption

of these two fundamental features. The Aldrich Bill

differed in some important particulars from the present

law .... The concession in the shape of the twelve

regional banks that had to be made for political rea

sons is, in the opinion of Mr. Warburg as well as of

the writer of this introduction, a mistake; for it will

probably, to some extent at least, weaken the good re

sults which would otherwise have followed. On the

other hand, the existence of a Federal Reserve Board

creates, in everything but in name, a real central bank ;

and it depends largely upon the wisdom with which the

board exercises its great powers as to whether we shall

be able to secure most of the advantages of a central

bank without any of its dangers ....

Mr. Warburg "Educates the Country"

4X MANY minor respects also the Federal Reserve

Act differs from the Aldrich Bill ; but in the two

fundamentals of combined reserves and of a discount

policy, the Federal Reserve Act has frankly accepted the

principles of the Aldrich Bill; and these principles, as

has been stated, were the creation of Mr. Warburg and

of Mr. Warburg alone.

". . . . It must not be forgotten that Mr. Warburg

had a practical object in view. In formulating his

plans and in advancing slightly varying suggestions

from time to time, it was incumbent on him to re

member that the education of the country must be

gradual and that a large part of the task was to break

down prejudices and remove suspicions. Hit plans

therefore contain all sorts of elaborate suggestions de

signed to guard the public against fancied dangers and

to persuade the country that the general scheme uas at

all practicable. It was the hope of Mr. Warburg that

with the lapse of time it might be possible to eliminate

from the law not a few clauses which were inserted,

largely at his suggestion, for educational purposes.

MAs it was my privilege to say to President Wilson

when originally urging the appointment of Mr. War

burg on the F dcral Reserve Board, at a time when the

political prejudice against New York bankers ran very

high, England also, three-quarters of a century ago,

had a practical banker who was virtually responsible for

the idea contained in Peel's Bank Act of 1840 U

Samuel Jones Lloyd was honored as a consequence L

the British Government and was made Lord Overstone

The United States was equally fortunate in having w

it a Lord Overstone ....

"The Federal Reserve Act will be associated

history prftft the name of Paul M. War-ur j

(pp. 387-390. Vol 4. No. 4, Proceedings oi the Acad

emy of Political Science, Columbia Universi :

It surely cannot be considered invidious for The

Dearborn Inph-knulnt thus to introduce to the people

of the United States a gentleman whose influence upon

the country is o vital. Just how vita! car. be under

stood only by those who have studied the puzzle oi a

country filled with the good things of life, and still

unable to use them or to share them because of a kink

in the pipe line called "money."

But that Mr. Warburg himself is not entirely un

aware of his position is indicated on page 56 oi his

testimony quoted last week. Mr. Warburg had just

told the Senate Committee that he was making a heavy

financial sacrifice to accept the position on the Federal

Reserve Board offered him by President Wilson, and

into the fitness of which appointment the Senate was

carefully inquiring :

Senator Reed "May I ask what your motive

is, or your reason for making that sacrifice ?"

Mr. Warburg "My motive is that I have, as

you know, taken a kern interest in this monetary

reform since I have been in this country.

"I have had the success which COWUi to fen

people, of starting an idea and starting it so that

the whole country has taken it up and if has

taken some tangible form."

Professor Seligman advises us of the strategy that

was used to get the whole country to take up Mr. War

burg's idea, and of the fact that some of the items in

serted to appease the public might easily be removed

when the public shall have become accustomed to Mr.

Warburg and the Federal Reserve Board: but Mr.

Warburg adds another hint, to the effect that you can

do some things by administration which you cannot do

by organization.

"I Won't Show You How to Work It"

FOR example : Mr. Warburg wanted only one cen

tral bank which should be the sole arbiter of finance

in the United States. The United States Government

would have almost nothing to do save to make the

money and stand back of it ; the bankers oi the United

States, and the people thereof, would have nothing to

dc except what they were told; the one central bank

would be the real financial governing authority.

When asked by Senator Bristow to state the funda

mental difference between the Aldrich plan and the

present Federal Reserve plan. Mr. Warburc replied:

"Well, the Aldrich Bill brings the whole sys

tem into one unit, while this deals with 12 units,

and unites them again into the Federal Reserve

Board. It is a little bit complicated, which ob

jection, however, can be overcome in on admm

istratne way; and in that respect I freely crit

icized the bill before it WPfl passed."

There is evidently, then, a method of administra

tion for which severe critics might even use the wor

'manipulation," by which the plain provisions ot I

banking law, whatever they may be, may be. if no

evaded, then somewhat adapted. . .

This idea is brought to mind by a more colloquial

expression of Mr. Warburg's to be found JB his ao

dress on "bank acceptances" delivered in 1919:

"In this connection I am reminded of a stor

I once heard concerning a man belonging to a

species now soon to be extinct and to be foun

by our children in Webster's dictionary only,

bartender.' A man of this protest pr

historic times, was abandoning hi position m

was turning over his cash-register to hi .

or. 'Please show me how it work. ! ?jj

newcomer. 7 will show you how it icons

the other, 'but I won't show you how to wm

The Interpartisanship of Internationalists

THE politics of Mr. Warburg and the fcriir T

Loeb & Company formed part of the ,n(Ju,rwhich J.

Warburg made some interesting revelations q.

lustratc the oft-repeated statement that P .

Jewish policy-pcrhaps of large financial m

ally-to attach themselves to both Parl. which

tain interests may be the winners regardless

party is defeated. oolitic?"

Senator Pomerene-"What are

Senator Nelson-No: we have not

that before this committee.