Otto Jeidels: Cosmopolitan "Realist"

…I have abhorred the Nazi regime in the indissoluble entirety from its outset, and in this respect I have never become the victim of an aspired openmindedness to everything new, even young and even revolutionary whenever I met it in life or literature.

Otto Jeidels, Undated statement[1]

…but the combination of a monstrously big business, as the Bank of America is, with my inclination to be factual, accurate and systematic to the degree of putting my nose or fingers into every department and activity, is too much … , unless I would sacrifice all other interests, economic and political, national and foreign.

Otto Jeidels to Frank Altschul, March 3, 1947[2]

Introduction

Some historical figures pique our interest because of what they did, some because they are witnesses to important events, people, and organizations. Although Otto Jeidels (born March 13, 1882 in Frankfurt am Main, Germany; died June 16, 1947 in Bürgenstock, Switzerland) is one of the rare historical actors who are important because of both his participation in and commentary on German and international banking during the first half of the 20th century, by intention or passage of time, many of his opinions about the great political transformations of his time remain shrouded from historical analysis. His views on German universal banking are well known and still cited, but Jeidels’ natural discretion and understandable caution seemed to inhibit public expression of his opinions about many of the great political issues of the day and about even his own life. We know much more about his professional accomplishments than his personal life, but even in business he tended to keep a very low profile. Like many business leaders, Jeidels was less inclined than intellectuals to express publicly how he felt about the great issues of his day. A leading member of a cosmopolitan community, Jeidels’ life and his pursuit of “realism,” as he himself wrote, illustrate the precarious position of both Jews, even assimilated ones, and even the international financial system during the first half of the 20th century. Tall and handsome, with glowing eyes (at least in the view of one commentator), Jeidels was generally considered quiet and unassuming.[3] Despite his death before the post-World War II boom, Jeidels’ relative success in Europe and the United States serves as testimony to the importance of competence, experience, and internationalism in business, even during the interwar period.

But his story also shows how little we really know about businessmen in the history of German emigration from 1933 to 1945 and the dilemmas of German Jewry.[4]To paraphrase what Volker Berghahn wrote in a more general context, hampered by sources or by inclination, historians have by and large been much more interested in studying the sea change in philosophy, science and the arts which occurred with cross-border flows of many kinds in the first half of the 20th century than the experience of business executives and entrepreneurs.[5]

Family and Education

Otto Heinrich Julius Jeidels was born to Julius and Anna Jeidels on March 13, 1882 in Frankfurt-am-Main. He had two siblings, Margarete and Hans. His grandfather was a banker and his parents were prosperous enough to collect art privately. His forefathers were part of a small group of Frankfurt families who had attained Swiss citizenship after the Austro-Prussian War of 1866, a fact that would later prove useful.[6] While he came from a Jewish family, we know little of his personal religious beliefs; by the time he became a well-known banker he had probably converted to Protestantism.[7] As was often the case for German students, he studied at several universities. For Jeidels, though, this entailed several different subjects. After graduating from the public high school (Lessing-Gymnasium) in 1900, Jeidels began to study law in Bonn before moving on to Friedrich-Wilhelms-Universität in Berlin and then to the Cologne Business School (Handelshochschule Köln) where he studied political science, economics, and law (Staatswissenschaften).

In 1904, he moved back to Berlin, where he received his doctorate in the philosophy department studying under Max Sering and Gustav Schmoller, two of Germany’s leading social scientists. Jeidels expanded his dissertation into a groundbreaking book on the much-debated topic of banking power in Germany and the economic significance of personal influence on commercial enterprises, which first appeared in 1905 and was soon republished in a series edited by Schmoller and Sering. Although not translated into English, the book was widely read. It is still one of the most important sources for understanding how German banking and finance worked with industry.[8] Jeidels argued that German banks influenced and profited from their relationship with clients by offering a wide range of services from trade financing to complex transactions on exchanges. Following his Berlin professors’ historical and institutional approach to economics, which influenced Joseph Schumpeter, in “The Relationship of German Universal Banks to Industrial Firms” (“Das Verhältnis der deutschen Großbanken zur Industrie”), Jeidels highlighted the role of change and adaption in capitalist efficiency. For Jeidels, the close relationship between companies and their banks helped insure that commercial companies had the necessary capital to enlarge their scale and scope, “die Bildung großer Kapitalmassen.”[9] His analysis was very focused on the needs and opportunities of heavy industry, but Jeidels recognized that bankers’ interest in industrial concentration could blind them to opportunities in other sectors and to limits in the potential growth of the iron and coal industries.[10] A second less influential book appeared in 1907, using sixty visits to factories as a basis for a study of worker pay at iron firms in the Rhineland and Westphalia.[11] It did, however, contribute to the first step in his life as a businessman.

Early Career and BHG

In Frankfurt he met Wilhelm Merton, the father of one of Jeidels’ school friends and an entrepreneur who had founded Metallgesellschaft, one of the first metal-trading companies, in 1881. The elder Merton sent him to work in his London and then New York operations around 1907.[12] After a year with the Merton company in New York and a stint in Denver, Jeidels took a position at a stock brokerage,J. S. Bache & Co., before leaving the United States, “a nation to which he seemed more attached than to his actual homeland and to which he felt a life-long strong yearning” (“an denen er mehr zu hängen schien als an seiner eigentlichen Heimat und nach denen er jedenfalls immer eine starke Sehnsucht zurückbehalten hat”), as his friend Paul Wallich wrote.[13]Wallich was the son of Hermann Wallich, a founding member of Deutsche Bank’s managing board (1870–1894) and member of the bank’s supervisory board (1894–1928). Paul Wallich and Jeidels had studied together and spent time together in New York just after the Panic of 1907 there.

Despite the connection to Deutsche Bank in Berlin, Jeidels failed to get a position with Deutsche Bank, but through a contact he had made in New York, Heinrich Treitel, who later was an executive at AEG (General Electric of Germany), Jeidels came into contact with Carl Fürstenberg, Treitel’s stepfather.[14]As head of the Berliner Handels-Gesellschaft (BHG) bank from 1883 onward, Fürstenberg was a financial figure of legendary proportions in Germany. Trained by Berlin’s preeminent Jewish banker, Gerson Bleichröder, before moving to BHG, Fürstenberg’s religious affiliation did not stop him from masterminding many of Germany’s most important financial transactions, including the discreet purchasing of private rail shares before nationalization.[15] Having a particularly strong relationship with heavy industry, many of BHG’s partners and advisory board members were Jewish, including Emil and Walther Rathenau (AEG), Walter Merton, son of Wilhelm (Metallgesellschaft), and Max Warburg (M. M. Warburg).

By the time Jeidels joined the bank, BHG had already enjoyed a fifty-year history as one of Germany’s most important and unusual financial institutions. Under Fürstenberg especially, it became one of the leaders in German investment banking in general and in industrial securities in particular.[16]AEG, Berliner Maschinenbau, Deutsche Eisenhandels, Metallgesellschaft, and Kokswerke were among its most important clients. BHG was organized as a Kommanditgesellschaft auf Aktien, a term which has no direct translation in English and no counterpart in Anglo-American corporate law. It combined features of private and joint-stock banking: on the one hand, it was a partnership, enabling a tightly-controlled, centralized organization with no branches; on the other hand, it had an independent legal existence and a management board and could issue shares (like a joint-stock company); some of its shareholders could have limited liability, but its shares could not be traded on public exchanges. As in a partnership, the personal experiences, contacts and active management of the owners played a crucial role. Despite its unusual legal structure even in Germany, when Jeidels joined BHG, it already belonged to the exclusive club of Berlin’s major banks—Deutsche, Disconto, Dresdner, Danat (established in 1922), and Reichs-Kredit-Gesellschaft (established in 1924)—all of which were joint-stock banks, but maintained aspects of private banking.[17]

Jeidels played a key role at BHG from the time he joined the bank until he left Germany in 1938. In 1909, Jeidels became head of BHG’s administrative staff, and continued to work at the bank through World War I. It is not known why Jeidels did not serve in the military, but during the waning months of World War I, Jeidels became a partner, and gradually, as the elder Fürstenberg reduced his activities, the leading personality at the bank. It was presumed that this would be an interim position until Fürstenberg’s son, Hans, was ready to assume his father’s role, but this transition never materialized as planned. As early as the 1920s, Jeidels was seen by many contemporaries as “Germany’s masterful financial diplomat.”[18]Despite this renown, he was quiet and modest, personality traits that may explain why there are so few press reports and official records about him.[19] As an entrepreneur, he lacked flamboyance but cultivated discretion, which may have made him more effective in attracting and representing industrial clients for BHG.

In 1927, against much internal opposition, Jeidels rejected giving additional credit to an industrial client, the Bremer Nordwolle-Konzern, which at the time was going through an aggressive expansion program. The company followed through on its threat to switch all its business to another bank, Danat.[20] When Nordwolle collapsed, it brought the Danat Bank down with it and provoked the 1931 Banking Crisis. BHG’s specific client structure protected it against massive withdrawals or shaky loans, unlike other large banks. The greatest threat to the bank came from the government restructuring of Bremer J.-F.-Schröder-Bank, with which BHG had a close relationship. In any case, from the outside, BHG was less affected by the collective catastrophe.[21] BHG’s reputation survived, and perhaps was even enhanced as it, unlike many other banks, required no direct state aid, a fact for which Jeidels deserved much of the credit.

Within BHG, succession planning had become more difficult because of the speed at which its business was growing. The person actually chosen to succeed Fürstenberg, Gustav Sintenis, who had joined the firm in 1907, died unexpectedly in 1931. His passing left BHG exposed.[22]After the older Fürstenberg’s retirement in the mid-1920s, his son Hans, who had entered the bank’s management in 1919 at twenty-nine, assumed, however, that he would be his father’s eventual successor. But the older and the younger Fürstenberg had a falling out and Hans considered leaving BHG but decided to stay.[23] The cause of the dispute might have been a difference of opinion over the eventual succession. In principle, BHG had been run with collective leadership. Only Carl’s status as one of the preeminent bankers in Germany made him the informal leader of the bank, a position that the other partners and even his father might have believed Hans had not yet earned.

Moreover, Jeidels’ own quick climb to the top of Germany’s commercial elite was apparent. He had attained a very lucrative position with BHG, including his fees for serving on the boards of many major German firms. Among financial specialists whose key success factors included knowledge and communication competencies and general human capital, Jeidels stood out. From February 1931 to May 1932, Jeidels’ ranking among German bankers for the number of supervisory boards he sat on rose from tenth-place to fourth, a position that only strengthened rather than weakened during the Banking Crisis. In 1932, for example, Jeidels held over twice as many supervisory posts as Hans Fürstenberg, who in the late 1920s was just beginning to build his own network.[24]

Taken from Münzel, Die jüdischen Mitglieder, figure 11, 204. A 1931 reform of the stock corporation law led to a reduction in the number of supervisory board mandates by 1932.

Jeidels’ strength among German business people was derived largely from his international experience and reputation. The entire bank had long profited from its international connections, especially those derived from its contribution to the financing of American railroad expansion in the 1880s.[25] Several other important partners in BHG had significant foreign experience and expertise. Siegfried Bieber, for example, who represented BHG at the stock exchange, had worked in London and New York for French, American and Italian firms before World War I.[26] Hans Fürstenberg, who worked from the fall of 1912 to the end of 1913 in the London branch of the Banca Commerciale Italiana, met Bieber and brought him to BHG in 1919. After a stay in Paris, Hans planned to spend time training in New York, a plan that the war prevented.[27] Throughout the 1920s and 30s, Fürstenberg made several international business trips, including a stay in New York in winter 1935/36 as part of a longer visit in the United States to see banks, General Electric and various individuals, a year before moving on to the supervisory board.[28]

Jeidels seemed to shift his main international focus toward Asia. He himself had contributed much to the development of the US lending business, before it became a priority for Hans Fürstenberg. In summer 1931, Jeidels’ international contacts proved useful, for example, during many conversations with the Chinese finance minister, Soong Tse-Ven, during his stay in Berlin. China intended to enter into contracts of around RM 500 million ($118 million in 1931 dollars, or approximately $1.7 billion in 2010 U.S. dollars) over a period of two to three years in Europe and the United States. The business was going to be done with the private banks Kuhn, Loeb & Co. in New York and Lazard Frères & Co. in London and Paris. The French entrepreneur and consultant, Jean Monnet, served as an agent for the Chinese and brought Jeidels into the discussions. The two knew each other from their involvement on the Indian Currency Committee. Monnet was confident that Jeidels could handle much of the planning for any German transactions.[29]

The extent and quality of Jeidels’ reputation in private banking during the interwar period is evidenced by how and how often his name was brought into discussion about crucial financial issues and leadership questions facing Germany. When Hjalmar Schacht, architect of Germany’s currency reform in 1923, head of the Reichsbank from December 1923, and later a key financial actor in Hitler’s government, retired in March 1930, for example, some important players thought that he might make a plausible successor.[30] However, given the economic and political circumstances, Germany’s secretary of the interior, Carl Severing, believed strongly that Schacht’s successor could neither be a Jew nor a socialist[31] – a consideration which seems to have convinced the chancellor, Hermann Müller, that Jeidels’ candidacy “would attract public attacks.”[32] In the face of the feared anti-Semitic reaction, the choice for the new president of the Reichsbank fell on the less controversial former chancellor Hans Luther.

Social Network

Little is known of Jeidels’ social activities, even though membership of exclusive clubs and association often served as networking and communication opportunities.[33] Whether he regularly attended the salons of high finance or gave dinners is unknown. His social bent seemed more towards high culture than high finance. We do know that he had contact with Berlin personalities like Albert Einstein and young German artists.[34] After sharing a house with Dr. Julius (Jules) Lehmann from Frankfurt, in winter 1921, Jeidels acquired a large piece of land in Berlin’s fashionable Wannsee, on which in 1922 he had built a villa and other structures, with baroque and early classical elements. In the spacious gardens, Jeidels installed statues and surrounded himself with well-known, modern Berlin artists, such as Hans Purrmann, Eugen Spiro, Franz Heckendorf and Wolf Röhricht.[35] He also entertained colleagues. Hans Fürstenberg, for example, remarked on his graciousness as a host. According to Fürstenberg, Jeidels possessed knowledge, charm, wit and a yearning for things foreign.[36] Also in 1922, he married Gertrud (“Tula”) Stargardt; the couple did not have children. No source has emerged from the period indicating what Jeidels or his social circle thought about the great political and social issues of the day.

Jeidels and the Growing Political Storm

In 1933, the suppression of Jewish participation in the German economy became painfully clear. In 1931, in large joint-stock companies 11% of managing board members and nearly a quarter of all supervisory board members were Jewish. Within a year and a half of the Nazis coming to power, Jews had lost half of their positions. By 1938, the numbers had dwindled to 8% (management board) and 17% (supervisory board) of their 1933 levels. In other words, over 90% of the slots on management boards and over 80% on supervisory boards held by Jews in early 1933 had been lost by 1938. At the largest joint-stock banks, where in 1927 a quarter of the managers were Jewish, by the middle of 1934, their number had dropped to 6.5%, in 1938, to 1%.[37]

But despite the rise of anti-Semitism, Jeidels’ position in the German economy remarkably increased through 1933, in part thanks to his bank’s reliance on self-financing. With its relatively conservative, autonomous financial structure (independent of the stock and bond markets) and the addition of non-Jewish directors, BHG even succeeded in dodging attacks on Jeidels and Hans Fürstenberg. It kept these Jewish executives until 1938. With entrepreneurial skills and personal demeanor, Jeidels himself was able to stay on the boards of 17 German joint-stock companies until the beginning of 1938. Among these firms were German giants such as Vereinigte Stahlwerke, Harpener Bergbau-AG and Mitteldeutsche Stahlwerke.[38]

Part of the explanation for Jeidels’ continued presence lies with Jeidels’ usefulness to the new regime. Since 1931, representatives of international banks had met yearly to try to find a long-term solution for Germany’s private short-term foreign debt. The meetings resulted in various convoluted temporary versions of what became a long-term moratorium on payments. Because of his international reputation, until 1938, Jeidels remained a member of the German negotiation team. Along with Hans Fürstenberg, as late as January 1938, Jeidels was chosen by the Finance Ministry and Reichsbank to participate at the London meetings.[39]

Jeidels later freely admitted that resisting the Nazis’ economic and social policies for Germany as a whole was not his highest priority. Reflecting on his participation in and service to the Nazi economy in 1946 Jeidels, like many non-Jewish business leaders, defended his actions by reference to his obligations to the institution which had made his career possible and in which he had held a leading position. He recognized how much his continued position in the economy and even his own firm relied on the support of financial leaders with close relationships to the Nazi regime, such as Kurt Schmitt, the head of Allianz, the large insurance company, who served for a year as Hitler’s second Economics Minister. After the war, Jeidels wrote:

I didn’t think it justified to abandon my place at the head of a bank, which had given me such an excellent career. The Hitler regime made my life difficult, but it did not remove my duty to the bank. I decided not to make any compromise with the party but to protect any employee who was persecuted because of his socialist attitude, his religion, or his race […] For five years, I was able to hold to this decision. Until the beginning of 1938, under severe and incessant pressure, I was able to preserve my commitment because of the loyalty of my employees, of my close colleagues, and of such business personalities as Dr. Kurt Schmitt.[40]

Jeidels was actually proud of what he had achieved for himself and others during the 1930s.

I have until my resignation from my duties and departure from Germany succeeded to remain free from personal insult and such to those under my care and protection; I was privileged to succeed as the sole exception in all Germany as the head of a non-Jewish business enterprise in maintaining for every Jew, Catholic, former Socialist or free-Mason his unimpaired position in my bank, years after the expulsion of these categories from every non-Jewish firm in banking, commerce and industry.[41]

Although Jeidels first went to Switzerland from Germany – and Americans were furious about Germany’s double-dealing with default – his American connections saved him. Jeidels seemed to set great store by keeping his American banking contacts alive. Before visiting the United States in September 1934, Jeidels laid the groundwork for his trip through letters to S. Sloan Colt and O. P. McComas, president and vice-president respectively of the American firm Bankers Trust, which had done considerable business in Germany.[42]

His April 1937 visit, made with his wife Gertrud and lasting several weeks, had even greater personal significance. The couple crisscrossed the country, starting in New York, making their way through the Midwest to the West Coast, and then returning to the East Coast.[43] While the trip was billed as a vacation for them, having ostensibly nothing to do with the German Debt Standstill Agreements or the increasingly precarious position of Jews in Germany, it had obviously deeper economic and personal significance. In addition to the debt agreements, a topic still important for him and his American colleagues, it is hard to imagine that Jeidels did not use the 1937 trip to discuss a possible future in the United States. In particular, Jeidels renewed and deepened his relationship with New York banker Frank Altschul, of the firm Lazard Frères, whom he had known for several years.[44] “Those weeks in America,” Jeidels would write to Altschul the following winter, “and that impulsiveness of personal initiative with which the American atmosphere is charged today, the same as ever before, have been a source of extraordinarily deep gratification to us and have left us already now with a longing for an early repetition of the journey.”

By then, the writing was on the wall regarding his personal future in Germany. By the end of 1937, Hitler had announced that Germany’s preparations for war would be intensified. For him, those preparations included making sure that German business had rid itself of potentially disruptive foreign (Jewish) influences. In early 1938, firms all over Germany were threatened by nationalization if they could not get Aryan certification by ridding themselves of their remaining non-Aryan managers at the very least.

America as Safe Haven

Despite the added pressures—by 1937, the Gestapo was watching Jeidels—there were still many uncertain factors to settle before Jeidels could consider leaving Germany. Leaving was not easy. He had family obligations, since he was financially supporting his sister Margarete’s family in Frankfurt as well as a cousin. His sister’s husband, an attorney named Adolf Fuld, had lost his position and Jeidels’ younger brother, Hans, a director at Dresdner Bank in Frankfurt, was under enormous economic pressure due to his personal liability for the collapsed Wronker department store in Frankfurt.[45] His mother Anna was still alive. Both she (in 1938) and Jeidels’ brother, Hans, finally left for Switzerland.

Jeidels’ family ties made his departure more difficult, but in other respects he was very fortunate. Just ten days after giving up their Berlin residence and eight days after submitting their application, Otto and Gertrud Jeidels were able to reclaim Otto’s inherited Swiss citizenship, on March 18, 1938. With the change in status, they probably lost a lot of property due to the Reichsfluchtsteuer (Reich Flight Tax) and Nazi transfer taxes, although the exact amount is not known. Hans Luther later claimed that he was able to convince the Reichsbank to allow the Jeidels to take a significant but unknown amount with them into exile. Jeidels’ own recollection noted in somewhat awkward English: “Beyond the loss of 95% of my property the severance from my former activity and domicile has not meant any sacrifice for me personally, because the past had done and received its duty and the possibility of emigrating to the U.S.A. has been for me, and all the Nazi years looked forward to, as a happy dream become true.”[46] The conditions of his new employment tend to confirm Luther’s claim. At the very least, Jeidels seemed to have significant sums outside of Germany, although there are no British, American, or Swiss bank records available to verify this.

We know some of the key dates pertaining to Jeidels’ transition to North America, but his exact movements between North America and Europe as well as within Europe during 1938, and what views he held on the deteriorating position of Jews in Germany, remain unclear. In January 1938 the New York Times announced his retirement from BHG, indicating that his private and public banking activities had established his international banking reputation. The article highlighted his twenty-nine years with the bank, twenty as a partner, and his international financial expertise and network.[47] While Altschul apparently made some sort of offer to join him at Lazard Frères, as late as summer 1938 Jeidels avoided making concrete career plans.[48] Only at the end of his next visit to the United States, a year after he had met with Altschul, did Jeidels make his final decision to settle there. Jeidels discussed with Robert Brand and Sir Robert Kindersley, two partners at Lazard Frères in London, his desire to finally leave Germany for good. In April, from Europe, he applied for an American visa.[49] In October, he made arrangements to meet personally with Altschul for help deciding among the various opportunities he had in New York.[50] After traveling through several European countries, in late November 1938, Otto and Gertrud Jeidels arrived in New York.[51] Eight months later, and a few months before war broke out in Europe in September 1939, he took up his post as a partner at Lazard Frères. His transition may have been relatively smooth, but it had taken him over a year to get back to a full-time banking career.[52]

New York Banker

There were many opportunities in New York, but the challenges were also daunting. The macro- and micro-economic circumstances were not ideal, to say the least. First the possibility, and then the reality of a European war cast a shadow over normal business. Although we do not know the details of his activities at Lazard Frères, his correspondence with Frank Altschul, even after Jeidels left the firm in 1943, reveals a rich assortment of activities and interests and reflects an uncertain environment. They concern not only the business development of the bank but also political and economic, international trade and foreign exchange issues as well as the state of German industry. They even touched on the economic role of India and the production of synthetic rubber.[53] Clearly the danger of a coming war was a theme that ran through many letters, especially with his colleagues who remained in Germany. According to Jeidels, Germany pursued a policy that swung between military threats on the one hand and diplomatic maneuver and propaganda on the other to achieve its ends, which actually diminished the chances of war. But he cautioned, “It may, however, be that as I have often been wrong in the past I may be wrong again in this appraisal.”[54]

Jeidels’ immediate concern, however, was integrating into his new life as an American banker. Altschul helped with recommendations for acceptance in exclusive New York clubs and introduced him to club representatives as an “outstanding banker in Central Europe” and internationally renowned expert for foreign banking.[55] His integration into the United States at the nearly one-hundred-year-old, worldwide investment bank was a bit of a media event. An article in the influential magazine Time in July 1939 called him the “Insider from Overseas,” a veritable “present from Adolf Hitler” at a welcome time for Germany to be suffering a shortage of international banking experts. “Despite the denunciations of demagogues, shrewd international bankers are a commodity of which the U.S. has never had an adequate supply.” Time provided a vivid portrait of Jeidels. “This week…the U. S. acquired a very competent specimen of the breed… He is Otto Jeidels… a tall handsome man with a twinkle in his eye, who habitually talks so fast that no one else can get in a word. Before Hitler purged German banking Jeidels was only one size smaller than Hjalmar Schacht himself… Invaluable to this clearing house of news, bullion and foreign capital will be Jeidels…”[56]Time was particularly impressed by Jeidels’ position at the top of BHG, his role in international business, and his ostensibly close and trusted relationship with Hjalmar Schacht, who had been until just before Jeidels’ arrival in the United States Germany’s most important financial leader. Because of Jeidels’ useful relationship with Montagu Norman, the Governor of the Bank of England, and his key role in arranging with the British the series of standstill agreements, according to several sources Schacht protected Jeidels and advised him to get out of Germany in advance of the November pogrom (Kristallnacht).[57] As will be discussed later, Schacht and Jeidels shared a great mutual respect. But Schacht, who had been the Nazis’ closest tie to the business community, was losing his power within the regime, not coincidently just as the government was increasing its military preparations and forcing the last Jews out of the German economy.

The German emigrant community viewed Jeidels as an important addition. His presence might become an asset for others less fortunate, even though bankers had little more success than other immigrant professionals in maintaining themselves in their own profession.[58] In many respects Jeidels seemed destined to be a leader of the community. Many immigrants knew about Jeidels’ new career. Just before he himself left for New York, a former partner at the Berlin private bank Mendelssohn & Co., Paul Kempner, emphatically expressed his confidence in Jeidels’ aptitude for the American market. “As Jeidels knew more about American history than Americans did, he would fill a 300-year-old hole.”[59] Similarly, a long-time member of Metallgesellschaft’s management board, Julius Sommer, who had been in the United States since the end of 1938, reported that “no one he had heard from in the past year, besides Dr. Jeidels, had found a suitable activity. Even younger people were having a tough time.”[60] Nevertheless,we know little about Jeidels’ role within the immigrant community. He is unmentioned in accounts of the German-Jewish community in New York.[61]

Like many recent émigrés, Jeidels had difficulties with American authorities, perhaps because of his continued cordial relations with important German business leaders. Even his contacts with important American statesmen like Herbert Hoover, James F. Byrnes, and John Foster Dulles could not altogether stop mistrust of him as a former German. The British government and the Federal Bureau of Investigation (FBI) both investigated him. On December 9, 1941, Frank Altschul discovered from a British government representative that many reports about Jeidels in the United States had stimulated the impression that Jeidels held anti-British views, which made him very suspect. The British also investigated some opaque payments that had passed through Jeidels’ bank accounts that it found disturbing. Altschul turned to the British ambassador in Washington, Lord Halifax, to help Jeidels remove the suspicion. Later, after hearing that the FBI had begun its own investigation of Jeidels, Altschul appealed directly to its chief, J. Edgar Hoover, expressing his complete trust in Jeidels’ integrity and loyalty.[62] Hoover’s response in January 1942 seemed to have settled the matter at an official level, but some of the attacks on Jeidels seemed to stick.[63] Jeidels drafted a statement addressed to his critics that survives among Altschul’s papers. Written in English, the statement, in which Jeidels defends himself against charges that he sympathized with the Nazis, was probably drafted in late 1941, just before America’s entry into World War II. The document reveals the degree of pressure he was under and its cause. It is by far the most detailed discussion of his views of the Third Reich and his role in it. The only copies existent appear to be a handwritten and typed version in Frank Altschul’s private papers at Columbia University.[64]

Jeidels’ statement spends much time defending his apprehension about America’s possible involvement in the European hostilities. He seemed convinced that it was these views that got him in some trouble. He argued that his concerns were motivated by his loyalty to his new homeland – indeed, many Americans shared his fears – certainly not by pro-Nazi sentiments. But he himself acknowledged that his warnings of the difficulty of toppling the Nazis, of Germany’s industrial and military strength, and of the effects of the United States being defeated with the other Allies might appear odd. He confided that he was for American rearmament, because only a militarily strong America could influence the world “after a German victory.” Probably writing near the apex of Nazi military advances, his counsel was to avoid making common cause with the comparatively weak Allies. The Nazis did threaten the United States, but he was convinced that “as things stood on all sides” the United States should avoid being “drawn into an Allied defeat.”

While priding himself on his realism and his devotion to the United States, the document betrays a lot of naiveté about National Socialism and its invincibility that may have been interpreted by some as pro-Nazi or at the very least pro-German. Clearly, by race and by temperament, as the quote that opens this chapter indicates, he was destined to abhor the Nazis. His statement contains several insights about the Nazis’ ability to recruit and coopt diverse groups, including middle class individuals ruined by inflation, patriotic workers who feared the international ties of the communists, and disappointed industrialists who shared the shock of a lost war and the disappointments of peace and a new democracy. The Nazis differed from fascists and communists in their ability to gain mass support and complicity by playing on Germans’ political ignorance and willingness to follow strong leaders, he argued. Yet Jeidels compared the movement to France under the reign of Napoleon III. Both were a natural reaction to humiliation in war and peace. On several occasions he cautioned against underestimating the economic and military power of the new Germany. Priding himself as a realist, someone who in “private, business and public affairs” avoided “ignorance [and] wishful thinking” and who, both in Germany and abroad, criticized Hitler hero-worship, he confessed that, until he felt his presence would hurt BHG’s stakeholders, he actually fared well under the Nazis.

Jeidels repeated that until he left BHG he had been left alone, but that his position as a leader in big business was an exception. The probable explanation for this rare exception among Jews and other targets of the regime was his compliance with government requests for help in resolving international disputes. Having a Jew help lead Germany’s team in foreign financial talks, even for the ideologically driven Nazis, must have seemed highly useful. While no active critic of the regime, at times he encouraged consideration of a middle position that recognized Germany’s important economic role and the effects of World War I. There are no expressions of regret that his own financial genius and passive consent had helped sustain an evil regime and the very German strength that now threatened the world. In his mind, Jeidels had made a reasonable bet. Like many within and outside Germany, during the mid-1930s he probably hoped that with the passage of time and a restoration of some normality in economic and international life, wild elements in government would be tamed.

Before the moral consequences of that bet and the weaknesses of Nazi economic policies emerged as World War II wound down, Jeidels, like many, still seemed awed by the German economic and technological virtues, misjudging the effects of autarchy and totalitarianism. Some of the tone and even content of his statement seemed to bear the mark of the regime that he had fled. He comes close to advocating that Britain and the United States need to adopt Germany’s theory of will to power (Wille zur Macht). Perhaps that statement says more about Jeidels than it does about the political and economic circumstances of the time when it was written:

Nazism and Nazi Germany are for me and ought to be for everybody an object of hatred, an enemy whom the world must recognize as such and must fight to destruction. But one does not fight a world struggle against a strong and efficient foe with emotions in words or print, not with hopes and illusions and good wishes. One can fight strength only with greater strength, with vitality and sacrifice. With those Americans who share this fundamental starting point I have always been and am in agreement. Those who cannot or will not hear bitter truth, those who cover the weakness which have found their punishment in this war, with the appeal to uphold traditions, who ignore that civilization is not stable and must be remodeled in virile nations by vigorous generations to pass them on to the next as traditions again to be reviewed and revised and revived, – they naturally object to realistic observers but they help nobody, neither the countries fighting for their life against Germany nor this great country, which alone among the nations is still free to build up a strength of that size and character that is required for such a great issue.

Perhaps, too, part of the problem lay in his continued relations with powerful Germans. Jeidels’ contacts with Germany did not come to a complete end. Even if little or no business could be done, old ties remained. Hermann Josef Abs, for example, had known Jeidels since they served as delegates to the London “standstill” talks on Germany’s debts. Jeidels had invited him to join BHG in the summer of 1937, but Abs decided instead to take over a position at Deutsche Bank.[65] In August 1939, Abs visited Jeidels at Lazard Frères in New York and planned to visit him again a few weeks later. Abs congratulated Jeidels on his entry into Lazard and added his regrets about the difficulty of doing business under the existing political circumstances.[66]

Westward Bound

Jeidels’ experience in New York was somewhat frustrating. The middle- and long-term opportunities for Jeidels at Lazard Frères were not extraordinary.[67] This may have been due in part to the advent in New York of Andre Meyer and Pierre David-Weill—two partners fleeing the Paris branch—between 1940 and 1942. Their arrival may have even contributed to pushing Frank Altschul out of the bank leadership and his giving up his partnership in the beginning of 1944.[68] In any case, in February 1943 Jeidels resigned his post and moved to San Francisco to join Bank of America, where he began in March to serve as a vice president and deputy chair of finance. In April, just after his arrival and assumption of his duties, he was appointed to the bank’s advisory council.[69] His decision to leave for San Francisco seems to have had little effect on his friendly relationship with Altschul. Jeidels also already had a tie to California since he and his wife had been spending several weeks a year in Santa Barbara since 1940.

For the second time in his life, Jeidels tied himself to one of the key financial figures of his era. A. P. Giannini, a remarkable first-generation American banking legend who had built up the Bank of Italy with a vision of serving the Italian community combined with sangfroid and faith in his city and community during and after the 1906 San Francisco earthquake, set out to transform his local bank into a national one. Regulatory changes in the 1920s had enabled him to expand into branch banking throughout California, and by the mid-1930s he had changed its name to Bank of America and it had become the third-largest American bank after National City Bank and Chase National Bank of New York. The Transamerica Corporation, which Giannini controlled, owned Bank of America’s stock and was one of the few bank holding companies to successfully operate a network of banks across state lines, including 32 offices in New York City.[70] When National City Bank ran into difficulties from a poor financial strategy, Transamerica became one of its largest shareholders and Giannini joined its board.[71] Although his contribution is not as well documented as those of J. P. Morgan and James Stillman, Giannini was one of the most extraordinary figures in the history of American finance. He was responsible for a number of banking innovations and had enormous influence over the development of American banking.[72] In January 1936, A. P. Giannini turned over the function of bank president to his son Lawrence Mario, assuming the position of chairman of the board, but continued to wield primary influence.

Between Jeidels’ arrival in February 1943 and his retirement in May 1945, the bank became the largest in the world as measured by deposits and assets.[73] For Jeidels, heading to the “Giannini Empire” on the West Coast must have seemed like a curious adventure.[74] The senior Giannini, for his part, justified his decision to hire Jeidels with the observation that few bankers in the world were as qualified as Jeidels. Above all, his background of close relationship to industry and knowledge of management and international trade, typical for German bankers, must have been particularly welcome. Impressive for Giannini was the fact that BHG was the only large Berlin bank during the world economic crisis that did not need state aid and that Jeidels had won a lot of respect and friendly feelings from American bankers with his handling of the standstill negotiations and knowledge of exchanges. As Giannini wrote:

He has travelled extensively in Europe and has such a knowledge of international banking and foreign exchange that we feel he can be of much help to us now – and in the years that follow peace. And, of course, he knows American banking both from the commercial and investment end.[75]

A wide range of observers welcomed his taking the position with Bank of America. Many U.S. newspapers reported his appointment as a Bank of America vice president, emphasizing his activities in industrial development, agriculture and trade, along with his domestic and foreign banking contacts, which would be so important for understanding the inflation threat, the role of gold and stabilizing currencies in the postwar world.[76] As a representative of the bank, Jeidels gave speeches at a variety of meetings and took part in many committees and hearings.[77] In 1945, Paul Kempner observed that Jeidels found “with his new employment a country that resembled Berlin in the old days. At this time, California was at a similar stage of industrial and social development with many emigrants and many visitors.” With his position in California, Jeidels regained much of his old Berlin stature, a man in demand by his new local compatriots and visitors who sought him out expressly even though they had never been to Europe before.[78]

Adapting to life in California seemed to go rapidly and smoothly. Jeidels himself reported that his Californian activities in a quick and fascinating way led to hundreds of new acquaintances and a dozen new friendships, although there is no evidence that he had contact with the large group of German émigré writers and philosophers who had settled there. He and his wife “were once again impressed by the colorful, many-sidedness of the country.”[79] Also, from a financial perspective the opportunity was lucrative. During Hjalmar Schacht’s Nuremburg trial in 1945–1946, Jeidels’ annual salary at Bank of America was mentioned and estimated to be $100,000 ($1.12 million in 2010 dollars).[80]

Conclusion: Jeidels and the Postwar World

Jeidels’ untimely death in June 1947 at age sixty-five raises many questions about what his role would have been after World War II. Jeidels had been ill for nearly a year. He had never experienced serious illness until October 1946, when, while attending a bankers’ meeting in Nebraska, he suffered a life-threatening tear in a blood vessel near the heart. For a time, Jeidels was obliged to withdraw from many of his activities, but in June 1947 he traveled to Switzerland, in part for his recovery and in part to visit his eighty-nine-year-old mother.[81] While there, during a hike with a friend, sitting on a bench in the middle of a conversation, Jeidels died on the Bürgenstock mountain at Vierwaldstättersee, where he was also buried.[82]

We know little of his professional plans for the postwar period. In March 1947, he informed A. P. and Lawrence Giannini that he intended to resign from Bank of America, and he had been planning to spend the autumn in New York. If not for his health difficulties, he likely would not have given up the work at Bank of America which he found both pleasurable and fascinating.[83] His experiences certainly would have been different than those of Hans Fürstenberg, who after 1945 set himself up in Geneva and Paris as head of BHG’s supervisory board between 1952 and 1969 with special responsibility for international business.[84]

Like many of the émigrés, though, he was intensely interested in the economic and political policy questions connected with his former homeland. As Abs wrote to Jeidels’ wife Gertrud after her husband’s death, Jeidels’ final days were preoccupied by his bank and the fate of Europe: “How much his important activities at Bank of America and ideas about and solutions to Europe’s misery must have occupied his thoughts.”[85] In this regard, Jeidels welcomed an opportunity from the entrepreneur Lewis Brown, who was working on a paper for the American zone’s occupation commander, General Lucius D. Clay that detailed recommendations for German reconstruction after the war and which served as an outline for the Marshall Plan.[86] Brown wanted to tap into Jeidels’ long-term international banking experiences to help gain insight into the possible impact of postwar economic development proposals. In all likelihood, Jeidels would have taken an even more active role in the planning and implementation of the new economic order. In August 1945, Jeidels warned against rigid Allied measures, such as territorial transfers, limits on exports, and the removal from all commerce of managers and owners who had been Nazi party members. These steps would leave any democratic state from the very beginning with an unbearable and ineffective peace, completely discredited like the Weimar Republic after World War I.[87] A few days after the surrender in Europe, Jeidels spoke with the famous American society columnist, Elsa Maxwell, about the future treatment of Germany.[88] He prophesized the loss of forty percent of all German territory but strongly recommended quickly forming an administrative government in order to organize economic life, including a productive agricultural sector and stable German currency. Only knowledgeable and experienced men should be sent to Germany and could avert a catastrophe. Finally, Jeidels outlined his vision of a United States of Germany, resembling the political organization of America whose creation would lead to long-term peace in Europe.

Like other émigrés, Jeidels would have had to deal with the question of collective memory about the Nazi years. As with the others, this issue was extraordinarily complicated. Persecuting and depriving former colleagues of their rights in form of “denazification” housecleaning was of acute interest to and a very sensitive subject for refugees. Among the emigrants and the German business community, in particular, solidarity persisted after 1945, despite the experiences of deprivation and persecution; the emigrants demonstrated their solidarity by helping with denazification and by providing “cleansing statements,” derisively named “Persilscheine” after a famous German detergent brand, absolving former colleagues of responsibility.[89] As contacts re-emerged after the war, some emigrés quietly—and others intensely—maintained that their former colleagues had distanced themselves, if not completely rejected, the Nazis. Even those who had been involved in the war economy, administration and politics were in many ways protected, which required reinforcing their own self-portrait of their involvement, a self-examination that was sometimes accepted at face value by Allied authorities.

Jeidels was no exception. This can be seen with two examples. One was Hermann Josef Abs, who like all his colleagues was let go from the management board of Deutsche Bank. In the beginning of 1946, Abs was arrested, spent three months in custody and was one of the leading bankers of the Nazi period to be tried.[90] In December 1946, Abs contacted Jeidels.[91] Jeidels did not hesitate to express his personal respect for Abs and seemed convinced “that men of good will and high ability like yourself will again be given an opportunity and that not many years will pass before Germany will take again its place among the constructive nations of the world.” Like many others, Jeidels was enthralled by Abs’ abilities and promised to support all of his efforts to return to his old activities. Jeidels added:

It is scarcely unfair to anybody if I say to you that among the bankers who have been my colleagues or competitors in the old career, you are the only one who interests me and you are the one for whom there must be a future.[92]

Jeidels’ relationship with the former head of Allianz-Versicherung, Kurt Schmitt, is especially interesting. From the end of June 1933 when he succeeded Alfred Hugenberg to July 30, 1934, when he took a leave of absence from the post, Schmitt served as the minister of economics in the new regime. A member of the NSDAP since 1933, Schmitt became an SS-Oberführer (senior colonel) and oversaw the process of stripping Jews of their influence in the German economy, an achievement evidenced by the transformation of many firms from Jewish to Aryan, condemning Jews to economic isolation.[93]

Starting in 1945, Schmitt’s struggle against denazification lasted nearly four years, and included a good deal of support from Otto Jeidels, with whom he had had both a professional and personal relationship dating back to the Weimar Republic.[94] Jeidels’ comments about Schmitt reflected a bond that may have been reinforced by their experiences during the Nazi regime. In a sense, both men had made similar bets, namely, to work with the regime in hopes that it would become more reasonable. Not only had men like Schmitt selectively proven their friendship to each other by protecting some in their hour of need, they also shared a common dilemma and perhaps even a common pact with devils they ordinarily would despise, a pact about buying time which Jeidels and Schmitt may have even hatched out together on regular walks in the Berlin Tiergarten during the 1930s.[95] As early as August 5, 1945, Jeidels declared in a letter to an American major he knew:

I have a high respect for Dr. Schmitt, am familiar with his high character and the honorable motives which have guided his actions in the many years that I have known him. Nothing could be more welcome to me than to be requested by the American Authorities to testify about, and on behalf of, a man who stands high in my appraisal of character and human qualities and who has tried his best to assist the better elements of the population in an unforgettably dismal period of my former country and my own life.[96]

To the director of a Swiss insurance company, Jeidels wrote: “Dr. Schmitt is in my lasting memory as a man who did his best to reform the Nazi Government when it was still relatively new and could offer to an idealist the hope of success… I have always been convinced that he made this almost heroic experiment for entirely unselfish reasons.”[97] Even stronger was his expression of unwavering support for Schmitt, expressed in his September 4, 1946 declaration. Already in the beginning of the 1930s, according to Jeidels, Schmitt had warned of the dangers of National Socialism and expressed his horror at some parts of the party’s program. Only after a tortuous debate with himself did his conscious allow him to become a minister in the new government, “tragedy that a man of such caliber must suffer for his patriotic attempt to avoid the worst excesses of the regime.” Jeidels had suggested Schmitt as chairman of both AEG’s and the Dessau-based Deutsche Continental-Gas-Gesellschaft’s supervisory boards, in order “to protect those companies and their leadership from party attacks, NS denunciations, and against those among the rabble who might use Schmitt’s departure from the government for further attacks against the private sector.”[98]

Jeidels saw Schmitt as one of the most capable and honorable businessmen he had ever known, someone who in America would be called a liberal or perhaps better put a progressive representative of middle-class interests: “Here is a man for whom I would thankfully and respectfully tip my hat, and to whom I would always give my hand in friendship, whenever I have the opportunity.”[99]

Unfortunately for Jeidels, what remained of his life was insufficient for this planned personal opportunity to materialize. His untimely death also left unanswered whether his cosmopolitan realism would serve him well in the post-war years. In some sense, he got through the Nazi years relatively unscathed. Most of his family and many close friends, though not all, were still alive. He continued working in a country for which he had a clear but unexplained affinity. But unlike Siegmund Warburg and Hermann Josef Abs, who survived and thrived after the war, Jeidels no longer had a clear home and strong institutional ties in or outside of Germany. His distance from his Jewish roots, flight from Germany, his age, and above all his ambiguous ties to National Socialist economic preparations for war raised the question at least of where and how he would once again play a role in international finance and politics.

Notes