None Dare Call It Conspiracy

The "panic" which Morgan had created, he proceeded to end almost single-handedly. He had made his point. Frederick Allen explains: "The lesson of the Panic of 1907 was clear, though not for some six years was it destined to be embodied in legislation: the United States gravely needed a central banking s y s t e m‌" The man who was to play the most significant part in providing America with that central bank was Paul Warburg, who along with his brother Felix had immigrated to the United States from Germany in 1902. (See Chart 4.) They left brother Max (later a major financier of the Russian Revolution) at home in Frankfurt to run the family bank (M. N. Warburg & Company).

Paul Warburg married Nina Loeb, daughter of Solomon Loeb of Kuhn, Loeb and Company, America's most powerful international banking firm. Brother Felix married Frieda Schiff, daughter of Jacob Schiff, the ruling power behind Kuhn, Loeb. Stephen Birmingham writes in his authoritative Our Crowd: "In the eighteenth century the Schiffs and Rothschilds shared a double house" in Frankfurt. Schiff reportedly bought his partnership in Kuhn, Loeb with Rothschild money.

Both Paul and Felix Warburg became partners in Kuhn, Loeb and Company.

In 1907, the year of the Morgan-precipitated panic, Paul Warburg began spending almost all of his time writing and lecturing on the need for "bank reform." Kuhn, Loeb and Company was sufficiently public spirited about the matter to keep him on salary at $500,000 per year while for the next six years he donated his time to "the public good."

Working with Warburg in promoting this "banking reform" was Nelson Aldrich, known as "Morgan's floor broker in the Senate." Aldrich's daughter Abby married John D. Rockefeller Jr. (the current Governor of New York is named for his maternal grandfather).

Chart 4 FEDERAL RESERVE Nina Loeb PauIWarburg Max Warburg Kuhn, Loeb & Co. Jekyl Island Felix Warburg Nelson Aldrich Freida Schiff Frank Vanderlip HenryDavison