The Warburgs appear in the 16th century as “Court Jews” in the town of ‘Warburg’ between Frankfurt, and Hamburg from which they got their name (Warburg). Not allowed, by German law at the time, to have surnames of their own. Forbidden also to own land or carry on everyday trades, the trade of the Jews became the handling of money, as lenders at interest and dealers in foreign exchange.
Money was the one thing that could make up for the stigma inflicted on the Warburgs; and money was the one trade that Christian society would let them pursue. The Warburgs were thus concentrated in a role that made them alien, resented and indispensable; and in the most dynamic and mysterious sector of the modern economy, finance, a dangerous niche to occupy.
When Warburgs moved into Hamburg in the seventeenth century and set up as International Bankers they became doubly marginal. The problem for traders was always whether you could trust their foreign counterpart; only Jews, not having a real country of their own, could reliably do business with their co-religionists across national boundaries.
Their exclusion from the mainstream made them ideal go-betweens, with a global view of the opportunities arising as Germany unified itself, and Hamburg became its principal port. M.M. Warburg & Co. thrived as a private bank, deeply involved both in trade and in the German industrial revolution. When more capital was needed, young Warburg men were married into other wealthy Jewish families, who gave dowries with their daughters.
By 1914 M.M. Warburg was the leading German commercial bank, and the family was also well established on Wall Street. Felix M. Warburg and his brother Paul both married into Kuhn, Loeb and settled in New York. Paul, a brilliant monetary theorist, masterminded the belated foundation of an American central bank, the Federal Reserve, in 1913. The American Warburgs did not establish a major financial business in their own name. They blended securely into the American establishment.
The Warburg family originally came from Italy in 1559, and this Jewish family, known in Italy as Del Branco, took the German name Warburg from the city of Warburg. In 1798 the Bank M. M. Warburg & Co. of Hamburg was founded. Simon Elias Warburg went to Sweden (1760-1828), where he founded the first Jewish community in that nation, his grandson Frederik Elias Warburg (1832-1899) moved to England and was a cofounder of the Central London Electric Railway. Other Warburgs moved to Copenhagen in Denmark, and took the original name Del Branco.
Paul Moritz Warburg (1868-1932) moved to the United States in 1902 and became a member of the biggest Jewish bank in the United States, Kuhn, Loeb and Co. of New York. Felix Moritz Warburg (1871-1937) also moved to the United States and joined Kuhn, Loeb & Co. as a partner. Fritz Moritz Warburg (1879-1964) moved to the United States.
The Warburg bank was tied in with the Rothschild bank, and the reason for Paul Warburg to move to New York, was to work for the establishment of an "AMERICAN CENTRAL BANK." Working at Kuhn Loeb and Co. Paul Warburg lectured and worked on American politicians until the Federal Reserve act was passed on December 23, 1913 and Paul Warburg became its chairman.