The American banker and banking theorist Paul Moritz Warburg (1868-1932), as spokesman for the large bankers of America, favored a highly centralized banking system. In much modified form, this became the Federal Reserve System.

Born in Hamburg to an aristocratic Jewish family of rabbis and merchants who had engaged in banking and commerce in Europe for nearly 300 years, Paul Warburg was educated in a realgymnasium and served an apprenticeship in a Hamburg mercantile house. Completing his commercial education in London and Paris banking houses, he went around the world in 1893 to learn international finance. While in the United States, he married the daughter of one of the partners in the large New York investment banking firm of Kuhn Loeb and Company. On his return to Germany he was admitted as a partner in the family banking firm in Hamburg.

In 1902 Warburg accepted a partnership in Kuhn Loeb and...