Money and Power (15 page)

While admitting he was a “dyed-in-the-wool Republican” he was also “resentful” of Roosevelt’s “attitude” toward bankers and Wall Street in 1929. “
Not that I didn’t realize as much as any man the errors in judgment and mistakes that were made,” but Roosevelt “knew enough men” on Wall Street that “his shattering attack on business as a whole, I thought, was entirely unjustified.” Sachs said Roosevelt “must have known in his heart of hearts” that the men on Wall Street, many of whom Roosevelt knew from school and elsewhere, “may have been subject to poor judgment or been carried away by waves of the speculative era, but he must have known that we meant to do the right thing. Those are the things that I couldn’t quite forgive him.”

Reflecting back, though, Sachs said “
maybe it was partly my own fault” and “maybe I should have sought him out the way my partner Weinberg did, who was a Democrat for a while.” These choices made, Weinberg went to Washington to help Roosevelt with the war effort and Sachs stayed in New York to hunker down and to run Goldman Sachs—not that there was much business to be done during America’s involvement in the Second World War, or in the year or so leading up to it.

In short order, Weinberg took on more and more responsibility at the OPM, becoming head of the OPM Industry Advisory Committee designed to help streamline the process of manufacturing goods needed in the war effort. But he also came in for his share of partisan criticism.
Time
magazine accused him of being “small” and “gossipy” and complained he was “Wall Street’s Walter Winchell,” the creator of the gossip column. In February 1942, the
New York Times
profiled Weinberg in a more laudatory way, suggesting that his appointment as Nelson’s aide was “tantamount to a guarantee that if finance and industry really want to do a job they will receive a fair hearing.” The newspaper recounted his
Horatio Alger rise to fame and riches at Goldman and described how his collection of the letters, documents, and pictures of
Abraham Lincoln—“one of the largest private collections”—that was kept “in the vaults of Goldman, Sachs & Co.” kept him busy “in spare time, if he has any.” (He also had a collection of Roosevelt
campaign buttons that he later gave the president.) The
Times
explained how Weinberg was now “hustling around for the War Production Board just as he did in private life for his own organization.”

For much of Weinberg’s time in Washington, there was considerable confusion about just what his responsibilities were first at the OPM
and then at its successor, the War Production Board, or WPB. “
Every time I went to a meeting with Nelson, this fellow would be there,” according to Weinberg’s friend General
Lucius D. Clay. “He had no apparent responsibility, and I kept wondering why Nelson had him around. Then I realized he was acting as a counsellor and adviser—as a Minister without portfolio, you might say. That’s the way Sidney likes to operate—in a little back office, as somebody’s assistant.”

Despite his efforts to stay in the background, Weinberg did—briefly—get a dose of unwanted attention when Senator Harry S. Truman (D-Missouri) accused him of favoring the big corporations—where he had served as a director—in the procurement and production process over smaller businesses. Weinberg told Roosevelt he “
resented” Truman’s accusations and “having his motives impugned” and was “going to quit.” But Roosevelt talked him off the ledge. “That’s ridiculous,” he told Weinberg. “Look at what they say about me every day.
I
don’t quit.”

His plumage back in place, Weinberg returned to his position at the WPB with renewed enthusiasm. His most crucial role in government, it turned out, was to recruit other businessmen—who would not normally be sympathetic to Roosevelt’s call—to Washington to help with the war effort. He became known as the Body Snatcher. Not surprisingly, given his bias toward persistence, he could be quite persuasive with those executives reluctant to abandon their cushy posts and join the WPB. He would route his calls through the White House switchboard to give them a heightened air of importance. He would also bad-mouth in the business community those executives who tried to avoid his calls or public service. Since business executives generally viewed Weinberg with great respect and affection, this ill will had the desired effect—rather quickly in fact—of getting the recalcitrant executives to return Weinberg’s calls and to enlist in the war effort.

Weinberg’s greatest recruiting coup, many thought, was his snatching of Charles “Electric Charlie” Wilson away from his position as president of
General Electric to join the WPB in 1942. Wilson, who barely knew Weinberg and who had been in his position at GE for only two years, was reluctant to give up the post and move to Washington. Wilson also believed that GE was already so actively involved in war production that his highest and best use during the war would be to stay put, overseeing GE’s work. But after a meeting in Washington with the secretaries of war and of the navy,
Owen Young, the retired chairman of the GE board, told Wilson, “Somebody’s put the finger on you.” When Young relayed to Washington Wilson’s preference for staying at GE, the message came back that Roosevelt wanted to meet with Wilson at the White
House. That did it. Wilson signed up. “Sidney Weinberg never materialized in any of the negotiations involving me,” Wilson said later. “But I could see that
somebody
had put the heat on, and I knew from conversations I had later with Roosevelt and members of the Cabinet that Sidney had had a hell of a lot to do with it. I wasn’t in Washington very long before I realized that a good many other people around were there because of Sidney, too.”

After Independence Day 1943, Weinberg submitted his resignation to Nelson, effective August 1. Without elaboration, Nelson told the
New York Times
that Weinberg resigned “on the advice of physi
cians who have ordered [him] to obtain rest and medical treatment.” He returned to New York and to his post at Goldman.

Whether Weinberg was genuinely ill or whether this was a cover to allow him to pursue his next assignment for the U.S. government is not clear. On November 5, 1943, at the request of William J. Donovan, the New York lawyer and head of the
Office of Strategic Services, Roosevelt approved the appointment of Weinberg to go to “Russia openly as the representative of the OSS,” assuming “Mr. Weinberg can be persuaded to go.” Roosevelt initialed Donovan’s request—“O.K. FDR—11/5/43”—and returned the memo to Donovan. Even though Weinberg was Jewish and spoke no Russian, or so he had earlier claimed, this time he took on the assignment. What he did in the
Soviet Union for the U.S. government—and how long he was there—is not known. The CIA, the successor to the OSS, did not respond to a Freedom of Information Act request seeking information about Weinberg’s mission. One of his grandsons,
Peter Weinberg, a former Goldman Sachs partner and the founder of
Perella Weinberg, a boutique investment bank, was not aware of what his grandfather did in the Soviet Union during the war or even that he had gone there.

Regardless of his secret mission and what he did on it, Weinberg returned, apparently at the request of Roosevelt, to the WPB—this time as vice chairman—in June 1944, eleven months after he left, supposedly for health reasons. His job this go-around was to handle “special problems” for Nelson and to once again act as the Body Snatcher to fill executive positions at the WPB. But his true mission was to see if he could end the public feuding between his two former clients—“Electric Charlie” Wilson and
Donald Nelson. The two men’s public disagreements stemmed from a dispute about when to reconvert the country’s industrial production to public consumption from wartime consumption. Thinking the war almost won, Nelson wanted to revert back to manufacturing for consumers. Wilson, citing the judgment of the
Joint Chiefs of Staff that
an ammunitions shortage was looming, wanted to keep the country’s industrial production focused on the war.

Weinberg sided with his friend Wilson over his friend Nelson and then was criticized for “
stabbing his old friend Don Nelson in the back,” according to
Fortune
. “Not so, states Weinberg. What he thought of Nelson’s actions, in this instance, he told him, in anguish and bald
Brooklynese, to his face.” By August 31, Weinberg’s latest mission was over. “
I have just learned, with real regret, of your resignation from the War Production Board,” Roosevelt wrote to him. “I am indeed sorry to see you go and I want to send you this little personal note to tell you how very much I appreciate the many sacrifices you have made in order to serve the Government during these trying days. You have done a grand job and I am grateful to you.” Weinberg later made light of the dispute with Nelson and chalked up his departure to boredom. “
There was less and less real work for me to do,” he said. “In the winter I was reading important papers until eight p.m. Last spring, I’d be finished by three. When I was done by ten a.m., I knew it was time to resign in Washington and return to New York.” Just over two years later, in September 1946, President Truman awarded Weinberg the Medal for Merit for “outstanding services” for his role working at the War Production Board.

——

B
Y THEN
, W
EINBERG
had returned to Goldman, just in time for the firm to celebrate its seventy-fifth anniversary. To mark the occasion, the firm held a dinner at the
Pierre Hotel on Fifth Avenue (now the Pierre) for the partners and employees. At that time, Goldman had eleven partners, including Walter and
Howard Sachs and Weinberg, and branch offices in Boston, Philadelphia, Chicago, and St. Louis. Despite the firm’s many successes to that point—many of them thanks to Weinberg’s perspicacity and determination—Goldman was still a firm on the outside of Wall Street looking in, like many of the predominantly Jewish firms.

Anti-Semitism continued to complicate the calculus of doing business. But mores were changing, too, albeit slowly. One morning after Weinberg’s friend Paul Cabot had dinner with Weinberg and another man at the exclusive Brook, a club on East Fifty-fourth Street, the acting president of the club came over to Cabot’s table as he was eating breakfast to tell him it had been “inappropriate what he had done the night before.”

“Did we speak in too-loud voices?” Cabot asked him, knowing full well to what the man was referring.

“Oh, no, it wasn’t that,” came the reply. “It was the
individuals
at your table.”

“What’s your exact meaning?” Cabot demanded to know.

“You know we don’t accept Jews at the Brook,” the man said.

“Well,” Cabot replied, “I’ve read the by-laws and there’s nothing on the subject there.… If that’s the way this club is to be run, you can stick your club you know where. You will have my resignation this very morning.”

After the dispute with Nelson, Wilson went back to
General Electric as a top executive. Weinberg’s reward for his loyalty to Wilson was nearly immediate when GE appointed him to its board of directors in June 1945. No board was more prestigious at that time, but it would be years before his spot there would translate into business for Goldman Sachs.

The
Korean War further enhanced the relationship between Wilson and Weinberg. In 1950, President Truman asked Wilson to head up the
Office of Defense Mobilization, a new version of the WPB. Once again, Wilson was reluctant to give up his post at GE because he felt if he left again he would have to leave the company for good, in fairness to the management team. He asked Weinberg, the board director and Wilson’s friend, what to do. “Sidney spoke right up, as he always does,” Wilson recalled. “ ‘Hell you’re going to go,’ he told me. ‘Of
course,
you’ll go. And I’ll go with you.’ That made up my mind.” Once again, Wilson and Weinberg returned to Washington—for six months—to remobilize America’s war machine.

But this time, the country was less passionate about the war effort, as Wilson and Weinberg figured out quickly. On their first day in Washington for the new assignment, in December 1950, there was no one around to let them into their offices at the Old State Department Building. So they pulled up a couple of chairs and sat in the corridor outside their offices and began to sketch out the plan for the defense mobilization effort. For months, they were inseparable, sharing a suite at the Shoreham Hotel and having lunch together in a small private dining room near their offices. But “it was a tougher task than either of them experienced in
World War II,”
Fortune
reported. “The political atmosphere was hostile, the press was waspish, the response of industry was somewhat grudging.” They had their victories—for instance, the decision to produce more than just weapons—but “this whole chapter seems, in some strange way, to have slipped off the pages of history.”

In 1952, Weinberg had once again changed his political leanings and agreed to serve as the treasurer of the
Citizens for Eisenhower-Nixon. This was a splinter group, especially when compared with the powerful
Republican National Committee. At one point, Weinberg and
John Hay Whitney, another leader of the citizens committee, agreed to a rapprochement with the RNC. To get the deal done, Whitney—who had been meeting with the party’s leaders in Cleveland—called Weinberg at home at two-thirty in the morning seeking his advice on some concession or other. Weinberg advised Whitney to make the deal. “
Jock, if they cut us down, we got to go along,” Weinberg told him. “I learned long ago that if you’re born a pygmy, you got to live a pygmy.”

It was a good deal for the Republicans, given the staggering amount of money Weinberg was able to raise. “Without any doubt, Sidney is the best money-getter I’ve ever seen,” Whitney said. “He’ll go to one of his innumerable board meetings—General Foods, or
General Electric, or General Whatever—and makes no bones about telling everybody there what he wants. Then he’ll say, ‘Come on boys, where is it?’—and up it comes.” In return for all this fund-raising, Weinberg got what he really craved—unlimited access to power.

After Eisenhower’s election, the president-elect surrounded himself with three trusted advisers:
Sherman Adams,
Herbert Brownell, and General Lucius Clay. Weinberg, of course, knew Clay from the Second World War, when Clay was in charge of procurement for the army. In 1950, Weinberg had also recommended Clay to be the chairman and CEO of Continental Can Company, where Weinberg had been a director since 1930. Early one afternoon after the 1952 election, Adams, Brownell, and Clay were meeting together at the
Commodore Hotel, in New York, for the sole purpose of figuring out whom they should recommend to Eisenhower for treasury secretary. By three o’clock that afternoon, after going around and around making little progress, Clay called Weinberg in his Goldman office at 30 Pine Street and begged him to recommend someone in the next two hours. Weinberg no doubt had already been giving the matter some thought and continued his thinking as he hopped on the subway—his preferred mode of transportation—to meet the men at the Commodore, on Forty-second Street. (Weinberg used to proudly tell his partners he saved five dollars a week by taking the subway.)