"Coldest of Cold Blood"

Private fulminations and public carpings against the New Deal have become almost a routine of the business day. But only one banker has made himself notable for his self-dedication to the job of serious argument: James Paul ("Jimmy") Warburg, 38, author, smart son of a smart father, librettist husband of a tuneful wife, vice chairman of Bank of the Manhattan Co. Last week in Buffalo, Jimmy War burg concluded, with these words, the ablest of his many speeches:

"I do not hesitate to say to you that if we . . . go in for a system of Government-owned and operated banks, we shall have passed the sentence of death upon all private business, upon all private capitalistic enterprise and upon our political, social and economic freedom. That may sound like a somewhat hysterical statement. I assure you that it is made in the coldest of cold blood."

It is small pleasure for Jimmy Warburg to spend his talents thus attacking a liberal Administration. In the early days of the New Freedom, one of Woodrow Wilson's closest advisers was a German-born banker who gave up his rich private business to serve four years as a member of the first Federal Reserve Board. As Carter Glass is known as the father of Federal Reserve legislation, so the late great Paul Moritz Warburg is revered as the father of the Federal Reserve System.

Twenty years later his son, also German-born but brought to the U. S. as an infant, was a trusted adviser to another crusading Democratic President. In the first dizzy months of the New Deal, Jimmy Warburg was the only banking adviser the President had. The quick-witted, versatile young millionaire was no traditionalist himself. He admitted that silver might be useful. He recognized a maldistribution of wealth. Fact was, on all social questions he hewed close to the Roosevelt line. But, with nearly a century and a half of banking tradition behind him, Jimmy Warburg could not continue under a chief who upset the London Economic Conference (TIME, July 17, 1933).

Since leaving Washington, he has written two books, The Money Muddle and It's Up to Us, just published. He has swapped punches with Father Coughlin, written articles, spoken his mind from a dozen platforms.

''The case against private banking," he summed up in Buffalo last week, "falls into two parts: the private banking system has failed and, therefore, Government banking is the answer. Both are wrong. Our particular kind of private banking system failed under certain particular circumstances. That is perfectly true. But that is quite different from saying that private banking as a whole has failed. And if private "banking as a whole had proved itself inadequate, which it has not, then it still would not follow that Government banking would be any better."

No mere fulminator, Banker Warburg called upon his fellow-bankers to take a hand in their--and their country's--destiny: "If the private banking system is to survive, it is essential that our banking laws be thoroughly overhauled and brought into conformity with . . . present-day economic life. . . . Bankers have been far too intimidated by the demagogic crusade against them. . . . It does not matter whether they receive a cordial reception in Washington or not. As yet we have the right of free speech and a free Press, and there are more ways of getting the right kind of legislation passed than by lobbying in the halls of Congress."

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