Although the Jewish Free School was disbanded in 1825, Bildung
continued in new forms. Inspired by Goethe's concept of the cult of personal friendship, Jewish intellectuals advocated for a continuous process of self-cultivation and the pursuit of a Jewish identity separate from rabbinic Orthodoxy. In contrast with the Gentile population of Prussia and Austria, the German-speaking Jewish emphasis on a university education was profound. In Prussia of 1906-1907, only 8% of all children went beyond elementary school. However for Jewish children, the figure rose to an average of 59%, although the numbers in major cities far exceeded the average which included towns and rural areas. Thus the total percentage of Jewish children pursing education beyond elementary school was 67% in Berlin, 86% in Frankfurt am Main and 96% in Hamburg. The statistics recount a similar narrative for Vienna, where in 1912 there were 5,605 Jewish students in college-bound high schools, comprising 47% of all attendees.
For other Jews, pursuing integration and acculturation meant abandoning their Jewish identities entirely or converting to Catholicism and/or Protestantism. Jakob Thon reported in 1908 that, based on statistics compiled from the five censuses taken in Vienna during 1869-1910, there had been over nine thousand conversions of Jews in Vienna in the period from 1868 to 1903, mostly of Jews younger than thirty. It was commonly assumed that these were young Jewish men converted in order to satisfy their career ambitions, but love may also have been a factor as Austrian law required either conversion to Catholicism or Protestantism or for the partners to have legally left their religions as a pre-condition for intermarriage. Thon's study revealed that women often represented half or more of the annual totals, and that in working class districts like Ottakring, many of the conversions were of widowed Jewish men who pursued second marriages to their Gentile cooks or housekeepers out of loneliness. Regardless of the cause, the number of conversions alarmed many Viennese Jewish leaders, particularly local Zionists who demanded that the Viennese Jewish Community (Israelitische Kultusgemeinde
) publish the names and addresses of those leaving Judaism in order to pressure those individuals as well as informing family members.
None of the Dichter clan converted; rather the family pursued a modern, acculturated form of Jewish identity. Walter recalled observing Jewish holidays and maintaining kosher food laws by having one set of dishes for meat and another for milk products. In Bad Sauerbrunn, meals were taken in the Weiss Restaurant nearby, the sole kosher establishment in the area, rather than use the kitchen at the summer home. But his family also sported the latest Viennese fashion styles, listened to popular and classical Viennese music and attended local Austrian schools.
The photo above illustrates the generational differences in Walter’s family – great-grandfather Salomon Dichter maintained the Jewish traditions of wearing a head-covering and donning a long, full beard. His son Leopold had shaved off the religiously-required beard in favor of a more modern mustache. Leopold’s eldest son, Isidor, wore wire-rimmed glasses and no facial hair, and Walter, sat wearing a double-breasted outfit.
Walter remembers the family attending services in observance of Jewish holidays, at the synagogue at 8 Hubergasse in Ottakring.
Another successful Jewish businessman, Moritz Kuffner, who owned a brewery in the area, donated the land in the 1880s. Architect Lugwig Tischler designed a two-story edifice with a Renaissance façade, capable of seating for 406 men in the three-aisled downstairs and 266 women in the upstairs gallery. Walter celebrated his Bar Mitzvah there in 1933, under the supervision of longtime Rabbi Julius Max Bach.
And so Walter Arlen was raised in this modern, acculturated Viennese Jewish household, performing songs at the Department store and spending happy summers in Sauerbrunn. In 1934, the family celebrated the grand opening of their newly remodeled Dichter Department Store, designed by architect Philipp Diamantstein. The streamline moderne design gave the store a sleek new look that echoed the finest new buildings in Europe. The days of hanging pots and pans around the Dichter entryway were gone.
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Julius H. Schoeps, “Chevrat Chinuch Nearim; Die jüdische Freischule in Berlin,” Zeitschrift für Religions- und Geistesgeschichte
, Vol. 53 No. 3 (2001): 274-277.
Monika Richarz, “Occupational Distribution and Social Structure,” in Michael A. Meyer (Ed.), German-Jewish History in Modern Times,
Vol.3 (New York: Columbia University Press, 1997): 55. 
Ivar Oxaal and Walter R. Weitzmann, “The Jews of Pre-1914 Vienna; An Exploration of Basic Sociological Dimensions,” Leo Baeck Institute Yearbook. Vol. XXX (1985), pp.411-415. 
Pierre Genée, Wiener Synagogen 1825-1938 (Wien: Löcker, 1987): 76-77.