Born in Germany in 1901, Ernest Berg, the eldest of six children living near Cologne, took responsibility for his family's support after WWI. Germany emerged from the chaos of war when Ernest, and his brother, Alfred, decided to leave home to build a new existence in America. The brothers crossed the continent and worked their way eastward, subsidized by writing articles about their travels. In India, they took a freighter towards the U.S. that made a stop in Manila. He was attracted not only by the far Eastern Pearl but also by a lovely woman, Fe Mandelbaum, an American Mestiza.

Soon Berg started his first business, the Red Star Auto Stores, which quickly grew to a chain of 32 branches spread throughout the Philippines.

At that time, Escolta Street had evolved from its modest origins into the premier shopping precinct in Manila. It was full of professionals' offices: lawyers, optometrists, and retail stores such as Heacock's, Riu Hermanos, and Estrella del Norte. The Crystal Arcade, the Manila Stock Exchange, more offices, and retail shops were built. The business was booming, and Ernest Berg got hold of an attractive corner location of Escolta and Calle David. Ernest and his brother opened the department store called Berg's.

After the Japanese attack on the Philippines in 1941, Berg was allowed to continue his business because of his German nationality.

The Battle of Manila, what was once "The Pearl of the Orient," was destroyed. The beautiful Escolta, with its fine stores and buildings, was almost totally destroyed. The Bergs tried to reconstruct their business, but they quit and sold the department store after a few years.