ELEVEN
Sidonia had foreseen . . . that, after the exhaustion of a war oftwenty-five years, Europe must require capital to carry on peace.He reaped the due reward of his sagacity. Europe did requiremoney, and Sidonia was ready to lend it to Europe. Francewanted some; Austria more; Prussia a little; Russia a few millions. Sidonia could furnish them all . . . It is not difficult toconceive that, after having pursued the career we have intimated for about ten years, Sidonia had become one of the mostconsiderable personages in Europe. He had established abrother, or a near relative, in whom he could confide, in most ofthe principal capitals. He was lord and master of the moneymarket of the world and of course virtually lord and master ofeverything else. He literally held the revenues of Southern Italyin pawn; and monarchs and ministers of all countries courtedhis advice and were guided by his suggestions. He was still in thevigour of life, and was not a mere money-making machine. Hehad a general intelligence equal to his position, and looked forward to the period when some relaxation from his vast enterprises might enable him to direct his energies to great objects ofpublic benefit. But in the height of his vast prosperity he suddenly died.
—DISRAELI, CONINGSBY
A Wedding and a Funeral
On June 15, 1836, a wedding took place in Frankfurt. The bride was Carl’s daughter Charlotte. She had turned seventeen just two days before and was, it was generally agreed, rather beautiful. Her future mother-in-law—an exacting judge—found her as “beautiful as members have already said and her manner agreeable,” “simple and amiable.” This was not just familial pride. When Benjamin Disraeli met Charlotte for the first time the following year, he was struck by her “tall, graceful, dark, and clear” looks: “picturesquely dressed [in] a robe of yellow silk, a hat and feathers, with a sort of “Sévigne” [bandeau] beneath of magnificent pearls,” she looked “quite a Murillo” and was “universally admired.” The two characters in his fiction which she later inspired—Eva Besso in Tancredand Mrs Neuchatel in Endymion—are both fascinating and exotic beauties, especially the former:
That face presented the perfection of oriental beauty; such as it existed in Eden, such as it may yet occasionally be found among the favoured races in the favoured climes . . . The countenance was oval, yet the head was small. The complexion was neither fair nor dark, yet it possessed the brilliancy of the north without its dryness, and the softness peculiar to the children of the sun without its moisture. A rich subdued and equable tint overspread this visage, though the skin was so transparent that you occasionally caught the streaky spleandour of some vein like the dappled shades in the fine peel of beautiful fruit. But it was the eye and its overspreading arch that all the Orient spake . . .
Her groom—and also her cousin—was Nathan’s eldest son Lionel. He was twenty-seven, and already an experienced businessman, having recently played a pivotal role in his father’s intricate financial operations in Spain. To judge by his letters, he was a rather solemn, serious young man, conscious already of his daunting responsibility, as the eldest son, to preserve his father’s remarkable financial achievements; but also increasingly aware of a more general obligation to advance the cause of Jewish emancipation not only in England, where he had been born and brought up, but throughout Europe. He was presentable, if not handsome, and not a little amorous.
For weeks the women of the family in Frankfurt had been preparing for the great event: Gutle, the betrothed couple’s grandmother, now aged eighty-two; Eva, her eldest son Amschel’s wife; the bride’s mother, Adelheid; as well as Lionel’s eldest sister Charlotte, who had married her cousin Anselm ten years before, and was now bringing up their three children, with another on the way. The Rothschild houses in Frankfurt were being vigorously “washed and cleaned” in preparation for the anticipated round of family dinners: Amschel’s house, with his beloved garden, in the northern suburbs of the town; his elegant town house on the Zeil; Anselm’s newly acquired “palace” in the Neue Mainzer Strasse; and the more modest house in the same street used by Carl and his family when they were in Frankfurt rather than Naples. The original family home in the former Judengasse—where Gutle stubbornly continued to live, despite her sons’ great wealth—seems not to have been considered a fit venue for the festivities.
Of the London-based Rothschilds, Lionel himself was among the first to arrive; his youngest brother Mayer was already there, as he was in the process of completing his studies in Germany. Their father set off from London at the beginning of June, accompanied by his wife and two unmarried daughters, the vivacious Hannah Mayer and the musically inclined Louise. Left behind in London to mind the office at New Court was Nathan’s third son, Nat. His other son Anthony was in Paris, where he would perform the same deputising role when his uncle James also left for Frankfurt. This he did on June 4, preceded by his wife Betty and their four young children: Charlotte, the eldest at eleven, Alphonse, Gustave and the baby Salomon James. They arrived in Frankfurt eight days later. Just before them, James’s brother Salomon had arrived from Vienna accompanied by his son Anselm. While they naturally stayed at the house in the Neue Mainzer Strasse where Anselm’s wife Charlotte and the children awaited them, the less frequent visitors to Frankfurt had to be put up in hotels: the London Rothschilds were booked into the Römische Kaiser, the Paris Rothschilds stayed at the Russische Hof, and the Montefiores—doubly related to the Rothschilds by marriage—in the Englische Hof. Altogether, by the time all had assembled, there were around thirty-six Rothschilds in Frankfurt. Perhaps not surprisingly, there were few other guests: the only “outsiders” referred to in the surviving correspondence are Mayer’s tutor, Dr Schlemmer, and the composer Gioacchino Rossini, a friend of both James and Lionel, whose role was “to add to the gaiety of our party.”
Left alone in charge of the Paris office for the first time, Anthony felt ill at ease, though this was a consequence more of boredom than of the burdens of responsibility. “Am not in good spirits,” he complained to his brother Nat, similarly situated in London. “Nothing is so disagreeable than to remain alone. Everything is uncommonly flat . . . How do you amuse yourself quite alone? You are better off than I am for here they have all gone and shut up the house, so I dine every day at a Cabaret [tavern].” The Paris market was in the traditional summer doldrums, and his uncle James’s advice from Brussels—where he and Nathan had stopped briefly on business—had scarcely been an encouragement to undertake new business:
In my opinion you should try to leave everything alone until your good father returns, and if anyone should put a proposal to you, you should reply that you will first have to consult your father, and you will thereby gain some time and some peace and quiet. Don’t take any of this to heart and take my advice, hold on to your money and don’t spend any of it.
Nat, by contrast, was under pressure, for his father preferred to keep his sons busy in his absence. No sooner had he arrived in Frankfurt than he despatched a characteristically restless letter, not only urging Nat to buy this security or sell that, but also exerting an indirect pressure on his brother in Paris:
You must always put Anthony in the way of selling, as he belongs to the Bull party and does not like to sell until you have made some few purchases, therefore when the prices are low you can buy a little and encourage Billy [Anthony] to do business and write to him at the same time, that you are pleased and satisfied with his remittances and with everything he does. I have written to him, that every day he must do something whatever may be the price, the same you can write to him.
A few days later—before James himself had arrived in Frankfurt—Nathan wrote directly to Anthony telling him “to keep business going” and “keep yourselves occupied.” Neither he nor Nat could feel comfortable on receiving such contradictory instructions from their father and uncle.
Lionel too was faintly disgruntled. He was impatient to be married. Though the match was an arranged one, intended primarily to strengthen the links between the London and Naples branches of the family—and to prevent precious family capital going to outsiders—he had fallen in love with his future wife, or at least had persuaded himself that he had. He was also eager to leave Frankfurt. As he put it to his brother Anthony, he was “heartily glad the day for me quitting beautiful Frankfurt will soon be here”; for, like all the younger Rothschilds who had grown up in England, he found his father’s birthplace not only tediously provincial but also socially uncomfortable, in that the generality of Jews in Frankfurt were still subject to more legal discrimination than their counterparts in London or Paris, even if he and his family were to some extent exempted. His unease was only increased by his father’s late arrival from Brussels, and by every subsequent delay.
Besides the wedding itself, there were two ulterior motives for this large family gathering—one of the biggest Rothschild conclaves of the nineteenth century, and without question the most important. Lionel’s marriage to Charlotte was not the first endogamous marriage in the family’s history: as we have seen, their uncle James had married their cousin (and his own niece) Betty in 1824; and Anselm had married his cousin Charlotte two years later. More—many more—such intermarriages were to follow. The only question, as Lionel put it, was “how the younger branches of the family will agree”; or, to be precise, who would be paired off with whom. This was the real reason for the presence in Frankfurt of the numerous younger siblings and cousins: they were being assessed for their potential compatibility. Thus Carl’s son Mayer Carl was tentatively identified as a suitable match for Lionel’s youngest sister Louise; Louisa Montefiore was discussed as a possible wife for Anthony; Joseph Montefiore was spurned by both Hannah Mayer and Louise; and their brother Mayer ruled out as a husband for James’s Charlotte. The marriage market evidently provided more entertainment for mothers than for daughters: Hannah Mayer complained of “dreadful tedious long dinners every day” punctuated by German and embroidery lessons. “Only fancy,” wrote a dismayed Louise to her brother in London: “to be seated as I am sometimes betweenGrossmutter and aunt Eva and to be stuffed so full as scarcely to be able to breathe.” The tedium was relieved only by her daily music lesson with Rossini.
The third reason for the family gathering—and the most important—was business. Accustomed though they were to reaching major business decisions on the basis of their regular correspondence, even the five Rothschild brothers sometimes found face-to-face meetings indispensable. In the years before 1836 James had often crossed the Channel to meet Nathan, and Nathan had sometimes reciprocated; Salomon, the most peripatetic of the five, had been a frequent visitor to Paris and still travelled back and forth regularly between Frankfurt and Vienna; while Carl too divided his time between Naples, where he did business, and Frankfurt, where he preferred to educate his children. Yet the regularity of such shuttling had declined over the years as the brothers had aged, and as their business and family commitments in their respective places of residence had increased. The last time all five had met together had been in 1828.
The most important item on their agenda in 1836 was nothing less than their future relations with one another. Since 1810, as we have seen, the house of Rothschild had been a partnership, based primarily on a detailed, legally binding contract as well as on the wills of the various partners, which determined how individual shares in the firm would be passed on to the next generation. It had been the custom to revise and renew the partnership agreement every few years: thus there had been new contracts in 1815, 1818, 1825—when Salomon’s son Anselm had been admitted as a sleeping partner—and 1828, when he had become a “real Associé.” Since then, Nathan’s three elder sons, Lionel, Anthony and Nat, had all entered the firm to serve their financial apprenticeships. By 1836 Nathan felt his eldest son was ready to become a partner on the same footing as Anselm; and it was primarily to agree the terms of his elevation that the brothers now met.
Apart from the new partnership agreement, there were other matters which the brothers needed to discuss. The year 1836 was critical in the history of their operations in Spain, where a bloody civil war was raging; and there were also important transactions afoot with respect to Greece, Naples and Belgium, all countries in which the brothers had a financial interest. In addition, three of the brothers had recently begun to involve themselves in an entirely new line of business: the financing of railway construction. James in particular was deeply embroiled in battles for control of the fast-developing French rail network—business which to some extent depended on his access, through Nathan, to the larger British capital market. Yet it was far from obvious that Nathan himself approved of this new direction the firm was taking. The first British railway “mania” was reaching its peak in 1836, when no fewer than twenty-nine new railway companies were chartered; but he, in common with all but one of the established London banks, had played no part in it. His preference was for stepping up the bank’s involvement in the United States, continuing to concentrate on making loans to states and financing trade, rather than investing in industrial concerns. Here too, however, there was matter for discussion, not least because of the brewing financial crisis on the other side of the Atlantic, the beginnings of which had begun to manifest themselves (in the form of a monetary tightening in London) on the eve of the brothers’ meeting.
The negotiations went on between the partners in strict secrecy: all other family members were excluded. “They are now all assembled,” reported Lionel to his brother, “that is, the four are alone in [Papa’]s room and we are shut out. Papa I believe said something about our having a share in the London profit. They all seem to let him do as he likes. I do not know . . . whether they think of getting him round by good words and coaxing.” “The Family arrangements go on very amicably,” thought his mother. “There has been no difference.” By June 12 it appeared that Nathan had got his way without the “high words” his son had feared:
Papa proposed that we should have half the profits of the London House and that he should have only half the profit the others make. Everything was agreed to immediately and not a word said. I was not in the room but this morning have heard so . . . I am sure you will be pleased in knowing that they all are pleased with each other and that there have not been any disputes . . . They all are very satisfied with the different cash accounts and did not expect to have seen the Houses so flourishing.
“All parties,” it seemed, were “inclined to keep the peace.” Such fraternal harmony was evidently somewhat unusual. “Till now, thank heavens, there has not been one angry word between the Brothers,” wrote Lionel with evident surprise. “They pass their time at [Papa’s room] and the [counting] house, and dine altogether at one of the three houses quite en famille.” It was one of the rare occasions when the five brothers lived up to the first of the three ideals enshrined in their adopted motto: “Concordia.” The Frankfurt artist Moritz Daniel Oppenheim captured this mood of harmony in the portraits he painted of the five brothers to mark the occasion.
Only one shadow hung over the brothers’ deliberations and over the nuptial preparations beyond their closed doors; and that was the fact that Nathan Rothschild was dying. Or rather he was ill; for no one could conceive that the man who, since the death of his father in 1812, had been the unquestioned leader of the house of Rothschild, might die at the very height of his powers. While at Brussels, Nathan had suffered a recurrence of an earlier complaint, probably an ischio-rectal abscess. As his wife put it, he had “again a visit from his most unpleasant visitor, a disagreeable boil in a most inconvenient place and [which] annoys him considerably particularly in sitting down.” His son was more blunt: “Papa has a most terrible boil on his bottom and suffers very much from it. He has not yet been able to leave his bed and has a great deal of pain. The movement of the carriage inflamed it, so that he requires now double rest.”
The final illness and death of Nathan Rothschild is a case study in the inadequacies of nineteenth-century medicine. The German doctors may not actually have killed their patient by their interventions, which aimed, not unreasonably, at draining the abscess; but they inflicted excruciating pain on him, unmitigated by any form of anaesthesia. Shortly after his arrival, an attempt was made to lance the boil, but another swelling quickly formed which “creates the same pain and confinement as the first.” “This, dear Anthony,” reported his distraught wife, “is very distressing as these things are so painful . . . but the doctors assure us of no danger. You know how impatient Papa is if he is ill,” she concluded hurriedly, “and I therefore must go to him.” “The large opening,” Lionel was able to report on June 13, “has been running famously and no other operation, it is expected, will be necessary. Professor Chelius arrived this morning and found both wounds in a much more forward state than he had imagined; in fact he is quite satisfied with the way they are going on and assures us that only time is requisite to see Papa quite restored.” His mother was equally reassured by this “celebrated Professor from Heidelberg, who unites great safeness of manner and incessant attention, with renowned ability” and by his “assurances that there is nothing more forming and the opening [is] going on well.”
Needless to say, Nathan’s illness blighted the wedding celebrations. Although the bride’s parents decided to proceed with the ball they had planned to give on June 13, the bride herself was so “agitated” that she could not attend. Yet Nathan—with the phenomenal resolve which had characterised his whole life—refused to have the wedding postponed on his account. Indeed, he insisted on being present at it. On the day of the wedding, as his wife recorded, “he took courage at 6 o’clock in the morning to get up and walk to Charlotte’s which he effected tolerably and afterwards dressed—and went to Charles’s [Carl’s] to be present at the celebration of the ceremony.” “Everything passed off perfectly well,” the relieved groom was able to report to his absent brothers that afternoon. “Papa was well enough to come . . . and as his complaint is only one that gives pain, it required but a little resolution, of which you know Papa has enough. The ceremony lasted but half an hour and was very solemn . . . [It] went off uncommonly well as Papa was there and our family circle complete.” Indeed, Nathan seems to have gone out of his way to play down his illness, trying “with jokes of every kind . . . to shorten the speech of the worthy Rabbi and to cheer up those present.” It was an act. Immediately after the ceremony, “he was seized with the excessive pain which usually comes on about 2 o’clock and lasts for 6 hours.” Rather than return to the hotel, he was put to bed in his daughter’s house. While the newlyweds departed for a brief twenty-four-hour honeymoon at Wilhelmsbad,1 an increasingly irritable Nathan submitted once again to the surgeon’s knife. Although he bore “all his operations and dressing without a murmur,” he was now worried enough to insist that his doctor and erstwhile neighbour in New Court, Benjamin Travers, be summoned.
For six weeks the family waited in vain for Nathan to recover. By the end of June he was well enough to resume dictating his orders to Nat via Lionel, but the final negotiation of the partnership agreement was postponed—to the evident irritation of James, who complained of eye-ache and longed for the comfort of a spa. Lionel was equally impatient. “Papa is going on pretty well but slowly,” he told his brothers. “Every day we have a family dinner which is long and tedious and all the day long they are running from one house to the other, doing nothing and talking of nothing.” But the doctors continued to open and drain the wounds of “hardness,” “matter” and “fibres” with little sign of real improvement in the long-suffering patient, who sought comfort in “Soda Water, Lavender, Oranges, Arrowroot and fruit” sent by courier from England. “The second [wound] was opened this morning,” reported Lionel on July 9, a month after his father had arrived in Frankfurt. “Papa underwent the operation with the greatest possible courage and all the time made jokes. The wound was larger than the first as the boil was most terribly deep and must have been very painful.” And so it went on, with the gathering financial crisis eerily mirroring the patient’s condition.
Finally, on July 24, Nathan lapsed into a “violent” fever and was plainly “in danger”—probably the onset of septicaemia. The next day, in an agitated and near-delirious state, he summoned his son. “He has this instant called me,” an anxious Lionel wrote to Nat,
to write that he wishes you to go on selling English Securities and Exchequer Bills, as well as £20,000 India Stock more. You are also to send an account of the different Stocks on hand. I do not know if I misunderstood him, but I did not like to ask for an explanation. [He also] said you are to sell . . . the securities that the Portuguese Government has given for the money they owe us, not minding one or two per cent.
To Lionel, such sales across the board—and heedless of losses as large as 2 per cent—seemed so out of character as to be almost incomprehensible. Suddenly conscious that their father was dying, Nat and Anthony prepared to leave for Frankfurt. 2 But on July 28, before they could reach him, his brothers, his wife and the two sons present gathered round what was now unmistakably Nathan’s deathbed.
It was a decisive as well as fraught moment in the history of the firm: for the head of the family was dying before the new partnership agreement had been signed. As Salomon told the Austrian Chancellor Metternich in a letter written less than two weeks after his brother’s death: “The agreements between us for a further period of three years [had] been drawn up, embodying every point, and they were ready for signature, for we still believed that our late brother would, with God’s help, recover. However, this was not to be, fate had decided otherwise.” Yet Nathan had just enough energy left for a final exercise of his domineering will. Salomon described how “three days before his death he told me all his thoughts and wishes with regard to the will which he then drew up, and which I then had written out in accordance with his intentions.” He was not always coherent now: his brothers remarked how he alternated between “more decisive demands” and “utterances already gradually interrupted and obscured by his sufferings.” But his message to the family was intelligible enough. Above all, they were to maintain “harmony, constant love and firm unity”—a conscious echo of his own father’s last words. What that meant in practice he spelt out with characteristic precision.
Firstly, Nathan called on his sons to “carry on in harmony and peace the banking house founded by me under my name in London.” Secondly, he stressed that they were to do so in consultation with his widow: “My dear wife Hannah . . . is to co-operate with my sons on all important occasions and to have a vote upon all consultations. It is my express desire that they shall not embark on any transaction of importance without having previously demanded her motherly advice . . .” Thirdly, he expressed his
earnest wish that the association between my firm in London, now carried on by my four sons, and the other Houses, which my four dear brothers direct, shall be allowed to continue, that they shall continue to remain partners together . . . I thereby recommend my sons in their business always willingly to follow the advice and recommendations of my brothers . . .
Finally, as his brother recalled, Nathan spelt out a series of amendments to the new partnership agreement:
On his deathbed, Nathan asked me to have the contract renewed with his surviving sons, with the provision that it should not be terminated within a period of five years . . . The firm of N. M. Rothschild [thus] remains unaltered, the sons together acting as a unit with one vote in the partnership. The whole trading capital of the four brothers and of the late N. M. Rothschild cannot be touched for the next five years, and nobody can draw anything out of the working capital, while we have reduced the interest that we draw individually from four to three per cent, so that the partnership as a whole will, with God’s help, still further improve its position in the five years, as the proportion of the funds which can be spent has been reduced, and there is no necessity for the young men to be drawn into speculative ventures.
These wishes were duly incorporated in a hastily drafted annexe to the original agreement.
The practical provisions for the future having been made, Nathan proffered some parting advice:
[He] charged his eldest son, and through him all those who were not present, always to apply all their efforts to keep the business property intact and not to participate in any risky ventures. He gave them much wise counsel, bade them avoid all evil company and always to keep in the way of true virtue, religion and righteousness. My late brother told them that the world would now try to make money out of us, so that it behoved them to be all the more careful, and he remarked that, whether any son had £50,000 more or less, was a matter of indifference to him. All that mattered was that they should hold together in unity.
“He died,” Salomon wrote, “in the full possession of his faculties, and ten minutes before his death he said, as he received the last consolations of religion that are customary with us: “It is not necessary that I should pray so much, for, believe me, according to my convictions I have not sinned.” . . . [Then] to my daughter Betty, as she took leave of him, he said in the truly British style, ‘Good night for ever.’ ”
Five days later a carrier pigeon from Boulogne conveyed the news to London in a single, three word sentence: “Il est mort.”
Legacy and Legend
The deaths of only a handful of individuals in the nineteenth century can be said to have had economic effects comparable with those caused by the death of Nathan Rothschild. When the Austrian Emperor Francis had died a year before, there had been a minor panic on the Viennese stock exchange and the price of Austrian government bonds had fallen sharply; but the Rothschilds had intervened to prop up the markets. When Nathan died, by contrast, it appeared that the markets’ strongest prop had been removed. The financial press had been anxiously reporting on Nathan’s health for nearly a week before the news of his death was first published. On July 27 The Times had felt able to report (wrongly) that his condition was “not at all dangerous.” On August 2 it categorically denied reports in other papers that he had died. But, as its “Money Market and City Intelligence” column admitted, opinion in the City was less sanguine:
The dangerous state in which Mr Rothschild remained, by the accounts from Frankfort, has again today had its effect upon Spanish and Portuguese securities, and a further depression of 1½ per cent has taken place with them . . . [I]t seems generally accepted that the firm would call in all the loans advanced upon those securities by Mr Rothschild, and hence the anxiety of the borrowers to dispose of their stock, so as to be in a position to meet the demands upon them. The sales today were extensive, but from the weak state of the market it was, in fact, possible to realize but a limited amount . . . There was very little business doing in the share market. Consols have partly recovered the depression they sustained on Saturday, in consequence of the accounts from Frankfort above referred to, but they do not, on the whole, present a very firm appearance.
When the news of Nathan’s death was finally confirmed the following day, there was—paradoxically—a slight rally, suggesting that the markets had been discounting the event:
Government securities of all descriptions, but more particularly those of the foreign markets, have been falling in value during the week, in anticipation of this event, but its confirmation has had a contrary effect, probably on account of the understanding there is that his business, under the management of his sons, will go on as usual.
However, this was only temporary. For Nathan’s death coincided with, and perhaps also exacerbated, the onset of the international financial crisis which had been developing throughout his illness.
The period from May 1834 until July 1836 had been one of general financial stability. The price of consols had fallen below 90 only in a handful of weeks, and it had been above 91 for the last six months of the period. But from the first week of August—when the news of Nathan’s death broke—until the end of the year, it fell steadily, reaching a nadir of 87 in November (see illustration 11.i). Just days before, on July 21, Bank rate (in effect, the Bank of England’s base lending rate) had been raised for the first time in nine years from 4 to 4.5 per cent; on September 1, it went up by another half point. The Rothschilds’ own profit and loss accounts show that in 1836 the London house suffered its first loss—equivalent to more than 4 per cent of its capital—since the revolutionary year of 1830. These losses very probably accrued in the second half of the year.
Nathan’s Times obituarist—probably his friend Thomas Massa Alsager—was not exaggerating when he called Nathan’s death “one of the most important events for the city and perhaps for Europe, which has occurred for a very long time”: for his “financial transactions [had] certainly pervaded the whole of the continent, and may be said for years past to have exercised more or less influence on money business of every description.” “The variations of all stocks & their wild fluctuations,” remarked Alexander Baring, “seem to arise much from Nathan’s death. In the end the emancipation of the money market will be a benefit, but the sudden cessation of a despotic rule is apt to exhibit such symptoms.” Similar views were expressed some months later in a pamphlet on monetary matters by David Salomons, who described Nathan’s death as “an event of some importance in the derangement of the circulation of the country”:
It is well known with what dexterity that eminent individual managed the exchanges; how he prided himself in distributing his immense resources so that no operation of his own should abstract for a lengthened period the bullion of the Bank of England; and although it may be urged he kept the exchanges in an artificial state, and therefore produced no ultimate good, yet the sudden withdrawal of this artificial aid in an inopportune moment has tended to aggravate evils which his energy and promptitude might have checked. The difficulties which we have been experiencing since his death induce me to think that no one ever displayed greater ability than he did in equalising the exchanges; and I attribute much of the late embarrassment to the loss of that activity, zeal and enterprise, which he always displayed in times of financial difficulty, and although the operations of his important house are continued, it is impossible at once to replace that moral influence which the acknowledged good judgement of the head of that opulent firm had established for himself not only in Great Britain but throughout the whole of the commercial world.
It is understandable, then, that the financial world paid more than ordinary respects to the deceased. As The Times described it, Nathan’s funeral cortège on the morning of Monday, August 8
was headed by a party of the city police four a-breast, followed by an inspector on horseback; next came several other city officers, and these were immediately followed by the hearse. The sons and immediate relations of the deceased followed in mourning coaches; and the whole line of these vehicles consisted of 40, containing numerous branches of the Goldsmid, Cohen, Samuel and Israel families. After the mourning coaches came the carriages of the deceased and his two sons, and behind these the carriages of the Lord Mayor, Mr Sheriff Salomons, and a line of foreign Ambassadors’ and noblemen’s carriages, in all to the number of 35. The whole procession consequently consisted of 75 carriages; and it was more than a quarter of an hour in passing through Cornhill. The crowd of people who had come to this part of the city was so great that many of the shops were shut to protect the windows from the pressure and there was scarcely a window in the line that was not crowded with spectators.
11.i: The weekly closing price of 3 per cent consols in 1836.
The occasion was appropriately commemorated. A lithograph was produced, The Shadow of a Great Man, which depicted in silhouette the already well-known image of Nathan in front of his pillar in the Royal Exchange, holding four keys to represent the succession of his four sons (see illustration 11.ii). This image was reproduced by several different artists, including one of Nathan’s own clerks (see illustration 11.iii).
Just two days after the funeral, the poetaster William Heseltine published his “Reflections at the Grave of N. M. Rothschild Esq.,” verses which tempered formu laic praise of “the Croesus of the Land” with just a hint of realism:
11.ii: Mons. Edouart, The Shadow of a Great Man, published by J. Knight, Standidge and Lemon (August 6, 1836).
11.iii: R. Cullen, SHADOW of the late N. M. ROTHSCHILD ESQ. (1837).
. . . Europe’s kings in adverse hour
Have sought and found thine aid.
More than their swords thy gold hath done,
In many a bloodless triumph won,
And many a panic stay’d . . .
Upon thy struggling path of life
Strong lights and shades were cast,
Which led through toil, suspense and strife
To triumph at the last!
In the continual conflict then,
With selfish, artful, flattering men
Through which thy spirit pass’d
What wonder though some stains of earth,
Were blended with thine inward worth.
Though cold unto a stranger’s sight,
Thy heart was generous found,
Nor didst thou, like the Upas, blight
The lowly shrubs around;
But friends, protected at thy side,
Grew with thy growth and flourish’d wide
In safe and prosperous ground:
As unto Egypt’s saviour came,
All that could boast of Israel’s name.
Mourning rings and broaches were produced, as well as a medal featuring Nathan’s face. There was even a printed silk mourning scarf, again picturing Nathan at his pillar, bearing a rather more succinct tribute (in four languages)—“Equally Distinguished for his Commercial Skill & Enterprize & for his Charitable and Benevolent Disposition”—as well as a list of his best-known loans and a statement of his total wealth. Such mementoes (as the scarf’s multilingual text suggests) reached an international audience. Copies of the scarf itself were sold in Vienna; Heseltine’s verses inspired a similar German tribute; and obituaries appeared not only in the English press but also in the Journal des Débats and (at Salomon’s prompting) in the Allgemeine Zeitung.
Needless to say, it was not only the financial community which mourned the great man’s demise. As The Times mentioned, the diplomatic and political world was also well represented at the funeral: among the mourners were the Prussian, Russian, Austrian and Neapolitan ambassadors, as well Lord Stewart and—according to one account—the Duke of Marlborough. And, of course, the Jewish community also turned out in force. “A great number of Jews . . . had assembled long before the hour fixed for the funeral” and a special delegation of children from the Jews’ Free School preceded the coffin. At the Great Synagogue in Duke Place, the Chief Rabbi Solomon Hirschell preached a sermon; and Nathan’s remains were finally buried in the north-west corner of the Jewish burial ground in Whitechapel Road. Seven members of the community of the Great Synagogue attended New Court daily in the year after Nathan’s death to form the required “minyan” for the Kaddish, the traditional prayers for the dead.
How are we to account for this extraordinary public interest in the death of a German-born, Jewish banker? The obvious answer is that Nathan Rothschild was quite simply the richest man in Britain and therefore, given Britain’s economic lead at this time, almost certainly the richest man in the world. His share of the combined capital of the five houses which he ran in partnership with his brothers was £1,478,541 when he died (a quarter of the total of just over £6 million). He had also given his children before his death around £800,000, and was able in his will to bequeath in total a further £1,192,500 to them and other members of his family. This implies that Nathan’s total wealth—excluding his properties in Piccadilly and Gunnersbury Park but including money he had already given his children prior to making his will—was around £3.5 million.
This was a fortune vastly in excess of the Rothschilds’ nearest banking rivals in London, Baring Brothers, whose capital in the year of Nathan’s death was a mere £776,650. It also easily outstripped the money accumulated by contemporary industrialists and the largely inherited fortunes of the country’s wealthiest aristocratic landowners. Rubinstein’s figures for British millionaires do not give precise figures for fortunes in excess of £1 million before 1858; but it seems unlikely that any of the eleven other individuals listed for the period 1810-56 left his heirs as much as Nathan: the nearest was that of the banker William J. Denison, who left £2.3 million including real estate worth £600,000 in 1849. It was not until 1857 that someone left more than Nathan to his heirs—the textile warehouseman and Anglo-American banker James Morrison, who left between £4 million and £6 million at his death. Nathan not only died richer than the ironmaster Richard Crawshay and the cotton manufacturers Robert Peel and Richard Arkwright; he also left more than the Duke of Queensberry, the Duke of Sutherland and the Duke of Cleveland.
Of course, it is far from easy to compare a fortune such as Nathan’s, which overwhelmingly took the form of financial assets, with the wealth of the great landowners. However, the incomes from their different forms of capital can be compared. The available figures suggest that a handful of aristocrats had incomes comparably large, if not slightly larger: the Duke of Northumberland, Earl Grosvenor, the Marquess of Stafford and the Earl of Bridgewater were all said to have £100,000 a year “clear of everything” in 1819; and not far behind them were the dukes of Bedford, Richmond, Sutherland and Buccleuch, the marquesses of Westminster and Bute, and the earls of Derby, Lonsdale, Dudley and Leicester. The 6th Duke of Devonshire, to take one example, had an income of between £80,000 and £100,000 in the decade of Nathan’s death. By comparison, Nathan’s income in the last five full years of his life (taking the average profits of the London house as a proxy) averaged £87,623 per annum.
However, these figures overlook a vital factor which gave Nathan financial superiority over his noble contemporaries. He had debtors: they had debts. By the 1830s the Duke of Devonshire’s lavish lifestyle had increased the encumbrances on his estates from £593,000 to £700,000; and interest charges on these debts consumed fully half of his income, with a further £36,000 per annum being consumed by the costs of his household at Chatsworth. Indeed, a number of the great landowners were heading rapidly for the financial rocks at the very time that Nathan died. By 1844 the Duke’s debts were just short of £1 million, and he was increasingly obliged to sell off land to keep afloat. In 1848 the Duke of Buckingham actually went bankrupt, with encumbrances on his estates in excess of £1.5 million. The idea that Nathan Rothschild had died “leaving Property to the Amount of 5,000,000 Sterling” was therefore in itself a matter for public curiosity, not to say astonishment: hence its publication at the very centre of the mourning scarf described above. The figure may have been a slight exaggeration, but it was a pardonable one. In terms of net wealth he was in a league of his own.
What was even more remarkable was how much more Nathan Rothschild was worth when he died than when he had first arrived in Britain. According to his own account, he had arrived in England with just £20,000. Moreover, he had worked his way up into the City from the much less refined textiles sector, having begun his British business career as a cloth merchant in Manchester. He, more than most wealthy Jews of the nineteenth century, really had gone from “rags” to riches. As such, he embodied perfectly the developing nineteenth-century ideal of the self-made man. And of course he was not the only rich Rothschild. Muhlstein’s figures suggest that James was already probably the richest man in France. In the less prosperous parts of Europe where they lived, Amschel, Salomon and Carl were even further ahead of their rivals. Together, the Rothschilds were without question the richest family in the world.
To poorer Jews in particular, Nathan’s extraordinary rise to riches had an almost mystical significance—hence the legend of the “Hebrew talisman,” the magical source of his good luck, which became associated with him in Jewish lore. This extraordinary story—a version of which was published by an anonymous author in London just four years after Nathan’s death—is one of the most bizarre early examples of what might be called the “Rothschild myth.” Although apparently by a Jewish author, the possibility that (like the later and much better known Protocols of the Elders of Zion) it was in fact the work of an anti-Jewish agent provocateur cannot be ruled out, so militant is its tone. Indeed, the story anticipates many of the more fantastic allegations of the overtly anti-Rothschild French pamphleteers of the 1840s.
The story is narrated by a mysterious phantom, who describes himself as “detesting . . . the followers of the Nazarene, with a most holy and fervent detestation” and having been “doomed to long ages of agony and travail” by “the avenging one of Nazareth.” He is the custodian of a talisman, which confers on its holder magical powers. “Could I not command gold? Yea . . . had I not the talisman?—Had I not the ineffable words?—Could I not buy the whole evil race, from the false prophet even to the lowest among the evil genii?—Could I not task them in the midnight incantation, and, lo! would not plenty make the hearts of my people glad at sunrise?” His aim is to give the talisman to “a zealous hater of the Nazarenes,—a man exceedingly desirous of working their degradation and destruction . . . a champion to avenge the wrongs of Israel.”
Arriving in Frankfurt during the Napoleonic occupation of the town, the narrator witnesses hideous scenes of pillage by French troops. The Frankfurt Jews in particular are the objects of systematic extortion. In a looted office in the heart of the Jewish quarter, he comes across a young man, “his eyes . . . red with much weeping, and his cheeks pale and haggard, as much with sorrow and long vigils.” As he looks on, a French soldier bursts into the office demanding yet more money. “ ‘God of Abraham, Isaac, and Jacob!’ [the young man] exclaimed, as, kneeling, he lifted up his trembling hands to the east, ‘how long, O God! how long? . . . How long . . . shall the unbeliever triumph, and thy people be a jest and a bye word?’ ” Unmoved, the Frenchman seizes his last remaining object of value, the family teraphim (household shrine). After he departs, the young man “cursed the Nazarenes, and prayed in fervent tones that he might have the power to crush them, and vowed by the ineffable name of Jehovah to lose no opportunity of despoiling their wealth, and trampling down, yea, utterly bruising, their black and unsparing and unbelieving hearts.” “Here,” declares the narrator, “was a servant fit for the great master—here a champion fit for the great cause. His wrongs . . . would make him a faithful and very zealous foeman of the Nazarene of whatever nation. Here was, at length, the man, the long hoped, the long sought, who should build up the temple of the Lord, and make Israel and Judah feared and obeyed in all the quarters of the earth.”
The phantom narrator therefore makes himself visible (“clad in the flowing robes of the far East,” he is “pallid as a corpse . . . with hoary hair and beard” and “great black eyes, that shot forth lurid fires, upon which no mortal could look and not tremble”). “I spake the words of power, and the talisman was once more committed to a man of my persecuted race,” on this occasion in the form of “a ring holding the keys of his rifled drawers.” “I gave to that ring the influence and might of the signet of the wise Solomon. Having done this, I commanded the young man to name some wish for instant accomplishment; and ere he had thrice, according to my instructions, whirled the ring upon his forefinger, steps were heard.” A man enters (later revealed to be a prince), weighed down with a huge bag of gold, which he entrusts to the young man. Needless to say, it contains “the very sum for which he had wished aloud while making his first essay of the power of the talisman.”
“Men of the accursed and plundering race!” the narrator exclaims, revealing at last the identity of the chosen one:
Ye whose estates were within a brief space to have been within his grasp; ye, whose equipages and whose liveried lacquies I so lately saw following to his premature grave the man of Israel whom I thus enabled to war upon ye in your vulnerable quarter,—accursed and detested Nazarenes—the young Israelite, to whom I thus committed the Talisman, and who thus early and thus fully experienced its mighty power—he who for years despoiled you of the gold which ye make to yourselves, even as a god—that man whom ye fawned upon, even while you hated him, and knew that he despised you—that man was NATHAN MEYER [sic] ROTHSCHILD. [He] waxed wealthy, more wealthy than any who had gone before him, his riches astonished the gentiles and very justly they said, such amazing wealth could not be amassed by one man, in so short a time by any human agency—they were right, it was the agency of the talisman . . .
There then follows a brief but classic mythologised account of Nathan’s rise from the ruins of looted Frankfurt to fame and fortune. “He came by my direction to this paradise of loan-contracting and speculating fools, and became the leviathan of the money markets of Europe . . . the loan contractor, the jobber, and the money lender of the gentile kings.” When Napoleon (encouraged by the narrator) invaded Russia, “Rothschild was right speedy to make [his] ruin utter and inevitable—not to be repaired.” When the Emperor returned from Elba, “by whom was his hope blasted? . . . simply by Nathan Meyer [sic] Rothschild armed with the Talisman.” The British government needed money not only to pay Wellington’s army at Waterloo, but also to bribe “the Generals and the Senators of France” to desert Napoleon. “There was but one man on earth who both COULD andwould provide the millions of golden pounds, required for the instant purposes of the English minister.—That man was ROTHSCHILD. By my instructions, he let the Minister have the hard gold . . .”
But all this, it transpires, was for a higher purpose: for Nathan lent the money only “on one condition . . . the re-establishment of Judah’s kingdom—the rebuilding of thy towers, Oh! Jerusalem!”:
That most elaborate of bad jokes, history, will, no doubt, say that the Jew Rothschild lent the Nazarene elder called Lord Liverpool, the sum necessary to crush Napoleon Buonaparte, in consideration of some such Judean motive as 25 per cent interest. The writers of history, in that case, will, as usual, lie . . . Rothschild was commanded to lend the money . . . [in return for] the restoration of Judea to our ancient race; the guarantee of England for the independence of the kingdom of Judea . . . In twelve hours, the millions were in the possession of the minister, and a secret agreement, guaranteed by the sign manual of royalty, was in the possession of Rothschild, for the restoration of Judea in 21 years from the day on which Napoleon should finally be driven from France.
And here is the twist in the tale:
This very year my task should have been completed; would have been completed, but he, Rothschild . . . at the twelfth hour proved false . . . His long round of success (unchecked save once when I reproved his presumption with the loss of a hundred thousand pounds in a single day’s business in Spanish Stock) . . . made him more and more purse-proud . . . [so] that it was rather with grief than surprise that I recently heard from his own lips that he had basely sold the agreement for the restoration of Judea for the promise of a petty English Emancipation Bill for our people, and a petty English peerage for himself. This delectable job, this high-minded bargain, was to be completed in the ensuing years, by which time the purse-proud, haughty renegade reckoned upon being worth 5,000,000 £ of money. He was already worth above four.
But of course, having betrayed his master, these vain dreams could only be dashed. “His talisman disappeared, and I took care he should know it had disappeared forever. He never ventured upon the Exchange again, or the scribe who wrote his will should have been saved much trouble and time.”
Did I give him the talisman, to enable him like Sampson to Gideon to intrude his family and found a peerage among the Normans? or to stifle his conscience with the weight of riches? or to flatter it with ostentatious charities? No Israelite can put his hand to the plough of this great work, look back and live!
In this bizarre fantasy, Nathan’s death therefore becomes his punishment for his failure to fulfil his promise to restore Palestine to the Jews; and the narrator moves on in search of a new “heaven-appointed champion” to bear the talisman. Like a Jewish version of the Nibelung saga, with its magic ring which corrupts as it empowers, the story of the “Hebrew talisman” vividly illustrates the mystique that as early as 1840 had begun to surround the career of Nathan Rothschild and his brothers.
It is a good illustration of the wide currency of such legends that, shortly after Nathan’s death an American paper—evidently not a Jewish one—reported that
“an extra number of watchmen, after the interment, will be placed at the grave for a length of time, to prevent the committal of any sacrilegious act towards the deceased.” We suppose that this is a hint to “our peo plesh” [sic] to keep their fingers off the fingerer of millions. A rumor is current that a large sum is bid for one of his ogles—in the hope that a “Jew’s eye” would be worth a fortune.
As Nathan Rothschild died, a myth was born which was to prove as enduringly potent and dangerous as any myth of the nineteenth century.
Succession
To whom—in reality—did the “talisman” of Rothschild leadership pass on the death of “the commanding general?” The traditional assumption has been that the youngest of the five brothers, James, immediately inherited Nathan’s mantle. That was his friend Heine’s view. “Since the death of his distinguished brother in England, all the political significance of the House of Rothschild” was concentrated in his hands, he wrote not long afterwards. “The head, or rather the brain, of this family is Baron James, a remarkable man . . .” It is not difficult to see why Heine assumed this. In an earlier piece written in March 1841, he had portrayed James only half-ironically as a kind of financial emperor, literally holding court in the rue Laffitte at the centre of “a labyrinth of halls, a barracks of wealth.” Indeed, he noticed that James—in imitation of his brother Nathan—had begun to decorate his office with “busts of all the European monarchs who have contracted loans from his firm.” Like Nathan too, James was an intimidating figure in this, his natural habitat. “One must have respect for this man,” Heine went on, “if only because of the respect he inspires in others”:
I like best to visit him in the offices of his banking house, where I can philosophically observe people—not only the Chosen People, but all the others too—bow and scrape before him. There you may watch a twisting and bending of backbones such as the most accomplished acrobat would find difficult. I have seen people who twitched convulsively when they drew near the great Baron as though they had touched a Voltaic battery. Even while approaching the door of his private office many experience a thrill of awe such as Moses once felt on Mount Horeb when he realised that he was standing on holy ground. And just as Moses then removed his shoes, so many a broker or commission agent who dared to enter Rothschild’s inner sanctum would willingly remove his boots if he were not afraid that the odour of his feet might give offence.
“That inner sanctum is a remarkable place indeed,” Heine continued; “it inspires sublime thoughts and feelings, like the sight of the ocean or the starry heavens. Here we may see the littleness of man and the greatness of God.”
Of course, Heine was letting his comic imagination run away with him completely when he described “a stock exchange speculator” doffing his hat respectfully before James’s “mighty” chamber pot; or an unidentified friend offering to “give half his nose to purchase” the honour of lunch with the Baron. But the recollections of just such a minor denizen of the bourse, Ernest Feydeau, vividly confirm the quasi-regal status James enjoyed in Paris, an irascible despot in a chaotic court, besieged from nine in the morning until the bourse closed at four by a procession of sycophantic brokers, jobbers and assorted hangers-on. James, recalled Feydeau (who visited the rue Laffitte regularly in the 1850s),
felt obliged to receive all these sullen, busy people, sometimes sickeningly banal, almost all of them obsequious in their manner, dull in their solicitations, servile in their flattery. Leaning back in his chair, he absent-mindedly took the quotation handed to him by each of these uninteresting beings, who filed from door to door in front of his desk, barely cast a glance over it, sometimes allowing himself the malicious pleasure of dropping it in his wastepaper basket, usually giving it back to whoever had presented it to him and passing on to another.
As he ran this depressing gauntlet day after day, Feydeau never ceased to marvel at the “truly infernal din, the bewildering disorder in the middle of which the baron found the means of handling—every day, and without an instant of respite—the most colossal financial operations.” The office was filled with
the deafening and unceasing cacophony, the incessant racket produced by the banging of doors, the coming and going of employees carrying despatches or requesting signatures. The importunities of the brokers’ clerks and the jobbers looking for orders added no little noise to the tumult, which gave the office of “Monsieur le baron” an air akin to the Tower of Babel. Here all the tongues of the world were spoken, including Hebrew. A crowd of friends of all three sexes—men, women and beggars—followed one after the other throughout the day, all in quest of news. There were jewellers opening their cases of precious stones before the baron’s ailing eyes, porcelain dealers and art dealers coming to offer their choicest items. Pretty women wove their way everywhere, soliciting for information—or something else. And across this merciless and incessant procession, while the brain of the toiling millionaire must have been bursting under the accumulation of figures and calculations, the youngest of his sons—a large and chubby-cheeked child whom I can still picture—would periodically charge in, using his father’s cane as a horse, and blowing on his trumpet like the angel of the valley of J[eh]osaphat.
And the poor baron did not utter a word of complaint, did not so much as frown.
He “did not even have the right to eat and sleep in peace. From five in the morning, in winter and in summer, the bringers and takers of news besieged his door . . . When business required it, he dined with his entire family in a small room beside his office, seasoning his meal with stock exchange quotations, while the procession of brokers continued round his dinner table with merciless persistence.” Indeed, at times James seemed to Feydeau less a king holding court than a prisoner of his own work ethic. What else could explain the willingess of a man who was already so rich to continue working under such gruelling conditions but “a singular tyranny of habit, as much as a commendable sentiment of professional ambition?”
Ultimately, however, James was more to be abhorred for his tyranny towards others—including Feydeau himself—than pitied:
One of [his] malicious habits . . . consisted in not saying a word, not even lifting his eyes to look at the intermediary, leaving him there, with a look of embarrassment, his hat in his hand and standing on one leg, and passing his quotation successively to all the members of his family, who paid scarcely any more attention to it than he had. One day, when he had played this wretched trick on me, and as I was showing, despite myself, some impatience, he felt obliged to pay me a courtesy, after his fashion, in the charitable aim of calming me down. It was the month of January, and on the table there was a dish full of large, white strawberries. With his fork he picked the most appetising of these strawberries, the one which lay on the top of the pile, and, presenting it to me as he might have done to a parrot, said:
“Vould you like von?”
Feydeau was naturally mortified by this humiliating treatment, especially as James’s wife and daughter were evidently witnesses to it. However, he tried to put a brave face on it:
“You are a thousand times too kind,” I replied, taking a step backwards, “but I would prefer an order.”
The baron was not perturbed. He nailed me cruelly by saying:
“Buy five Northern shares for cash.”
The price of five Northern shares then being around 50 francs, the amount I could make from such an attractive transaction was just 12 francs and 50 centimes.
Such brutal treatment of underlings was, according to Feydeau, quite routine (a view corroborated by Alexander Herzen’s description of a visit to the rue Laffitte in 1849):3
“You are annoying me! Dat isn’t true! Leaf me in peace!” were the civilities he addressed to me . . . whenever I took it upon myself to make some observation concerning an order. It is necessary to bear in mind that because of the peculiar language which he spoke and his accent, it was not always easy to understand him.
One day, prompted by a stock market price which annoyed him, he became so angry that he tore my quotation in two, obliging me to make it up again, and called me a “blested impecile!”
Others—even fellow Jews—fared just as badly: “ ‘Ah! Dere you are, you tamned thief of a Cherman Chew!’ he said one day to one of his coreligionists, a jobber, as he came into his office . . . The unfortunate man stood crushed, deflated, speechless and blank-faced. Perhaps he took it for a compliment.” The occasion when a broker named Manuel dared to speak his mind to James had become part of bourse mythology. “Good day, baron,” he had said, as he entered James’s office. “How are you keeping?”
“Vat’s dat got to do vit you?” James had retorted cantankerously.
“You are quite right,” exclaimed Manuel. “You could drop down dead as I stand here, and I would no more care than if a dog died.”
Small wonder so many of his Parisian contemporaries assumed that James was Nathan’s heir.
Yet it is far from clear that James ever wielded the same power within the Rothschild family that his brother had. He was undoubtedly quick to try to impose his authority on his nephews following Nathan’s death. One of the first letters he wrote to Lionel and his brothers under the new dispensation of 1836 began in no uncertain terms:
I would ask you kindly, my dear nephews, to pay a little more attention to my letters, because quite frankly I was very cross today, for I would very much have wished to continue working with London in the same way that I had done in the past with your late father, and not to have to write argumentative letters, for a business can only be managed well if one pays as much attention to the smaller business transactions as one does to the larger ones.
And there followed three specific sins of omission allegedly perpetrated by the London house. Such rebukes were issued on a fairly regular basis over the next decade, with James’s favourite criticism being that his nephews were too busy hunting to read, much less answer, their uncle’s letters. Pointed allusions to the way things had been in Nathan’s day were also regularly made, not only by James but by all the brothers. “You can now see how right I was,” wrote Salomon patronisingly in September 1837,
when I wrote you about the business deals and you will now have to admit it, my dear children . . . We now have to push the business with the bills, my dear children. This is what your late father had always said. Whenever he saw that others wanted to push us out of a business deal he always wrote, “My dear brother, we have to push it through.” It is all the same whether we make a loss or a profit, whether we earn something or suffer a loss, we must not, nor should we let anyone grow above our heads or we will be simply pushed aside. I hope that you will now listen to my advice, my dear nephews, and irrespective of whether we make a profit or a loss we have to push.
Not long after, James wrote to point out “that in the lifetime of your dear Papa he used to give us discount notes at 2½ per cent and that, as good bills can now be freely discounted in London at 3 per cent, the other houses take advantage of it . . . so that if you wish us to be able to compete with them and do business you must discount for us on the same terms.” Amschel harped on the same theme. He and James could only agree in 1839 that “the loss of our brother Nathan was a terrible blow and one can’t expect that youngsters will get the same respect, fear and trust as do the older generation.”
Yet—as James’s complaint about preferential discounting suggests—the most serious complaint made by the continental Rothschilds was that the London house was neglecting their interests; and, as we have seen, just the same had been alleged on a number of occasions before Nathan’s death. Indeed, it might be said to testify to the success of his sons in defending their relative autonomy that this charge was being heard again within just over a year of his death. It was frequently repeated thereafter. In September 1839, for example, James accused the London house of collecting half the profits on their business in Spain but leaving the Paris house to run all the risks. “I think that it is only right and proper,” he complained irritably, “that we share the other business operations where the Paris House runs just as much of the risk as does London, and that no House has any advantage over the other, for as soon as one House notices such behaviour in the other this will generate a feeling of mistrust and everything will then simply collapse, God forbid.” A week later he repeated his grievance. “As long as I am alive,” he told Nat, “I will never countenance that one of our Houses should seek to achieve an advantage over another or perpetrate an injustice [against another].” But “when you [meaning the London house] see that a deal is going well then you say, ‘Let us keep it here,’ whereas if it is not going well then you give a share of it to the Paris House. My dear and good Nat, this sort of attitude acts as a dampener and only gives rise to annoying correspondence.” Such minor disputes about the collective accounts between the houses became more frequent. There was also friction in 1840 and 1841, when both James and Amschel accused their nephews of sending bills to rival banks in Paris and Frankfurt.
For their part, the younger Rothschilds were often irritated by the older. “I assure you that it is a great bother to arrange with people who are so very sententious about money affairs,” grumbled Anthony to Lionel, at a time when all four of his uncles seemed to be taking an inordinate interest in his marriage plans. “I assure you that although Uncle Charles is your father in law, that the less one has to do with this gentleman, the better.” Amschel’s will, which he constantly redrafted in the hope of exerting some sort of leverage over his nephews, was another source of discontent.
The reality was that, in terms of resources, the London, Paris and Frankfurt houses were now quite evenly matched, so that no one of them was really in a position to dictate to the others as Nathan once had. “My very dear nephews,” James had to write apologetically, following a disagreement in March 1838, “I am very pleased with you and I fervently request of you not to take my words à la lettre because one has to put up with such torments over here that at times one becomes very critical and discontented. My nerves are about to snap and I am easily irritated.” Nor was James in a position to dominate his brothers. When Amschel made one of his periodic threats to give up business on the ground of ill health, James rushed off to Frankfurt; but it was on Salomon, his son Anselm and Carl’s eldest son Mayer Carl that the onus of responsibility naturally fell, reflecting the closer community of business interest between Frankfurt, Vienna and Naples. When James himself was taken seriously ill in the winter of 1838-9, any thought of his playing the role of “commanding general” had to be put aside. Indeed, there were few, if any, occasions before 1848 when he explicitly opposed his elder brothers’ wishes. As Nat commented when Salomon demanded a bigger share of some railway and state loan business, “here we are in the habit of giving way to Frankfurt.”
As in the past, the older Rothschilds sought to counteract the firm’s centrifugal tendencies by appealing to the hallowed principle of fraternal “concordia”: “In what has our strength been until now?” remonstrated James in 1839, when he and his nephews were once again at odds. “Only in that people knew that one place will support the other . . . [A]s you well know, the well-being of our family is closer to my heart than anything else.” In 1841 Amschel felt so worried about the extent of internecine friction that he sent all his brothers and nephews a passionate appeal for family unity, invoking the memory of Mayer Amschel. “Let us do business again in peace and in harmony and not quarrel with each other,” pleaded James the following year. “If peace reigns between us this will only bring us good fortune and blessings and both you and we should not lack anything.”
Perhaps wisely, it was decided when the partners met at Paris that same year to leave the 1836 agreement unaltered, as—in Hannah’s words—“the Elder Brothers appear to be content with things as they are and require no change.” However, she added significantly: “The counting house of each[,] having their [sic] own capital[,] should be independent, and they must regulate the income of each party to make all those concerned equally so[;] the Elder Members’ capital being so much greater they have more to say.” This was also the view of her elder sons. Two years later, Lionel was able to modify the partnership agreement in precisely that way. By formally withdrawing £340,250 from their personal share of the combined capital, he and his brothers brought their proportion—and therefore the amount of annual interest they received, calculated as 3 per cent of that proportion—into line with those of their uncles, ending the situation whereby Nathan had been the biggest “shareholder.”
In doing so, it might be thought, Lionel was surrendering an advantage. Indeed, he surrendered even more by leaving the 1836 system intact for the distribution of the combined profits, which had specified that 10 per cent of the continental houses’ profits went to the London house. “As I was quite sure that it would have given rise to disagreeable disputes or discussions,” Lionel reported to his brothers, “and I am quite certain we should have got nothing by it, I of course said not a word about our having a larger share of the profits; thank God for what we have and may we have to divide as much the next time we meet.” However, Lionel’s objective was primarily to retain the relative autonomy of the London house. His real victory was to defeat James’s proposal—first put forward nearly thirty years before—that the partnership between the five houses should be made public:
Uncle James wanted this act of partnership, without any mention of our money matters so that he might show it at Paris, in case they wanted to know who the partners of the House are—now, as we in London always have said that our house has nothing to do with any others we just want to avoid having any document which anyone might show, the agreement with all the money matters is not likely to be produced but one as was proposed might very easily have been made public and will therefore not be made, they immediately agreed to my observations.
Thanks to Lionel, the precise nature of the relationship between the five houses remained shrouded in mystery, a secret between the partners and their lawyers. Such secrecy was a Rothschild tradition; but it seems reasonable to conclude that Lionel already preferred not be bound too tightly to the other four houses.
“Thank God for what we have”: that sentiment was typical of Nathan’s sons. Both Nat and Anthony had used almost exactly the same phrase just a few months before: “We must thank God for what we have got & try to keep it.” Indeed, it is tempting to identify a “generation gap” in entrepreneurial attitudes as one explanation for the disagreements of the 1830s and 1840s. There is no question that New Court was a more financially staid place than it had been under Nathan: there was less bond market speculation and more bill-broking for example. “We prefer dealing largely with a little less profit to keeping a very large stock on hand and holding out for very high prices,” wrote Nat to his brothers from Paris, one of many essentially cautious business maxims he committed to paper. Exiled as he was on the other side of the Channel, he tended to interpret differences between New Court and the rue Laffitte as national in character. “The more I see,” his younger brother declared when he visited Paris in 1846, “I am convinced the more, there is no place like our old New Court. Where would the rubbishy French shares be, if we did not support them? I think we may give ourselves a few airs and be as great men as others.” But it is hard to imagine Nathan saying such a thing. Although only sixteen years separated Lionel and his uncle James, their attitudes to business were separated by much more. For James and his brothers retained the restless, insecure drive born of the Frankfurt ghetto. “Whenever we write to you that other people are more attentive to what is going on and do more business, you immediately assume that we are trying to pick a quarrel with you,” James wrote to his nephews in a somewhat pained letter of 1845. “However, I assure you, my dear nephews, I have nothing of the sort in mind, but my heart breaks when I see how everyone is trying to push us out of [every] business deal. [Even] the stone on the wall is envious and is our enemy.” That tendency to regard all competition as a threat was not something the next generation could inherit.
Yet even without such differences of attitude, there would probably have been increased friction between the five houses, for it was the inevitable price of success. By the mid-1830s each of the five Rothschild houses had securely established itself as the pre-eminent force in the public finances of its respective base country. Admittedly, the great powers were inclined to draw in their horns in the wake of the revolutionary crisis of 1830-33. With the exception of the 1835 loan to indemnify the West Indian slave-owners, Britain, France and Austria did not borrow big sums until 1839-41. Nevertheless, the experience of the revolutionary alarms of the early 1830s had cemented the links between the three main Rothschild houses and the states where they were based. On the part of Lionel and his brothers, there was evidently a degree of emotional identification with England. Salomon too, influenced by his growing intimacy with Metternich, was increasingly inclined to give consideration to Austrian imperial interests. Even James, for all his disdain for the ministers of Louis Philippe, could not wholly avoid taking national priorities into account. Such national identifications did not greatly matter if peace prevailed in Europe. But when the interests of the great powers clashed, as they periodically did, it was less and less easy for the Rothschilds to remain neutral.
The Rothschilds’ natural response to the reduced capital needs of the great powers was to seek business elsewhere. However, there were few regions of the world in which the European powers had no interest, and no regions in which their interests coincided perfectly. In four areas—Iberia, America, the Low Countries and the Near East—the challenge was to arrive at a policy which was in the Rothschilds’ collective interest even when the national interests of their “local” governments were in conflict. This was difficult enough while Nathan was still in charge; after his death it became all but impossible.