APPENDIX 2

Exchange Rates and Selected Financial Statistics

The exchange rates between currencies in late-eighteenth- and early-nineteenth-century Europe varied according to the metal content of coins, and conversion of one currency into another is not always easy. In Frankfurt, the gulden was the denomination most frequently used, though sometimes figures were given in terms of the imperial thaler (Reichsthaler). One Reichsthaler was equal to around 1.79-1.89 gulden. A British pound sterling was equal to 10.2-11.2 gulden. After the return of the pound to gold convertibility, it strengthened against the gulden and for the rest of the century the exchange rate was 12 gulden to the pound (see table a).

However, simple conversion of gulden into pounds can be misleading, as it takes no account of differences in purchasing power. The cost of living was generally thought to be higher in England, and especially in London, than on the continent, but the benefits of colonisation and industrialisation meant that around this time certain commodities (for example cotton goods) were becoming much cheaper in England. For this reason, I have converted gulden figures into pounds in the text only where some sort of comparison seems helpful.

Table a: The sterling exchange rate of the Frankfurt gulden, 1798-1836.

Source: Rothschild correspondence.

A private partnership of the sort formed by the five Rothschild houses was under no obligation in the period covered by these statistics to produce balance sheets or profit and loss accounts. The profit and loss accounts for N. M. Rothschild & Sons are based on summaries (the purpose of which is not known) which begin in 1829. The accounts are simple: on one side all the year’s sales of commodities, stocks and shares are listed; on the other, all the year’s purchases and other costs; the difference is recorded as the annual profit or loss. Table b gives the “bottom line” data and also figures for net appropriations (withdrawals and new capital) by partners.

Nineteenth-century banks did not draw up balance sheets or profit and loss accounts in a standardised way, so comparisons with other banks for which figures are available must be made with extreme caution.

Table b: N. M. Rothschild & Sons: profit and loss accounts, 1829-1848 (£).

Sources: RAL, RFamFD/13F; RFamFD/13E.