The endnotes have been substantially reduced in number for the paperback edition. Scholars seeking detailed references should consult the hardback edition, which also contains a complete bibliography.
Introduction:Reality and Myth
1 Chekhov, “Rothschild’s Fiddle”—a story recommended for readers who wish to be reminded how the great majority of nineteenth-century Europeans lived their lives: unlike the Rothschilds, in wretched poverty.
2 The plot centres around a gathering of the brothers in the old house in the Judengasse in 1822 and Salomon’s unsuccessful bid to marry his only daughter (misnamed Charlotte) to a nobleman (“the Duke of Taunus”). She falls for James instead.
3 For the sake of clarity, I refer to Mayer Amschel and his wife as the first generation, their sons (and daughters) as the second and so on. A family tree is provided at the end of the book.
4 It was James’s son Alphonse who opposed the idea of preserving the documents in the Baron Carl von Rothschild library in Frankfurt. He also insisted on the destruction of documents relating to the payment of French reparations in 1815, fearful that they might one day be used to impugn the patriotism of his father.
5 The French papers have now been returned to the family and are housed in the Rothschild Archive in London. It is hoped that the Austrian material will also be returned in due course.
ONE “Our Blessed Father”: Origins
1 Frankfurt was one of fifty-one self-governing towns within the Holy Roman Empire (which also comprised 94 kings and princes, 103 counts and 41 church prelates).
2 The rule was relaxed slightly in 1790, though access was granted only to a single promenade.
3 A word needs to be said about the spelling of Mayer Amschel’s name. On his own gravestone, he is described in Hebrew characters as “Mosche Meir, Sohn Anschels, genannt Meyer Amschel Rothschild” and his three biographers have used the spelling “Meyer.” However, in the course of his life, he clearly came to prefer the spelling “Mayer.” His descendants named after him have also tended to prefer this spelling. For the sake of simplicity I have therefore used “Mayer” throughout.
4 By 1785, the Prince’s collection was sufficiently large to need a twelve-volume catalogue, compiled by his librarian Wegener. We may discount the apocryphal story that Mayer Amschel was actually introduced to William at this early stage by a general named von Estorff, as well as the fiction that Mayer Amschel impressed the Prince with his skill at chess (William is supposed to have told von Estorff: “You did not recommend a fool to me”): Hessen, “ ‘You did not recommend a fool’.”
5 Mayer Amschel did not have to pay the difference between his share of the Hinterpfann and the price of the house at the green shield all at once. He bought the house in two halves, in Dec. 1783 and Nov. 1785. In each case, as was customary, a third was paid up front, the rest in six or eight half-yearly sums.
6 The house was preserved more or less as Mayer Amschel had known it until 1944. After his widow’s death, it had gradually fallen into disrepair and was saved from the fate of the rest of the Judengasse—compulsory purchase and demolition—only by the family’s decision in the 1880s to preserve it as a historic monument. Along with its neighbour “at the golden arch” (with which it shared a roof as well as a cellar) it was completely restored and opened to the public. It also housed the offices of two Rothschild charities.
7 In the generation after Mayer Amschel, Rothschild first names underwent a confusing process of transformation according to the national milieu in which his sons found themselves. Amschel was sometimes known as Anselm, Salomon was often Salamon or even Solomon, Kalman was almost always Carl after around 1812; and Jakob became James when he moved to Paris. In much of the family’s private correspondence, their sisters and wives tended to be referred to by their Judendeutsch names, usually in a diminutive form, though Jettchen became “Aunt Henrietta” after her English marriage. For the sake of simplicity, I employ the most frequently used forms throughout: Amschel, Salomon, Nathan, Carl and James.
8 Fortunately, no one was killed, as the entire population (including the Rothschilds) had fled. Unfortunately, as Goethe’s mother wrote to her son, this meant that “When the fire started nobody could get into the locked houses and there were no Jews there to put out the fires.”
9 Jews could not formally obtain the freedom of the City of London, but this restriction did not in practice prevent them from doing business there.
10 A typical order was a commission “from Messrs Sichel & Hildesheim Frankfort a/m to be forwarded immediately that the greatest part may arrive in Aug., the remaining part in Sept. to Messrs Wertheimer & Co. Hamburg, payable 3/4 of the amount as soon as the goods arrive at Hamburg, the remaining 1/4 on arrival of the goods at Frankfurt, with bills on London at 2 1/2 month, without Discount. Insurance to be effected by N. M. Rothschild: 30 1/3 pieces blk velveretts . . . 54 1/3 blk velveteens . . . 30 1/3 pieces blue velveretts . . . 221 1/3 pieces blue velveteens . . . 21 1/3 ps plain velveteens . . . 42 1/3 ps fancy velveteens . . . 42 1/3 plain thicksetts . . . 33 1/3 ps fancy cord . . . 12 1/3 ps blue fancy thicksetts newest patterns . . . 30 1/3 pieces white quilting plain and satin stripe . . . 69 1/3 printed thicksett . . . 24 1/3 ps yellow printed thicksetts newest patterns . . . 24 1/4 ps London printed quiltings, the newest patterns and good quality; 40 ps swandowns check and striped; 4 ps toilinets new fashion; 27 1/3 ps. printed thicksett same as patterns.”
11 Nathan to Salomon Salomons & Co., Dec. 21, 1800: “You’ll remember me evry [sic] day that you drink it as you’ll find it very good and cheap. Mr Harman gives the insurance at 1pct. lower than you to do.”
12 The outbreak of war obliged Nathan hastily to renew his passport to ensure that his right of residence in England was not called into question.
13 In fact, Nathan burnt his fingers again with an ill-fated shipment of goods to Russia, which appears to have fallen victim to the Napoleonic invasion.
14 At the time, this now famous address was one of five three-storey houses in a prosperous professional neighbourhood. Nathan’s neighbours included a surgeon and an insurance broker.
TWO The Elector’s Treasure
1 Because cash was scarce in Hessen between the bi-annual fairs, it would have depressed the price of the English bills to have auctioned them for cash. For this reason, the brokers bought them on credit, paying the War Chest at a later date when the markets were more liquid.
2 In addition to his statutory dues and a payment of 400 thalers towards the fabric of the Neustadt church, Mayer Amschel offered to pay the Jewish community as much as the richest Kassel Jew, Oberhofagent Moses Joseph Büding, but the community was insistent that he move permanently to Kassel. In the end, no use was made of the residence permit, which was finally made out in Amschel’s name, and after 1809 the Rothschilds stopped paying contributions to the Kassel community. This led to a protracted legal wrangle between 1815 and 1829 which was settled only when Amschel agreed to pay the community a fine of 2,500 thalers.
3 William’s officials increasingly favoured the purchase of bearer bonds because they were regarded as legally more secure than personal loans; there was added safety in being one of a number of investors; they were more liquid than other forms of loan and they were a relatively anonymous form of investment, which gave little away about the total wealth of the Elector.
4 William’s brother was at that time Danish Statthalter of Schleswig and Holstein, and it was to his seat, Schloss Gottorp, that William initially went. In April 1807, he moved to a modest house at Itzehoe.
5 This second flight was necessitated when Denmark allied herself with France, following the British seizure of the Danish fleet.
6 In 1812 the princes’ debts were rescheduled to include back interest at £225,361, of which the Prince of Wales owed £140,000, the Duke of York £66,667, the Duke of Clarence £20,000.
7 Nathan had made his first tentative foray into the gilts market in June 1803.
8 On one occasion the sea captain to whom they had been entrusted threw them overboard when his ship was searched. In the spring of 1812 James was entrusted with collecting five certificates for £189,550 in London. He and Carl, whom he met at Dunkirk, then went to Paris, from whence Carl proceeded to Prague. The Elector did not receive the certificates until May 20. In late 1812 Salomon picked up a further certificate of £250,000.
9 The total assets of the firm were in excess of 970,000 gulden, 70,000 of which were bonds of various kinds, and 110,000 of which were loans of other sorts, including a loan to William’s son of 10,000 gulden and a bill on Prince George—the Prince Regent—of 127,784 gulden.
10 Virtually all the 190,000 gulden (apart from sums reserved for Carl’s and James’s marriage gifts) went to his wife and daughters however.
11 According to legend, the school originated when Mayer Amschel heard a poor Jewish boy singing in the street in Marburg: he persuaded Geisenheimer to adopt him as the first pupil in a new school.
THREE “The Commanding General” (1813-1815)
1 In the eighteenth century, the guinea was the principal gold coin used in Britain, though the silver shilling (of which sixty-six were coined from the troy pound of silver) was regarded as the monetary standard. In 1717 the mint price was set at 21s. = 1 guinea. However, at this time the Mint switched to a new coin, the pound sterling (= 20s.), and the price of gold was set by Newton at £3 17s. 10 1/2d. This proved to be the first step towards the gold standard: in 1774 silver was effectively demoted when it ceased to be legal tender for sums in excess of £25.
2 The business was given to the Bethmann Brothers, apparently on worse terms than the Rothschilds had offered—a reflection of the continuing preference in Vienna for established banks.
3 It was this rally which increased the profit margin on the Prussian subsidy deal from zero to a respectable 3 per cent.
4 Herries later stated that the total sum transferred by “a single and confidential agency” in 1814 and 1815 was £18 million.
5 The bulletins Nathan received have not been preserved, though a letter confirming the news from a Dutch source based just six miles from the battlefield survives.
6 Characteristically, Nathan, who had intended to float as much as £3 million of these bills, blamed Carl for the Amsterdam market’s lack of interest.
7 Nathan was incensed to hear that James had suffered a riding accident; in his view, to be riding at all was a sign of dilettantism.
FOUR “A Court Always Leads to Something” (1816-1825)
1 Punctuation varies: this is the text in the 1986 Oxford edition. The 1930 Oxford edition has “Jew Rothschild, and his fellow-Christian, Baring” but this seems nonsensical. Byron clearly intended to suggest that the two bankers were on a par, despite their different religions.
2 Of the 700 million francs, some 138 million was to be spent on reconstructing strategic fortresses around France’s borders. Each of the great powers was to receive between 100 and 139 million to compensate them for the costs of the Hundred Days; smaller sums went to the other states in the anti-French coalition. In addition, France had to pay substantial sums to private claimants; after prolonged wrangles, these amounted to 240 million francs. The peace also returned French borders to those of 1790, as opposed to those of 1792 which the 1814 treaty had set. It should be noted that France had previously imposed indemnities on the Netherlands, Austria, Prussia and Portugal, but the sums involved had been smaller.
3 James arranged to invest £20,000 for Dalberg in British stocks at around this time. A short time later he and Salomon joined Dalberg in a small speculation in French rentes.
4 The Amsterdam bank of Hope & Co. had been founded by the Boston-born Henry Hope and the Cor nishman John Williams in the 1760s. Laid low by the French occupation of Holland, it had effectively been taken over by Baring Brothers. Labouchère was a Hope employee who married a Baring and later became a Hope partner.
5 Adolphe d’Eichthal was the grandson of the Bavarian court banker Aron Elias Seligmann; he changed his religion and name and moved to Paris with his son Louis.
6 It was at this time that the Kassel Jewish community took Amschel to court for alleged non-payment of residence dues.
7 Baring had already agreed to advance 165 million francs to the Allies in return for 246 million of rentes at 67; the problem was the decision by the Allies at Aix to accept a final payment of 100 million in the form of 132 million of rentes which Baring rashly agreed to buy at the higher price of 74.
8 The price of gold was £4 0s 6d in 1819 compared with the bullionists” pre-war target of £3 17s 101/2 d.
9 The final terms were that 5 per cent bonds totalling £5 million would be sold in three successive tranches with the price rising from 70 (£2.5 million) to 72.5 (£1.25 million) and then to 75 (£1.25 million). £1 million of the first tranche was taken by the Prussian government itself at Rother’s suggestion. Repayment was to take place over twenty-five years. Officially, as Ehrenberg says, there was no additional commission; in fact, Nathan got his 4 per cent, though this was “kept secret” to defuse criticism in Berlin. In addition, the Rothschilds kept at least £1.5 million for themselves, netting a large profit when the price rose to a peak of 83 in September. This explains why the brothers wrote in such affectionate terms to Rother after the contract was concluded: Salomon assured him that he and Nathan were his “heartfelt, eternal and faithful good friends”; it is unlikely that he would have expressed such sentiments if he had been forced to forgo a commission.
10 The Rothschilds had no difficulty in placing the greater part of the loan with the major Paris and Frankfurt banks, though they were less generous to their rivals in Berlin. The bonds rose initially to 83 in Sept. 1818, then slipped back to 73.5 until late 1819, before rising steadily again. Rumours of a new loan in 1820 seem to have prompted the Rothschilds to sell their own holdings, but these proved unfounded. In fact, the bonds reached par (i.e. 100) in 1824.
11 Isaac Arnstein and Bernhard Eskeles were descendants of Samson Wertheimer, court banker of Charles VI. Arnstein’s son Nathan married Fanny Itzig, famed for her Vienna salon.
12 Ultimately only around 300,000 ducats were repaid.
13 The problem was that neither her son by Napoleon, the Duke of Reichstadt, nor her two children by her second husband, Count von Neipperg, stood to inherit her Italian duchies, which were to pass to the Duke of Lucca after her death.
14 Salomon initially offered to underwrite a loan of 42.8 million gulden at an effective price of just 67. When this was refused he proposed a smaller loan of just 12 million gulden, offering to pay “1.5 per cent more for the amount decided than is offered by any other firm.” The same tactic was repeated when the loan was put out to tender; now Salomon simply offered to pay 0.5 per cent more than the highest bidder. The Austrian government wisely waited, and in April 1823 was able to secure significantly improved terms from a Rothschild-led consortium: a loan of 36 million gulden was issued at an underwriting price of 82.
15 Metternich suspected that this initiative had the backing of the French government, or at least that part of it which was against intervention, but British observers believed that the Rothschilds were “pacific” for reasons of their own.
16 As Finance Minister and then premier, Villèle had succeeded in establishing a modicum of order in the French financial system, but was disliked by the less “circumspect” Ultras, especially Chateaubriand.
17 Significantly, no Rothschild was sent to Madrid and the negotiations there were entrusted to agents, first Belin and then Renevier.
18 In 1807 the Portuguese Crown Prince Joao had gone to Brazil at the time of the French invasion. In 1812, when the French were driven out, he refused to leave Brazil and elevated it “to the dignity, prominence and denomination of a Kingdom” equal with Portugal following his mother’s death in 1816. Six years later, when Joao VI returned to Portugal, his son Pedro became Emperor and he remained as such when Brazil’s independence was recognised in August 1825. When João died the following year, Pedro in turn passed the Portuguese throne to his daughter Maria, though this arrangement was subsequently challenged by Pedro’s brother Miguel.
19 Put simply, the plan drawn up by Nathan was that the Rothschilds, Barings and Laffitte together would undertake the conversion in return for the first year’s saving which resulted from it (28 million francs). To make the conversion attractive, Nathan insisted that the Banque de France must set its discount rate at 3 per cent.
20 See e.g. James, Paris, to Nathan, London, Jan. 28, 1825: “The Minister said to me today, ‘Mr Rothschild, you have the reputation of a man who has been selling large numbers of rentes.’ I must therefore be careful not to antagonise the Government. However, I think that on Monday or Tuesday when the King is due to make his speech I will be able to sell [rentes] at a better rate than today and I will profit from the situation because I don’t foresee any sizeable rise.”
21 In fact, Nathan intervened to support the rente after the rejection of the conversion bill, which unleashed a wave of selling in Paris and London.
22 Of twenty-six foreign government loans totalling £52.4 million which had been made between 1823 and 1826, sixteen were in default within a few years.
FIVE “Hue and Cry” (1826-1829)
1 It is surprising that the Rothschilds could still fear that bills endorsed by them might not be accepted.
2 See illustration 10.vii below. The title is a pun: “Exemplary Knight” literally, but also “Knight with Samples.”
3 See illustration 7.i below.
4 The origin of the word “Hep” is variously explained: as an acronym of “Hierosolyma est perdita,” or as the sound of bleating goats, alluding to the Jews’ traditional beards. There was a similar backlash against emancipation in many German towns.
5 His “Political Georgics,” a pastiche of Dryden’s Georgics, appeared in The Times, March 18, 1828: Macaulay later repeated the lines in a letter to his sister:
“ . . . Oh mysterious two,
Lords of our fate, the Doctor and the Jew,
If by your care preferred th’aspiring clerk [Herries]
Quits the close alley for the breezy park,
. . . And you, great pair, through Windsor’s shades who rove,
The Faun and Dryad of the conscious grove,
All, all, inspire me;—for of all I sing
Doctor and Jew and Marchioness and King . . .
But the black stream beneath runs on the same
Still bawls in Wetherell’s key, still stinks like Herries[’] name.”
6 The loan was intended solely to enable Brazil to maintain interest payments on her existing debt. James “admit[ted] quite frankly that in two years” time these people will not pay anything”; but in the short run it boosted the price of Brazilian bonds.
7 The loan was apparently never repaid, so Nathan kept the jewels.
8 In fact, Amschel provided a sumptuous lunch, to which a number of leading figures in the Frankfurt diplomatic corps were also invited. The Augsburger Zeitung reported that “the stairs leading to the ban quetting room were laid out with red carpet, and decorated with garlands of flowers and plants . . . Several of the most distinguished emissaries to the German Diet, as well as foreign ministers present here, enjoyed this guest luncheon prepared with no expense spared.”
9 The Courrier Français also reported the dinner, humorously explaining the absence of the British ambassador as follows: “An Englishman was asked how it could be that the ambassador of his nation had not been present at this diplomatic feast. ‘Because,’ he replied, ‘England has no need of money.’ ”
SIX Amschel’s Garden
1 Of eight German-Jewish merchants in Manchester in 1806, Nathan was the only one who maintained his religious affiliation.
2 In 1844 Nat was obliged to eat “a kosher lunch and [felt] very sick in consequence. I shall smoke a 14 sou Havana to relieve my stomach.”
3 Wilhelm attended the synagogue twice daily and studied the Talmud in the evening. On the Orthodox revival in Frankfurt.
4 The most common Schnorrer joke has Rothschild complaining about the Schnorrer’s tactics only to be asked, “Are you trying to teach me schnorring?” Another favourite has the Schnorrer regarding his relative’s regular hand-out as inheritable property. Sometimes the Schnorrer is caught out: he claims to play the bassoon, but Rothschild has one in a cupboard and asks him to play; or he sees Rothschild’s daughters playing a duet and decides not to bother schnorring: the Baron has clearly fallen on hard times if they have to share a piano.
5 “So young—and already a Rothschild,” says one Schnorrer to another as a child is wheeled past in a sumptuous perambulator or carriage. Contemplating a lavish Rothschild gravestone, the Schnorrer can only marvel: “They sure know how to live.” There are numerous jokes in this vein.
6 An important element in the Jewish case, stressed by the Rothschilds, was that a payment had been made by the Jewish community for their rights, to finance which bonds had been issued. To revoke the 1811 agreement would therefore require this money to be refunded.
7 The economic restrictions extended the duration of Jewish apprenticeships and prohibited Jews from the trading in food and firewood.
8 Montefiore had retired from business to concentrate on philanthropy and Jewish communal matters.
9 Caroline’s few surviving letters to Salomon suggest above all an impatience with his over-eagerness to please Nathan and others. Their son Anselm became the main focus for her affections; that may explain the relatively cool relationship he had with his father.
10 Hannah was supposed to be there in attendance at the birth of her first grandchild; but she was irresistibly attracted by the wild fluctuations of the bourse caused by the revolution. Despite a number of “specs,” however, she had to confess to her husband: “You will see me back without having made a great deal of money.” Three years later her son wrote expressing the hope that she had been “a great Bull” during the “enormous rise in all the funds.”
SEVEN Barons
1 In 1836, Betty told a guest who admired her house: “If you had seen the hotel of M. Solomon Rothschild (which is next door), you would think our house was only the stables attached to it.”
2 Interestingly, the Rothschild passion for horses appears to have begun with the brothers’ wives. With the exception of James, the brothers regarded horses exclusively as a means of getting from A to B, and were baffled when James began riding for pleasure.
3 On the coat of arms Salomon initially requested the following arms: “First quarter, or, an eagle sable surcharged in dexter by a field gules; second quarter, gules, a leopard passant proper; third quarter, a lion rampant; fourth quarter, azure, an arm bearing five arrows. In the centre of the coat a shield gules. Right hand supporter, a greyhound, a symbol of loyalty; left supporter, a stork, a symbol of piety and content.” This was to be surmounted by a seven-point crown and a lion rampant. This design was substantially modified by the Vienna heralds: the final version featured only the eagle and the hand grasping four arrows; there were no supporters, and the shield was surmounted by a helmet, a three-pointed crown and another eagle. The version registered by Nathan in 1818 was slightly different: the arms consisted of “Azure a lion passant guardant erminois grasping with the dexter forepaw five arrows the pheons downwards or; And for the crest on a wreath of the colours out of a crown vallery gules a demi lion erminois holding between the paws five arrows as in the arms.” The motto, “Concordia, integritas, industria,” was incorporated later.
4 In “The Baths of Lucca,” a ball at Salomon’s house is described: “Such stars and orders! The Order of the Falcon, the Order of the Golden Fleece, the Order of the Lion, the Order of the Eagle—and there was even a child, I assure you, a tiny tot, that wore the Order of the Elephant.” When Macaulay dined with “the Jew” (i.e. Nathan) he “did not see one Peer, or one star, except a foreign order or two, which I generally consider as an intimation to look to my pockets.”
5 It is worth noting that Nathan’s grandson dropped the “de” on receiving a British peerage, a usage followed by his descendants—hence the fact that there are “Rothschilds” as well as “de Rothschilds” today.
6 Other paintings in Nathan’s possession were gifts from government clients, like the portraits of Francis I of Austria, Frederick William III of Prussia, William I of Holland, John VI of Portugal and the Empress Alexandra of Russia seen by Prince Pückler.
7 The Family of W. N. [sic] Rothschild, Consul General of his Austrian Majesty at the British Court was commissioned to mark Nathan’s appointment as Austrian consul general. Hobday was paid £1,000 for the work, which was shown at the Royal Academy in 1821 and then hung for a time at Austrian Consulate, before being moved to Gunnersbury. It can now be seen in the main hall of N. M. Rothschild & Sons at New Court.
8 Hannah also found the atmosphere less tolerant when she went there in 1841: “[T]he Place is too orthodox to be an agreeable residence for any other sect beside Protestant. Bibles and other religious Books are placed in the different apartments of the Hotel we are in but the Inhabitants are civil and attentive.”
EIGHT Sudden Revolutions (1830-1833)
1 The utopian socialist Owen had known the Rothschilds since at least 1818.
2 “Above all fill his purse, O king,
With ample funds for travelling,
And give him a letter of credit to greet
The Rothschild brothers in Rue Lafitte.
“Yes a letter of credit for a million or two
Of golden ducats should seen him through;
And Baron de Rothschild will say of him, then,
“This elephant’s surely the best of men!” ’
3 As James later noted, “regarding Polignac, I had been forewarned on several occasions as far back as six months before. However, I did not want to believe it. I had a gut feeling.”
4 Greville, Memoirs, vol. I, p. 279: “Went to Esterhazy’s ball; talked to old Rothschild who was there with his wife and a dandy little Jew son. He . . . offered to give me a letter by his brother, who would give me any information I wanted, squeezed my hand, and looked like what he is.”
5 Stendhal, Lucien Leuwen. Leuwen also has no objection to his son leaving the family firm to pursue a military or political career, something James would never have countenanced.
6 Hannah, Paris, to Nathan, London, Aug. 24, 1830: “You must look at it coolly, dear Rothschild. It will blow over. Salomon and James do not like the fall, you may easily suppose, but they are very cool and not frightened. Our attention is so engrossed with the funds that I can dwell upon nothing else.”
7 According to Lionel, Hottinguer said: “Our credit is no more so good, and this last six months we have lost much in the public opinion; we shall not find so many more followers when we wish to make any loans.”
8 The Times, Aug. 4, 1836: “This contract was more detrimental in proportion to his subscribers than to himself, as the greater part was distributed among them, and it was at the time a matter of severe reproach against him that he did on this occasion leave his friends completely in the lurch. But this was answered by the remark that he had always been in the practice of dealing liberally with his subscribers in sharing his contracts among them, and that the revolution which followed and made this so ruinous an operation was one that could not possibly have been foreseen by him.”
9 Frederick William had made a morganatic marriage to Gertrud Falkenstein, the divorced wife of a Prussian lieutenant. In 1831 he elevated her to the rank of Countess von Schaumburg, and later Princess of Hanau. When he was in Frankfurt, the couple and their five children regularly “took their midday meal quite en famille with their good business friend.”
10 On July 17, 1832, Thomas Raikes recorded in his journal that a Dutch broker had asked “Rothschild yesterday . . . if he would advance money on stock; the old Jew refused him, saying, ‘In these times I shall not advance money to any one by Got; who knows what may happen? you may be dead tomorrow. ’ It so happened that the poor man was seized with the cholera that very evening, and the next morning he was dead.”
NINE The Chains of Peace
1 The existing links between the House of Saxe-Coburg and the Rothschilds explain why the marriage of “your little Queen” to Albert prompted a message of congratulation from Salomon’s son Anselm to his London cousins.
2 Of crucial importance was the French government’s unequivocal commitment to the two protocols of January 1831, and its refusal to accept the Belgian offer of the crown to Louis Philippe’s son the duc de Nemours, or to support Belgian resistance against the territorial provisions of the protocols. Needless to say, it was good news from a Rothschild standpoint that Leopold of Saxe-Coburg emerged as the successful candidate for the Belgian throne.
3 James opposed the use of the brusque phrases “evacuez immédiatement Bologne” and “evacuez promptement Bologne.” “I shall ensure,” he told his brothers, “that the offending phrase is omitted.” James’s hope that the Austrians would refer the matter to an international conference in Rome was fulfilled, but it was not until July that their troops were withdrawn. The fact that Périer did not make withdrawal a casus belli was therefore significant.
4 Salomon assured the Prussian government that “he had the honour of his House particularly in view, as he attached the greatest value to demonstrating to the Royal Government of Prussia that the consolidation of its public credit, and the fulfilment of the assurances which his House had given in this matter, were of more importance in his eyes than any considerations of private profit.” This proved all too true, despite Nathan’s decision to send Anselm to Berlin to secure modifications to the deal. In essence, the £3,809,400 of 5 per cent bonds still outstanding from the 1818 loan were to be exchanged for 4 per cents issued to the same amount at 98 in the course of two and a half years from March 1830 until September 1832. As James realised even before the agreement was concluded, the issue price was certainly too high given the growing political uncertainty in France and the commission of 1.5 per cent too low. Interestingly, however, he seems to have regarded it as preferable that the Rothschilds undertake the risk, the extent of which he quite accurately gauged: “The worst, the very worst is that we stand to lose 15 per cent, God forbid, which amounts to £200,000 which is quite liable to ruin someone [else].”
5 The outstanding £850,000 of 5 per cents were finally redeemed in 1834.
6 The money was earmarked for the construction of fortresses on the Franco-German border; that was evidently not Metternich’s purpose in borrowing it.
7 The 5 per cent loan was initially issued at 94. Altogether 11 million francs were earmarked for the payment of compensation to Turkey; the parallel with the Belgian-Dutch separation is striking.
TEN The World’s Bankers
1 The cartoon is usually dated 1848 or 1849 but the political allusions are to the political events of 1840.
2 The Royal Exchange (not to be confused with the Stock Exchange at Capel Court) was essentially a market for commercial bills and foreign exchange, though in Nathan’s time bonds began to be traded there too. On the ground floor, the south-east corner was formally allocated to Jewish traders, behind the Spanish and Portuguese.
3 Among other things, the brothers resolved to withdraw their deposits at New Court and to sell their holdings of the 1818 Prussian loan. They also agreed to ensure that they had between them sufficient liquid funds to make available the 9 million gulden of French reparations deposited with them by the German Confederation, and to circulate monthly balance sheets for this purpose. It is not clear whether the agreement was acted upon or whether it was simply intended as a shot across Nathan’s bows.
4 Anselm immediately became entitled to a fifteenth of the profits, though he did not formally acquire a share of the capital until 1828, when a million gulden was invested in his name in the Paris house. His grandmother Gutle’s inheritance from Mayer Amschel was invested in the Frankfurt house, but she had no status as a partner and her share was not included in the total capital for accounting purposes.
5 A clause was added, however, which stated that if the profits of the Paris, Frankfurt, Naples and Vienna houses exceeded those of the London house to the point that 22.5 per cent of their total profits exceeded 60 per cent of the London house’s, then the division of the profits would revert to the old system of equal shares of the whole.
6 There was a threat to give Warburgs priority in 1848, but this seems not to have been carried out.
7 Another apocryphal anecdote has the roles reversed, with a wily stockbroker bursting into Nathan’s house, feigning drunkenness, overhearing sensitive information and rushing back to the exchange to make a killing.
8 In the 1840s the Railway Times referred to the “notorious fact that in all loan transactions of the late Mr Rothschild, The Times invariably, aye systematically, came in for a share of the pickings.” Alsager’s career ended disastrously: he left the paper after a large “inconsistency” was discovered in the accounts, and committed suicide shortly afterwards.
ELEVEN “Il est Mort” (1836)
1 The marriage was apparently unconsummated, for reasons which can easily be inferred. “It appears,” commented James crudely, “that the red King would not permit him to spit roast the bird despite the fact that he had caught it in his net.” Lionel was more delicate: “Till now there is not much to relate as you well know that the fright has generally such an effect upon the young ladies that they are immediately troubled with some thing that pays them very often a visit. I can only say that she is a most beautiful person in every respect.” The different language illustrates nicely the difference between the generations; at the same time, the fact that both men saw fit to allude to the subject shows how few secrets there were between members of the family.
2 Powers of attorney had to be sent to allow senior clerks to act in the absence of family members—a rare if not unprecedented circumstance at this time.
3 “I looked about me. Every minute a small door opened and one Bourse agent after another came in, uttering a number in a loud voice; Rothschild going on reading, muttered without raising his eyes: “Yes—no—good—perhaps—enough—” and the number walked out. There were various gentlemen in the room, rank-and-file capitalists, members of the National Assembly, two or three exhausted tourists with youthful moustaches and elderly cheeks, those everlasting figures who drink—wine—at watering-places and are presented at courts, the feeble, lymphatic suckers that drain the sap from the aristocratic families, and shove their way from the gaming table to the Bourse. They were all talking together in undertones. The Jewish autocrat sat calmly at his table, looking through papers and writing something on them, probably millions, or at least hundreds of thousands.”
TWELVE Love and Debt
1 The house was demolished on Mayer Carl’s death in 1886 and the grounds given to the City of Frankfurt.
2 There appears to have been some sort of financial constraint imposed on Anselm by his father, who perhaps wished his son to reserve his energies for the Austrian estates he would one day inherit. When Anselm spotted an attractive property at Emmerich near Frankfurt in 1843, he had to ask James to put up the money and sought to justify it as a speculative investment. Revealingly, Amschel was to act as “paymaster” for the new house at Grüneburg.
3 Despite his confessed “bad opinion” of Jews in general, Thackeray became friendly with Anthony’s wife Louisa and Lionel’s wife Charlotte after a chance meeting in 1848.
4 In late 1849 Heine sent her a copy of his post-revolutionary poem which contains a passionate denunciation of the powers which had crushed the Hungarian rising. The Rothschilds’ support for the Russian-sponsored reaction was well known.
5 James may have attended the second, disastrous performance.
THIRTEEN Quicksilver and Hickory (1834-1839)
1 The Rothschilds had lent the Portuguese government £88,688 for four months to pay the interest due on its 3 per cent bonds. As a security, the government handed over “Regency bonds” to the nominal value of £600,000. When the government failed to repay the £88,688, the London house sold these bonds, but the Portuguese government claimed that it had unnecessarily delayed this sale in order to collect more interest. The final judgement went in favour of the Portuguese government on a technicality.
2 Interestingly, Metternich made it clear that he had no objection to the Rothschilds covertly participating in Spanish business in partnership with other firms. His concern was that the name “Rothschild,” if publicly associated with the Regency of Maria Christina, would strengthen its position. The warnings of Broglie to James are not easy to reconcile with his talk on March 8 of a French-backed loan to integrate Spain “dans l’ensemble des finances de l’Europe, lesquelles forment en ce moment une sorte de République, une sorte de fédération, qui sont jusqu’à un certain point solidaires les unes des autres et se soutiennent mutuellement dans une certaine mesure.” When asked to define the nature of the French backing, he changed his tune.
3 According to Villiers, Mendizábal hoped for a “stroke of generosity” from “the Leviathan” (meaning Nathan). The diplomatic correspondence shows how little contact there was between the Rothschilds and Palmerston at this time.
4 Lionel to Anthony and Nat, July 22. “Every person here laughs at their want of decision and at their not knowing which cause they ought to take up. Why do they not interfere regularly and send 50,000 men; they would finish the war in three months, or why do not they propose to send some French Generals?” wrote Lionel angrily. “It is disgusting to see two powers like England and France so afraid of the despotic Government”—meaning Metternich. James, Paris, to his nephews, London, Sept. 11; same to same, Dec. 25. Palmerston made a similar point in arguing against a guaranteed loan of the sort urged by Villiers: “Men would say that if money was the chief want of the Queenites a loan might set them on their legs, but that the Rothschilds will not contract to supply military skill and willingness to fight and honesty of purpose, and common sense, and without all these things the loans would only enrich a few more generals.
5 Because the Banque could not directly lend money, the operation had to be done indirectly: Baring drew three-month bills to the value of 48 million francs on a syndicate composed of Hottinguer, Delessert, d’Eichthal and Périer and d’Argout, then discounted the bills; Baring then made the cash available to the Bank.
FOURTEEN Between Retrenchment and Rearmament (1840)
1 “On David’s throne, once it is restored, there will sit that financial dynasty which all European recognises and to which all Europe submits. . . .”
2 “He talked to me with great apparent earnestness on the subject of restoring the Jews to their own land . . . The country, he said, had ample natural capabilities: all it wanted was labour, and protection for the labourer: the ownership of the soil might be bought from Turkey: money would be forthcoming: the Rothschilds and leading Hebrew capitalists would all help: the Turkish empire was falling into ruin: the Turkish Govt would do anything for money.”
3 I am grateful to Professor David Landes for this point.
4 Significantly, the Mayer de Rothschild hospital set up then was wholly controlled by the Rothschilds, and had been established under the supervision of James’s son Gustave.
FIFTEEN “Satan Harnessed”: Playing at Railways (1830-1846)
1 Pseudo-scientific racial definitions of Jewishness were of course primarily devised by anti-Semites in order to get at apostates or the issue of “mixed marriages.” Because the Rothschilds remained Jewish in the religious sense, they could be attacked in traditional terms too.
2 The Austrian government’s inertia is well illustrated by the failure of a scheme to raze the city walls to ease the development of traffic between the centre and the suburbs.
3 As in England, the first French railways strictly speaking were built to transport coal in mining areas: the Saint-Etienne line built in the early 1830s was the analogue of the Stockton—Darlington line built a decade previously. But the development of the railway network proper—in the sense of a service for both freight and passengers, and reliant on steam locomotives rather than horses—should be dated from the construction of the Paris-Saint-Germain line.
4 The Rive Droite cost 16.8 million francs to build compared with a projected cost of 11 million, though it was significantly cheaper than the Rive Gauche.
5 Although it seems unlikely that this pamphlet was authorised, Anselm later stated that the “vulgar abuse” directed at James had “emanated principally from a despicable person, to whom our Paris House had quite rightly refused a loan.”
6 This was essentially a development of his allegations that James had bribed politicians and the press to secure the Nord concession, and a more general attack on the financing of the railways.
7 Naturally, their mother interpreted their survival as “providential.” According to one account, however, Evelina and her unborn son died as a result of another railway crash two years later.
SIXTEEN 1848
1 Figures for length of line constructed and investment show that it was not until 1851 that the trough was reached, four years after the financial crisis: there was, to use an apposite metaphor, a “runaway train” effect.
2 When Nat saw Adolph after the revolution, he found him “quite an altered man, he has become the steadiest fellow ever seen, he neither smokes nor shags nor dances.”
3 According to the republican leader Garnier-Pagès, the attack on Suresnes was instigated by a local poultry merchant, Louis Frazier. The crowd pillaged the pheasant pens and the stables, stole horses and “with hatchets, iron bars and clubs they laid waste furniture, mirrors, and pictures.” Those convicted were sentenced to between five and twenty years in prison.
4 Both Schleswig and Holstein were formally under Danish suzerainty, the former guaranteed by Britain, Russia and France under a treaty of 1720. However, the Salic law of succession applied in the duchies but not in Denmark, so that the failure of the Danish male line appeared to call the future of the duchies into question. The German claim was primarily an ethnic one. Holstein was already part of the German Confederation; the southern part of Schleswig was linguistically German. The Danes forced the issue by incorporating Schleswig into Denmark on March 21. The Confederation Diet in Frankfurt, encouraged by the nationalist pre-parliament, responded by sending a Prussian army to Schleswig. To the dismay of the nationalists in Frankfurt, on August 26 the Prussians bowed to British and Russian pressure and accepted an armistice which established a joint Danish—Prussian administration in the duchies.
5 The political anxieties of Albert’s uncle, King Leopold of the Belgians, were such that he deposited 5 million francs with the Rothschilds as a contingency fund in the event of his losing his throne.
6 James attempted to mollify Cavour by sending his agent Landauer to offer him “as many Rentes au prix courant as I wanted.” Cavour refused, “but it gave me some idea of the way business is done in most of the European Cabinets.”