FIVE
Seyd Umschlungen Millionen.
—CAPTION TO A GERMAN CARICATURE OF NATHAN ROTHSCHILD
It is not wholly surprising, in view of the decisive role they played in so many post war financial transactions, that the Rothschilds first became famous in the 1820s. Even as early as 1816 Carl was conscious that he and his brothers were becoming “very famous” in their home town. As he told James, “these days a lot is written about us in consequence of the freedom of the Press.” He encountered similar publicity when he visited Berlin later the same year. Carl evidently felt uneasy about such celebrity, not least because of the inaccuracy of much that was written. “We are every day in the news,” he complained to Amschel. “Last week you were mentioned in the papers in connection with the poor . . . Today you are mentioned in connection with grain, and that you are going to become [the Elector of Hesse-Kassel’s] Minister at the Diet of the Confederation.” It was the same in Hamburg:
Whenever any one of us arrives gossip and marvellous stories are spread by people. Lawätz told me that at some party in town the story was told that the King of Prussia wrote to us asking to arrange a bond issue of three millions. We are supposed to have replied that this was not necessary, because we were able to advance this sum from our own money.
Amschel too was struck by the public propensity to exaggerate: “People think that we are ten times as rich as we really are.” “Wherever we go now,” Carl found, “people think it is a political trip.” The arrival of James at the St Petersburg stock exchange, or of a ship chartered by Nathan in port, was enough to bring business to a standstill. James had only to buy a certain security in Paris for “everybody” to buy it. Unlike Carl, the youngest brother relished this new-found fame. As he told Nathan, “It is indeed nice to possess so much prestige.” “They all say: ‘Il n’a jamais existé à Paris une maison aussi fameuse que la nôtre.’ . . . We are now regarded as the first . . . I sent last week [bills for] three millions to the Banque de France. There was a lot of rubbish among them—yet not a single one was returned.”1 Salomon and Nathan too could make light of publicity. “We are not going to cry about the fact that you have been caricatured,” he told Nathan. “As you say, so are kings and emperors . . . May God grant that this is the worst thing that ever happens to us . . . May my Anselm and your Lionel also be caricatured, please God, as soon as they become well known in this world. I wish this for our darling children . . . [Idle] dreams!” Nathan’s attitude was typically robust: “Gagesh [nobody] is not being written about.” Press interest—including unsubstantiated claims that they were in financial difficulties—was merely the price of success.
Public Relations
As the brothers’ comments suggest, little of this publicity was good publicity. From the very earliest years of their fame, the Rothschilds were subjected to markedly more vilification than glorification in the public sphere. Of course, most monarchs, politicians and other public figures in the early nineteenth century occasionally found themselves held up to ridicule in newspapers, pamphlets and other media, especially in those parts of Europe where censorship was lax. But the Rothschilds often seemed to attract a specially intense form of criticism. One reason for this was their religion. To those who regretted the steps taken towards religious equality in the Revolutionary period, the fact that the most economically successful family of the Restoration era was Jewish was an inexhaustible source of irritation. However, other factors undoubtedly played a part, and it would be a mistake to equate anti-Semitism with anti-Rothschildism. A good deal of the hostility which the brothers encountered after 1815 can be attributed to plain economic rivalry. The other Frankfurt bankers, for example, would have been envious of the meteoric rise of the Rothschilds even if they had not been Jews. Moreover, some of the Rothschilds’ most determined opponents were other Jews—as in Kassel. Additionally, anti-Rothschildism had a political dimension: their identification with conservative regimes and the policy of the Holy Alliance made them targets for liberal criticism. The bad publicity of the Restoration era was therefore often a synthesis of economic envy and religious antipathy, with an admixture of political radicalism.
In Frankfurt, for example, the Rothschilds’ emergence as a financial great power threatened to eclipse the Bethmanns, hitherto the town’s pre-eminent bankers. Simon Moritz, the dominant partner in this period, viewed his own relative decline with remarkable and indeed admirable equanimity; of all their many rivals, he yielded with the best grace. As early as September 1815 he actively sought to work in partnership with Salomon and James, observing in a letter from Paris to his own house in Frankfurt, “The more contact I have with the two Rothschilds here, the more confidence they give me.” Although he did not pretend to like Nathan’s “audacity and vanity,” he insisted that he was “far from wanting to criticise or envy” the Rothschilds, and described Salomon as “a very estimable man of character, to whom I am sincerely well disposed.” He even referred to Nathan as “our fellow countryman.” “The five Rothschild brothers are a remarkable phenomenon of our time,” he wrote in February 1822. “What they lack in genius they make up for with relentless activity, an enviable unity and mutual consideration.” However, such remarks were partly informed by Bethmann’s awareness that the best place to be in the 1820s was on the Rothschilds’ coat-tails. His mood changed markedly when he found himself left out of the 1821 Neapolitan loan, in which he believed Carl had promised him a share. “I do not think it fair,” he wrote angrily, “that I should commit myself to you for a period of months, while you find it suits you to retain the option whether you will keep your offer open or withdraw it.”
Such complaints about the Rothschilds’ ruthless methods were nothing new: it had been the perennial complaint of the Gentile business community in Frankfurt that the Jews’ business methods were “unfair.” Early German caricatures of the Rothschilds emphasise this point: in I. Nussgeig’sMusterreiter, Carl is portrayed as “Blauschild,” a travelling pedlar heading south to Italy with his bedraggled pony bearing all kinds of wares, including muskets and swords.2 A later caricature contrasts the elegant figure of Bethmann, riding his coach-and-four in fashionable apparel, with a scruffy and grotesquely ugly Amschel, standing atop a large cash box which a two-headed eagle struggles vainly to pull forward.3
As in the past, such business rivalry also had a political dimension. The fact that the Rothschilds were now “richer than Bethmann” was widely seen as evidence of the need to restore the traditional legal restrictions on the Jewish minority. In Amschel’s words, it “irked the Gentiles that a Jew should set the tone.” Hostility was growing daily, he reported in September 1815: “They begrudge us Jews the eyes in our heads . . . [and want] to drink our blood.” Matters were not helped by the fact that other Jews were inclined to boast about the Rothschilds’ wealth as a matter of communal pride, something which Amschel and Carl felt only fuelled Gentile resentment. This resentment generated a spate of anti-Jewish pamphlets and plays in the post-war years—the best-known was Unser Verkehr, about a cowardly Jewish soldier—and finally boiled over in the so-called “Hep” riots of August 1819, when a noisy crowd rampaged through the Judengasse, chanting the traditional anti-Jewish slogan “Hep-Hep! Jude verreck!” and vandalising houses. A good deal of this hostility was specifically targeted at the Rothschild family. In 1817 noisy crowds had gathered outside Amschel’s newly acquired garden, itself a symbol of Jewish social mobility, to mock his even more recent ennoblement, “chanting ‘Baron Amschel’ and all sorts of stupidities.” Caricatures were pinned to his door and the Rothschilds’ office windows were among those broken during the “Hep” riots.4 At around the same time, Amschel received death threats.
Such demonstrations—which prompted Amschel to contemplate leaving Frankfurt altogether—do much to explain the Rothschilds’ ambivalence about popular political participation. When Metternich expressed his disapproval of the riots (a disapproval which, of course, extended to all “outbreaks of the vulgar masses”) he did much to reinforce the Rothschilds’ sense that conservatism might offer them more personal security than the more radical forms of liberalism. This was especially true in Germany, where traditionally the Habsburg Emperor had given the Jews “protection” from the local populace and where the proto-liberal associations of the Restoration era espoused a nationalism which was occasionally anti-Jewish in its rhetoric. At the same time, the closer the Rothschilds drew to the established order, the easier it was for its critics to identify them with it. When marriage between Jews and Gentiles was legalised in Frankfurt—one of a number of minor concessions wrung from the Frankfurt Senate in the 1820s—the eighty-year-old Goethe was moved to comment:
This scandalous law will undermine all family sense of morality, intimately associated with religion as it is. When this is passed, how can a Jewess be prevented from becoming Principal Lady of the Bed Chamber? Who knows whether or not bribery has played a role in all this; who knows whether or not the the all-powerful Rothschilds are behind it?
If so august and enlightened a figure could express such a view, it is no wonder the Rothschilds were content to see popular participation in German political life kept to a minimum.
Anti-Rothschildism was not confined to Frankfurt. Wherever the Rothschilds secured a large proportion of government business, local rivals often reacted with religiously-tinged attacks. In Vienna, for example, the 1820 lottery loan which Salomon arranged in tandem with David Parish was widely criticised as “a shameful Jewish ramp” because of the substantial profits the bankers stood to make. Sometimes, it should be stressed, such attacks had no religious dimension. Six years later it was Parish himself who directed one of the most vitriolic blasts against the Rothschilds of the entire period. Parish had gradually been surpassed by his erstwhile partner: by 1823 he was the junior partner (if not the messenger boy) in Nathan’s loan to Portugal, and his eclipse was completed by the 1825-6 crisis, which claimed Parish’s Viennese bank Fries & Co. as one of its victims. On the eve of drowning himself in the Danube, Parish wrote four letters—to his brother John, to the banker Geymüller, to Metternich and to Salomon himself—all blaming his downfall on the Rothschilds and pledging to discredit them publicly. Metternich, said Parish, had “sacrificed me to the cupidity of a family who, for all their riches, are heartless men who only care about their cash box.” He had been “deceived” by Salomon “in the most shameful way and rewarded for very considerable service with the blackest ingratitude.” The strong implication was that the Rothschilds had secured Metternich’s “protection” and left Parish out in the cold by underhand means. Parish’s letters show that it was perfectly possible to be anti-Rothschild without being anti-Jewish. Yet few German journalists could resist alluding to the family’s religion when reporting such stories. A good example is Friedrich List’s newspaper report of a minor case of embezzlement by a clerk at the Paris house in 1826, which referred quite gratuitously to “Rothschild, the pride of Israel, the mighty lender and master of all the coined and uncoined silver and gold in the Old World, before whose money box Kings and Emperors humbly bow . . .”
The brothers encountered similar kinds of hostility in Paris as well. “It’s always a case of ‘The Jew has done too well, has done this, has done that,’ ” Salomon reported to Nathan in October 1815. These were the complaints of business rivals, who battled to elbow the Rothschilds aside in the scramble for post-war pickings in the French capital. Ten years later, by contrast, James found himself the target of a primarily political critique. The liberal Fournier-Verneuil’s Paris, published in 1826, contains the first of many French claims that the government—in this case Villèle’s—was the corrupt puppet of “the aristocracy of finance, the most unfeeling and ignoble of all aristocracies” at whose head stood none other than “M. le baron R.” Fournier quoted Chateaubriand (an unlikely ally for a liberal): “How hard it would be if Providence had shaken the world, thrust the heir of so many kings under the [guillotine’s] blade, led our armies from Cadiz to Moscow [and] chained Bonaparte on a rock, simply in order that MM. Villèle, Rodchild [sic] and company can make money with the debris of our glory and our liberties.” Even this struck Fournier as understating the problem, however:
The Jew R. and his co-religionists . . . see in the kingdom of the heavens no more than . . . money devoted to usury . . . It is a singular race of men; I am not intolerant, but Napoleon, in calling together the grand Sanhedrin [Jewish assembly] did not create a [new] Frenchman. They . . . are still Jews, and nothing but Jews. I do not hold it against them that they retain their faith; but I reproach them for profiting from all quarrels, for charging them up; they are everywhere. They were in Poland on the corpses of our brothers; they are [currently] supplying Ibraham [Pasha], and they are dancing at this very moment on the tomb of Achilles.
The references to the Ottoman oppression of the Greeks make the author’s liberal sentiments obvious. Equally evident, however, is an anti-Jewish rhetoric which would only later come to be located on the political right. Fournier’s was in many ways an embryonic version of that elaborate conspiracy theory which was to evolve and expand for years to come in France, and which almost invariably ascribed a central and malign political influence to the Rothschilds.
In London too—where anti-Jewish feeling is often assumed to have been less prevalent—the 1820s saw a spate of more or less hostile public allusions to Rothschild power. Indeed, the volume of such allusions was probably greater in London than anywhere else—a reflection partly of Nathan’s relatively greater importance, but also of the freedom of the press. Again, hostility often had its roots in business rivalry. If the rivals were both Jews—as when Mocatta & Goldsmid denounced “the overwhelming attempt of Mr Rothschild to benefit himself at the expense of any person or establishment”—this could be acrimonious without having a religious dimension. But when Alexander Baring referred to his principal rival, it was often (disdainfully) as “the Jew.” According to Laffitte, it was explicitly on religious grounds that Baring sought to exclude the Rothschilds from the French reparations loan in 1817. Although James tended to think this was merely a pretext, he acknowledged that a measure of prejudice was at work:
In Frankfurt one got used to [it] so one is not astonished [there], but here the case is the contrary and if something of this kind happens here, one is more amazed . . . Yesterday Laffitte asked me to come and see him. Baring came to see him and gave clear explanations that he could not possibly make [the loan] with us. True, he himself was not of the same opinion [but] his associés and the English . . . are prejudiced against the Jews. If he were to take us in partnership, the operation would be spoiled. He is unable to do such a business with a Jew . . . It all originates in Labouchère’s pride and in Sillem’s envy; as these two are Hope [& Co.], they think that their honour would suffer if they had to get in line with a Frankfurt Jew and that we would become great by that fact . . . Baring told him: “These gentlemen are working like Jews. How could we co-operate? Their principles are different. They are working on twenty transactions at the same time . . . with the only aim to do business. It is like stock-jobbing. Take for example the Prussian business. They cut off Prussia’s credit . . . then this printing [of circulars] before anything is known.” . . . He added that we are right in what we did because we succeeded and made money. However, he does not want—so he said—to do business in this manner. Now we try—so he said—to bring down the English stocks after having sold ours, in order to buy them back.
It was the Rothschilds’ (very successful) methods, in other words, which Baring found objectionable; but he instinctively thought of these as “Jewish” in character. Such attitudes were widespread. Devotion in Dukes Place, one of the earliest English caricatures thought to be of Nathan, shows him at the front of a Jewish congregation in the Great Synagogue “returning thanks for a loan.” (see illustration 5.i).
As elsewhere, however, there was also a political dimension to anti-Rothschildism. The Rothschilds, as we have seen, often worried in the post-war years about the extent of Baring’s political influence in London and Paris, seeing this as the key to his dominance of the post-war reparations business. To less influential businessmen, however, it was the Rothschilds who seemed to have the political power. As early as 1818 an anonymous member of the stock exchange wrote to Lord Liverpool, attacking Nathan for his opposition to the resumption of cash payments:
Let me inform you, the Capitalists of Money Market . . . have set their faces against your Plan because it serves not their purpose or puts Money in their Pockets. The Jew interest alias Mr Rothschild are . . . straining every nerve to defeat your objects . . . If a Man asks Mr Roth-schild, what is his opinion of the Funds, he answers they must be better and at the very same time he acts contrary[;] [that] in so great a country as this, Your Lordship and Colleagues should be the Sport [&] the caprice of a Jew Party . . . is truly lamentable.
5.1: Devotion in Dukes Place—or Contractors returning thanks for a Loan (1818).
A cartoon of 1824 made a similar allusion to Nathan’s role in the debate about resumption, portraying Nathan rising above the stock exchange in a balloon. Although the balloon is held aloft by a bull and a bear and carries the inscription “Everything must rise,” it is held down by ballast labelled “Cash Bags.” Here too there is a religious allusion. Indeed, the most striking feature of this cartoon is the ambiguous way it portrays Nathan’s relationship to a group of poorer Jews. Nathan holds two flags, bearing the mottoes “Those who give to the poor lend to the Lord” and “Charity covers a multitude of sins”; but he says: “I am going to receive my Dividends,” and a figure on the left, emerging from Capel Court with a copy of The Times, exclaims: “We stop the press to announce that one of the greatest capitalists in the City has gone on a secret Financial Expedition.” The six poor Jews on the right—labelled “The Old Stock reduced”—are left to direct their lamentations to King, the guard of the Royal Mail coach, who is carrying a Way-bill bearing eight Jewish names, each of which has been allotted a shilling.
If these critics portrayed Nathan as an interloper within the City, it was nevertheless also plausible to portray him as the personification of the City as a whole: as the leader of the “Change-Alley People,” of “Muckworm,” the gang of financiers and stockjobbers whom the Tory radical William Cobbett blamed for the post-war policy of deflation. A graphic example of this sort of critique is another 1824 cartoon, A New Court Fire Screen, which portrays the Rothschild-founded Alliance Assurance Company as a racket for defrauding country gentlemen. At the same time, this print also attacks Nathan’s connections with the Holy Alliance. The company’s building has an inscription which reads “Hollow Alliance Fire and Life Preserving Office” and is surmounted by five royal busts marked “Russia,” “Prussia,” “Naples,” “France” and “Austria.” At the very top of the print is a longer inscription which alludes to the Rothschilds’ counter-revolutionary role:
Persons insured in this Office will be supplied gratis with a Box of veritable German Paste which if applied according to the directions of Prince H [or M?] & Co. will prevent fire. NB Should any Person obtain fraudulently a Box of the above miraculous Paste without being insured in this Office it will have the contrary effect and consume the House on the first appearance of the New Moon.
Although the emphasis here is on the Rothschilds’ foreignness—Nathan and Moses Montefiore are pictured speaking French to one another, and there is a German porter with a thick accent—there is no mistaking the Jewishness of the three brokers in the foreground, congratulating one another on their profits.
It was, however, a complex crisis at the highest level of British politics which did most to bring Nathan into the British public eye. In the wake of Lord Liverpool’s illness in February 1827, a ministry had been formed by Canning which united Liberal Tories, notably Huskisson, with Whigs like Lansdowne, but excluded Ultra-Tories led by the Duke of Wellington, who shared Nathan’s distaste for Huskisson’s liberal economic policies. When Canning unexpectedly died in August of the same year, the King commissioned the Chancellor of the Exchequer, Robinson (now Lord Goderich), to form a new Cabinet. But the King’s insistence that Herries be appointed Chancellor (as well as his refusal to have the Whig Lord Holland as Foreign Secretary) meant that Goderich’s term in office was exceedingly brief. At the Whig leader George Tierney’s instigation, Goderich and Huskisson appointed Lord Althorp as chairman of a finance committee without consulting Herries, prompting the latter to threaten resignation unless Althorp’s appointment was rescinded, and Huskisson to threaten resignation if it was. In the event, Goderich himself resigned in January 1828 and the King turned to Wellington to form a government—though the conflict between Huskisson and Herries was resolved only when Wellington agreed to replace him as Chancellor with Goulborn, demoting Herries to the office of Master of the Mint.
The significance of the whole tangled affair lay in the identification of Herries with the King and his increasingly influential physician and private secretary Sir William Knighton; with the opposition within the Tory party to Catholic emancipation; and, perhaps decisively, with the financial interests—principally those of New Court—which were hostile to Huskisson. As early as August 1827 the Ultra-Tory Morning Chronicle was suggesting that Herries’s close connections with Nathan disqualified him from serving as Chancellor. In the debate which followed Herries’s demotion in February 1828, this charge was repeated by the Whig MP for Hertford, Thomas Duncombe, who called for the “mystery . . . about the late change” to be “cleared up, by the rising of the curtain which concealed persons of great consequence, incorporeal as well as corporeal”:
There is . . . deny it who can, a secret influence behind the throne, whose form is never seen, whose name is never breathed, who has access to all the secrets of State, and who manages all the sudden springs of ministerial arrangement . . . Closely connected with this invisible, this incorporeal person, stands a more solid and substantial form, a new, and formidable power, till these days unknown in Europe; master of unbounded wealth, he boasts that he is the arbiter of peace and war, and that the credit of nations depends upon his nod; his correspondents are innumerable; his couriers outrun those of sovereign princes, and absolute sovereigns; ministers of state are in his pay. Paramount in the cabinets of continental Europe, he aspires to the domination of our own; even the great Don Miguel himself [see below], of whom we have lately heard and seen so much, was obliged to have recourse to this individual, before he could take possession of the throne. Sir, that such secret influences do exist is a matter of notoriety; they are known to have been but too busy in the underplot of the recent [ministerial] revolution. I believe their object to be as impure as the means by which their power has been acquired, and denounce them and their agents as unknown to the British consitution, and derogatory to the honour of the Crown.
Duncombe “trusted that the duke of Wellington and the right hon. Secretary for the Home Department [Peel], would not allow the finances of this great country to be controlled any longer by a Jew, or the distribution of the patronage of the Crown to be operated on by the prescriptions of a physician [a laugh].”
Responding for the government, Peel shrugged the attack off, denying knowledge of “the mysterious, incorporeal, and incomprehensible, being of which he had spoken” and denying “that the other more substantial personage had interfered, in the way stated by the hon. gentleman, with the financial affairs of the country.” But Duncombe’s speech was widely followed up. On February 25 a letter appeared in The Times signed “Algernon,” which declared indignantly: “We cannot suffer the destinies of a mighty Empire to be wielded by the unclean hands of a Jew and a man-midwife.” Writing under the pseudonym “Malcolm Macgregor, jun.,” the young Thomas Babington Macaulay contributed some satirical verses about the “mysterious two, / Lords of our fate, the Doctor and the Jew.”5 A number of satirical cartoons were also published on the subject, at least two of which were inspired by Thomas Dibdin’s 1800 play The Jew and the Doctor. In the first to appear (see illustration 5.ii), Nathan is pictured as a pot-bellied angel, descending from the clouds with bags of gold towards the “Ex-Clerk, Ex-Commissary, Ex-Auditor, Ex-Secretary, Ex-Chancellor” Herries. “Si help me Cot!” he declares in what is supposed to be a thick German-Jewish accent, “de Sinking Job will go to de Bottom of de melting pot if you don’t stick out Herry! You bote know dat I and only I am de Incorporial—never mind. I gave de Don Miggel and all de oder Dons de monish! plesh my hearts!” A second cartoon by Robert Cruikshank (see illustration 5.iii) shows Nathan—bearded, in a broad-brimmed hat and with a sack marked “Old Rags” over his shoulder—approaching Wellington with the words: “By Cot dat Doctor is von tam Jew—he want my perquist—you know fat I do for you—you give me de monish for dat fiddle—blesh moine heats!!!—.”
5.ii: George or Robert Cruikshank, The JEW and the DOCTOR, or SECRET INFLUENCE BEHIND THE CURTAIN!! (Vide Times Feby. 19th 1828).
5.iii: Robert Cruikshank, NEW SCENE FOR THE OLD FARCE OF THE JEW AND THE DOCTOR (March 1828).
Duncombe was something of a maverick figure who moved to the left in the 1830s and 1840s, emerging as a keen supporter of Chartism, as well as of Italian and Hungarian nationalism. But it is suggestive that, though he never completed it, he also attempted to write a book entitled The Jews of England, Their History and Wrongs. It seems reasonable to infer that he, like Fournier in France, was one of those liberals of the 1820s who saw no contradiction in attacking conservative ministers and Jewish financiers, even in terms which by modern standards seem quite anti-Semitic. The cartoonists’ motives were not dissimilar. The original play The Jew and the Doctor is about a generous Jew who brings up a Christian child and endows her with £5,000. The cartoons invert the story by portraying Nathan in the act of trying to bribe Wellington. The recurrent theme is of a tottering government, inextricably tied not only to a corrupt court but also to a corrupting banker. In Cruikshank’s cartoon, Wellington sits on a coffin marked “Hic Iacit the Constitution,” with two bottles behind him marked “Physic for Church” and “Physic for State.”
Another cartoon of 1828 (see illustration 5.iv) entitled An Untoward Event, or a Tory Triumph shows Wellington being carried by Londonderry and two others. (Wellington carries the “Treasury Money Box,” a “Treatise on the Corn Laws,” the “Army Estimates,” a sword marked “Waterloo” and a bone marked “Commander in Chief ship,” on the end of an elaborate fork—an allusion to the post he relinquished while serving as Prime Minister.) One of the bearers says to Nathan: “Ah My good R-child, lend a hand, for he’s quite a dead weight.” But Nathan replies: “No, no, we’ll not put our shoulders to it. He’s no Daniel,” and a bearded Jew whispers: “No, No, take care of de Monish.” Old Corruption and New Corruption are portrayed as two sides of the same political coin. Yet, in each cartoon, stress is laid on Nathan’s Jewishness: sometimes his foreign accent is exaggerated, sometimes his appearance is altered to make him conform to the stereotype of the unassimilated immigrant, sometimes he is seen in the company of such a stereotype.
5.iv: “Shortshanks” [Seymour], AN UNTOWARD EVENT, OR A TORY TRIUMPH (February 1828).
The only qualification which needs to be made is that the cartoonists of the period can scarcely be accused of singling out Jews as targets for their satire. The Irishman and the Scotsman in A Tory Triumph are scarcely more sympathetically portrayed than the Jews. The Irishman has simian features and leans on a spade, muttering “Devil burn peat if he [Wellington] puts a finger to it, ’tis no good to poor Erin”; while the hook-nosed Scot in his kilt exclaims: “Na na Mon wanna he spend the siller on red jackets lang spurs and sic like.” Nevertheless, they conspicuously stand next to the “plain Englishman” John Bull. Nathan and the poor Jew stand on the other side of the road.
From Canning to Wellington
Was there any truth in these various allegations of hidden Rothschild influence? The answer is that there was, though the reality was more complex than the Rothschilds’ critics could know. As we have already seen, Nathan Rothschild had good reason to feel loyalty towards Herries, whose patronage had given him his single most important business opportunity, and hostility towards Huskisson, whose monetary and commercial policies he had consistently opposed. However, there was an additional political dimension which explains Nathan’s (at first sight puzzling) lack of sympathy with Herries. When he heard the news of his old associate’s defeat, he did no more than shrug, telling Carl: “Our friend Herries is annoyed because he has been given a poor job. He is annoyed, but I cannot help him. He must be patient, and perhaps he will get another job.” In fact, what interested and pleased Nathan far more was the fact that the Duke of Wellington had emerged from the crisis as Prime Minister.
The cartoonists who depicted Nathan as trying to bribe Wellington or refusing to support his government were only slightly wide of the mark. Not only had the Rothschilds been cultivating the Duke assiduously since his victories over France (which they had, of course, largely financed); more importantly, his conception of British foreign policy accorded far better with Rothschild interests than that of his mercurial predecessor Canning.
George Canning no more believed in “regenerating” Europe than his predecessor Castlereagh. What distinguished the two was Canning’s determination to pursue British interests, with minimal regard for the other great powers. As he put it, famously: “ForEurope I shall be desirous now andthen to read England.” He pointedly declined to take into account “the wishes of any other Government, or the interests of any other people, except in so far as those wishes, those feelings and those interests may, or might, concur with the just interests of England.” This explains Britain’s refusal to sanction the French intervention in Spain, to which Canning had responded with a strong pledge to uphold Portuguese neutrality and recognition of the Latin American republics’ independence from Spain. That did not much bother the Rothschilds, who comfortably played both ends against the middle over Spain. However, in his last years—particularly in his brief period as Prime Minister (April-August 1827)—Canning took bolder steps which did much to alarm the Rothschilds.
There was already a degree of tension in their relationship even before Liverpool’s death. As James said in November 1826, “It would be a mortal sin to be dependent . . . on a Canning.” The feeling was mutual: the following month, when Canning received details of an important speech in Paris from the Rothschilds twelve hours before the official report of the speech from the British embassy, he wrote angrily to his ambassador:
You must make full allowance too for the day which I passed on Saturday. “Good God! what! nothing direct from Paris! Perhaps it is a mere stock-jobbing report.” “Perhaps it is a trick of M. Rothschild’s.” . . . Such were the propos of the morning . . . I hope you will contrive to establish some communication with the F.O. at Paris, that will prevent Rothschild from getting official papers, (news you cannot help), before you.
That this less than friendly figure was to be Prime Minister deeply alarmed the Rothschilds. James immediately anticipated “a very serious crisis on our hands in Spain and in Portugal” and “a complete standstill in business activity” in Paris. For in December 1826, “to defend and preserve the independence of an Ally,” Canning had sent troops to Portugal in support of the young Portuguese Queen Maria, whose claim to the throne was being challenged by her uncle Dom Miguel. Because Miguel had the backing of the reactionary Bourbon regime in Spain, which in turn was supported by France, this raised the possibility of a confrontation between Britain and France. For the first time, the Rothschilds appreciated what a large stake they had in peace between the great powers. For nothing could do more to weaken the price of consols, rentes and every other security they and their clients held than a war. Although Villèle had reassured James in November “that I should not be silly because England and France would never go to war on account of such miserable people like the Spanish and Portuguese,” James had been worried enough about Canning’s attitude “to remain on the sidelines” (that is, to make no major purchases or sales) until the crisis blew over. The appointment of Canning as premier revived these fears of Anglo-French conflict over Portugal. The brothers took the view that Canning was backing the wrong side in what might prove to be a bloody civil war. At an early stage they seem to have made a decision in favour of Dom Miguel, though it is not clear why.
The second reason for Rothschild anxiety about Canning was his anti-Turkish (and therefore pro-Russian) policy over Greece. By 1826 the risings by Greek communities in Moldavia, the Peloponnese and Missolonghi against Ottoman rule had been largely crushed by the Egyptian Prince Ibrahim Pasha (the son of Mehemet Ali). From the point of view of Metternich, this was an entirely satisfactory outcome: another revolutionary threat to the status quo had been thwarted. However, Greek sympathisers in Britain and France, excited by reports of Byron’s death at Missolonghi and of Turkish cruelty, clamoured for some kind of intervention. More seriously, traditional Russian ambitions in the region appeared to revive with the accession of Nicholas I as Tsar. In the hope of averting unilateral Russian intervention on behalf of the Greeks, Canning sent a reluctant Wellington to St Petersburg in April 1826 to agree a joint Anglo-Russian policy. The deal struck effectively gave Russia a free hand in Moldavia, while committing the two powers to impose some settlement on the Turks—forcibly, if need be—which would grant the Greeks limited self-government; a policy which Villèle endorsed in July 1827. The upshot was that in the autumn of 1827 a joint naval expedition was sent to the Eastern Mediterranean and inflicted a decisive defeat on the Ottoman forces at Navarino.
As Villèle himself put it, however, “Cannon fire is bad for money”; and, like Canning’s threat of war over Portugal, his commitment to joint military action against Turkey perturbed the Rothschilds. There were two reasons for this: firstly, they were inclined to share Metternich’s pro-Turkish attitude, even if plans for a loan to Constantinople had come to nothing in 1825; secondly, their relations with St Petersburg had taken a distinct turn for the worse since the appointment as Finance Minister of Count Kankrin, who made no secret of the fact that he regarded the Rothschilds’ 1822 loan to Russia as “useless.”
All this helps to explain why Nathan was so delighted by the emergence of Wellington as Prime Minister in 1828; for it was well known that the Duke disapproved of Canning’s policy abroad, sharing the King’s view that he had played into the Tsar’s hands by turning against Britain’s “ancient ally,” the Sultan. “Consols have gone up because of our [new] Ministers,” Nathan reported gleefully to Carl. “Praise be to God that we have good news, as Russia will wait [before taking further military action], through Wellington everybody is for peace which does not surprise me, for our King in his speeches is nothing but schalom aleichem [peace be with you].” When Mrs Arbuthnot asked Nathan at around the same time “what they thought of the Duke in the City, [h]e said they had unbounded confidence in him.” In the two and a half years of Wellington’s premiership which followed, that unbounded confidence was translated into concrete financial support for a foreign policy markedly different from Canning’s. Not only did Nathan purchase substantial sums of exchequer bills in 1828 (£1 million) and 1829 (£3 million); he also provided Dom Miguel with £50,000, “under the guarantee of the British Government,” to enable him to take possession of his office as Regent in Portugal. At the same time, he floated a £769,000 loan to Miguel’s brother Pedro, the Emperor of Brazil, in an effort to stabilise Brazilian finances, still reeling from the 1825 Latin American debt crisis.6
Predictably, this somewhat confused policy was grist to the satirists’ mill. We have already seen the various references to “Don Miggel’s monish” in the cartoons of 1828. Brazil’s financial difficulties were also ridiculed in The Hue and Cry, a cartoon published in the wake of Pedro’s default on the earlier 1823 loan (see illustration 5.v). Here Nathan is pictured advising Dom Pedro not to pay the British bondholders—represented by John Bull prostrate on the ground. “If you pay them you’ll want more monies,” says Nathan to Pedro, “and that is not convenient just now.” The devil whispers in Nathan’s ear: “Tell him to call it political expediency—you know how easily John Bull is humbugg’d.”
The Rothschilds were equally in accord with Wellington when, against Nathan’s expectations, Russia renewed hostilities against Turkey in 1828. A Russian request for a loan was politely turned down, much to Metternich’s delight, and the broth-ers continued to hope for Russian military reverses throughout the campaign. When, to their chagrin, the Russians won and imposed a modest indemnity on the Turks under the terms of the Treaty of Adrianople (September 1829), the Rothschilds hastened to offer their services to facilitate the payment. Their sole anxiety throughout this, the first of many Eastern crises they would have to weather, was that Wellington might feel obliged to intervene against Russia. As over Portugal, the Rothschild view was now overtly pacifist, as Nathan emphasised to Salomon:
There are some here who want us [meaning Britain] to quarrel . . . with [the Russian ambassador] Lieven . . . and want us to send angry Notes . . . I must tell you Wellington and Peel would like to quarrel with Russia, but in the end we should have to go to war. I am not for demonstrations, and we must see to maintaining peace. What’s the good of quarrelling? The Russians have gone too far, and the world will be angry with us and will say: Why didn’t you do it twelve months ago? If England now says, Yes, we are angry and want to go to war, Austria and France will say, We will remain out—they will leave us in the lurch, and we shall be involved alone. I went to Wellington and congratulated him on peace. He said: “Peace is not yet. It is not yet ratified.” . . . There is dissatisfaction with the Russian Peace in every respect. [But ] the Cabinet has now decided for the present to remain quite calm and not to write a word to Russia, to keep quiet and to let come what may.
5.v: “Sharpshooter,” The HUE and CRY; or JOHN BULL between two Knaves, Stools, and the Heads of Police called to rescue him from Pickpockets. Dedicated to the holders of Foreign Bonds in General (1829).
James neatly summed up the rationality of this pacifism: “If England were earnestly to attack [over] the [Turkish] issue then I assure you that we will suffer a fall of at least 5 per cent over here. If on the other hand the reports from there turn out to be better, then we could get a small improvement.” The connection between international peace and bond market stability was to become a first principle of Rothschild policy in the decade to come.
Strings of Influence
It was not only a shared view of foreign policy which united the Rothschilds with politicians like Wellington or Metternich, however. Where the conspiracy theorists of the 1820s came closest to the mark was when they suggested that private financial interests also played a part.
We have already seen that it was common practice for European politicians of the period to accept favours—ranging from investment tips to outright bribes—from bankers. At the Congress of Aix-la-Chapelle, it was the fact that Baring had sold stakes in his impending French reparations loan to most of the ministers present that made them so eager to postpone the loan when the market unexpectedly crashed. The Rothschilds were adept at playing the same game. Indeed, Amschel was “convinced that we as Jews could not get by without bribing and that the Gentiles have the advantage.” In 1818, for example, the Frankfurt house distributed shares of the Rothschilds’ new Prussian loan not only to other Frankfurt bankers like Bethmann and Gontard, but also to their old sleeping partner Buderus, the Austrian representative at the Bundestag, Count Buol, and a number of other members of the diplomatic corps. In Paris, the political figures who were offered Prussian bonds included Talleyrand.
Another way of securing political influence by financial means was by lending money to such individuals. The most eminent of all French recipients of Rothschild loans in this period was Louis XVIII himself, whom Nathan had advanced £200,000 on behalf of the British government to meet the costs of his return to France in 1814. This did not much endear Nathan to the Bourbon family, however, for he insisted on repayment with interest three years later. By contrast, the loans made in the 1820s to the duc d’Orléans (the future Louis Philippe) were a more long-term investment which paid ample dividends in the subsequent decade. Prussian recipients of loans included the son-in-law of Prince Hardenberg. More routine banking facilities like current accounts were offered to other Prussian officials—notably the ambassador in London, Wilhelm von Humboldt, and the key official during the 1818 loan negotiations, Rother. Because these usually led to the granting of generous overdrafts, however, such accounts often performed the same role as loans. No sooner had Caroline von Humboldt been introduced to Salomon than he asked her point blank “whether he could be of any use to me in the matter of money, and said that his purse was at my disposal.”
Finally, when a more subtle approach seemed appropriate, the Rothschilds gave presents to those they wished to cultivate. As Carl put it, “One must have something when going to see the great and good, either gossip or something to show them.” The roots of the family’s later penchant for collecting art and natural curiosities can be found here; for the brothers prided themselves on their ability to find exotic gifts for jaded palates. They had an advantage in Nathan’s access to the London market, by far the best in the world because of the growing superiority of British trade and manufacturing. In 1816, for example, Nathan sent Amschel two tortoises, one of which he suggested be given to the Elector of Hesse-Kassel. (When they arrived dead, Amschel had them stuffed and presented them to William anyway.) Other luxury goods requested by his brothers for prospective clients included jewelled caskets for the Elector, a horse suitable for a lady and “a carving knife and fork with ivory handles” for “someone who helped us.”
The first British official to benefit materially from his relationship with Rothschilds was, as we have seen, Herries. Though the full extent of his personal stake in the firm’s wartime operations is impossible to ascertain, he was a regular participant in post-war loans like the 1817 loan to the city of Paris. Herries—“your own Buderus over there”—was, as Salomon put it, one of the “important people whose favours are essential.” Another was Lord Stewart, Castlereagh’s brother, the British representative in Paris in the post-war years. He first asked Salomon and James to “speculate for him in rentes” in October 1817, and thereafter became “very friendly with us. Between ourselves he likes to gamble,” reported Salomon, “and I let him share in our business . . . to the amount of 50,000 francs rentes.” This was the case which reminded Salomon of his father’s precept that “if a high-placed person enters into a [financial] partnership with a Jew, he belongs to the Jew.” When Stewart came to them asking for assistance with his English affairs, Salomon urged Nathan to oblige him: “We must routinely accede to this minister’s wishes, as he is everything here, and is helping us to get the loans, the liquidation [of French reparations] and everything, and is the English minister.” Twenty years later James gave the Prime Minister Lord Melbourne’s brother Frederick investment tips during his time as ambassador in Vienna. “Well, Lamb is of the opinion that there will not be any war,” he wrote in a typical letter. “I told him that if he sees that rentes are rising over there then I will buy 24,000 francs of rentes for him in order to resell them at a profit, for he currently has some £30,000 to his credit in London.” British officials who directly borrowed from the Rothschilds included George Harrison and Charles Arbuthnot at the Treasury: the former owed Rothschilds over £3,000 in 1825; the latter borrowed four times as much.
It should be stressed that such relationships were not in themselves illegal—the Rothschilds had every right to extend banking services to politicians and civil servants. However, the brothers privately referred to “bribery” as a feature of their relations with Arbuthnot and with numerous foreign officials, notably the Russian Gervais. And, as the case of Herries illustrates, allegations of corruption in the press could be highly damaging to the career of the politician concerned. Indeed, the brothers had been anticipating a political row of the sort which blew up in 1828 for more than a decade, ever since they first began to worry that their wartime accounts with Herries might not bear close parliamentary scrutiny.
In this context, it is not entirely surprising to find that the Duke of Wellington also banked for a time with Rothschilds. Indeed, it was Stewart who formally introduced the Duke to Salomon and James. The importance of this relationship was probably small in financial terms: the surviving 1825 balance sheet suggests that Wellington did not make much use of his overdraft facility. But in Salomon’s eyes the prestige of being “Wellington’s bankers” was what mattered:
It is a great honour . . . You may say, “What does honour matter? Honour is not money.” As an honest man I tell you that now I prefer honour to money. One cannot do more [with money] than to eat [from the proceeds] and we have enough to eat. [But] food does not taste good without honour. Wellington stands here higher in public esteem than the king himself.
Just two months later, James was already boasting of his influence with the Duke, whom he had “already given various things.”
Wellington, however, was not the most senior British political figure to whom the Rothschilds “gave things.” It is extraordinary to find that the family’s interest in the financial affairs of King George IV predated his accession to the throne by as much as fifteen years. The earliest document referring to “bills of exchange from Prince George to the nominal amount of 150,000 Frankfurt gulden” is in Mayer Amschel’s hand and is dated 1805. Two years later they figure in one of his earliest surviving balance sheets, entered with a discounted value of just over 127,784 gulden—though even this figure he regarded as questionable. For, even as the heir to the throne and Prince Regent, George was regarded as a singularly unreliable debtor. How did Mayer Amschel, then the father of an obscure Manchester textile merchant, come to acquire a bill on the Prince Regent? The likeliest answer is that he bought it from the Elector of Hesse-Kassel, who had made a number of loans to the sons of George III in the 1790s. Ten years later, with Nathan firmly established as a banker in London, the sons of Mayer Amschel turned to these other royal debts with the intention of making Nathan—in Amschel’s somewhat old-fashioned phrase—“court banker” in England. All told, the Prince Regent owed £109,000, the Duke of York £55,000 and the Duke of Clarence £20,000, making a total of £184,000. Only the Prince Regent had ever paid interest on his loan. After protracted negotiations with the Elector’s advisers—and despite the objections of Buderus—the Rothschilds succeeded in buying these debts in return for the equivalent of their face value in consols. Superficially, this was far more than they were worth. In reality, it was an inspired investment—another of Nathan’s “master-strokes.” As Salomon commented: “This makes me a very powerful man.” “There is luck attached to everything English,” he enthused. “Everything touching them turns out happily. So it is with the court of our Elector. The two courts fit together.”
The value of these old royal debts was that, by making Nathan one of the Prince Regent’s creditors, they brought him into direct contact with the officials charged with managing the future King’s troubled financial affairs. And not only his financial affairs: by the end of 1817 Nathan was asking Salomon and James to gather information which might be of assistance to the so-called “Milan commission,” set up to gather evidence against “the great man’s wife”—Princess Caroline of Brunswick—whom he was determined to divorce. In 1822, just after George had finally ascended the throne, a loan of £50,000 was arranged with Nathan, secured on the revenues of his Hanoverian possessions. A year later a further £125,000 was requested. It was at around this time that he came into contact with Sir William Knighton, though the key figure in the loan negotiations was George Harrison, who assured the King of Nathan’s “great loyalty and honesty towards your Majesty . . . in everything relating to this transaction.” As we have seen, Harrison himself borrowed several thousand pounds from Nathan not long after this.
Nor was George IV the only member of the British royal family to whom Nathan lent money in the 1820s. In 1824, for example, he lent £10,000 to the Duke of York on the security of some jewels, as well as giving him 100 complimentary shares in the Alliance Assurance Company.7 The Rothschilds also looked ahead to the next generation. In 1816 the only child of the Prince Regent, Princess Charlotte, was betrothed to a minor German prince, Leopold of Saxe-Coburg, the youngest son of Duke Francis Frederick. The brothers at once recognised Leopold’s potential importance (his new father-in-law was, after all, in his fifties and notoriously sybaritic). When he passed through Frankfurt on his way to England for the wedding, Carl made his move: “We went to see him. He is a good man. We gave him a bill for £700 on you against gold as well as a letter of credit . . . He intends to buy jewellery. Please offer him your services.” Nathan needed no further prompting. By April he was being entrusted with delivery of Leopold’s private correspondence to Germany, and by August a loan of 10,000 gulden was being discussed.
Only the effort Nathan put into cultivating Leopold can explain the brothers’ extraordinary reaction in May the following year to the news that Princess Charlotte had died, apparently extinguishing Leopold’s hopes of power in Britain. “We are unable to write you fully today,” wrote Salomon to Nathan,
because of the heartbreak caused by that disaster, the death of Princess Charlotte. We lost our heads. I still cannot make myself believe that the noble woman died. We received the bad news on Saturday afternoon at five o’clock. We were negotiating with Baring for another million of rentes and we arranged with him that we are going to give him a final answer on Sunday . . . But when he came on Sunday for the answer, our consternation was so great that we told him that we could do nothing for the time being, we are far too confused for it. Unfortunately, we are losing terribly much, my dear Nathan. It is terrible, my heart breaks when I speak about it . . . I can’t write anything about business. We did not do any. We should . . . draw the moral of it: money, honours are worth nothing, we are all only dust; man should give up his pride . . . he should not make himself believe anything; we are mud and dust. It pains me very badly, this unfortunate event.
“Believe me,” Salomon added two days later, “I was so horrified [at the news], that since then I have had no appetite. It is as if my stomach has shrunk and I have never-ending pains in the joints.” Nathan, he assumed, would also be “thrown off his feet” and “made ill” by the news. Yet the brothers were always quick to come to terms with adversity. “Nobody is immortal,” reflected Salomon, “and we have to get over this . . . Unfortunately, our sorrow and sadness cannot bring her back.”
Another bank might have been tempted to end Leopold’s privileged status now that he was a mere widower. Salomon urged Nathan to do the reverse: “According to the English papers the Prince of Coburg will stay in England and is going to remain an important person there. We should show even more friendship towards a man who fell on hard times than before. I ask you to show him more feeling than hitherto.” This accounts for the subsequent efforts of Nathan to arrange life insurance not only for Leopold but for his father, and for the fact that Carl happily put Leopold up at his Naples villa in 1826.
It was to prove an extremely shrewd strategy. For the link forged in these years between Nathan and the man James called “your Coburg” was to prove enduring and mutually beneficial. Not for nothing did one anti-Rothschild writer of the 1840s point out the similarity between the House of Rothschild and the House of Saxe-Coburg-Gotha, those two extended German families which were to rise from obscurity to glory in the course of the nineteenth century. Indeed, theirs was to be an almost symbiotic relationship. The 3.5 million gulden lent to the Saxe-Coburgs by the Frankfurt house between 1837 and 1842 was only one aspect of the connection. Of greater importance was the support which the Rothschilds gave to those members of the family who left Coburg in search of new thrones elsewhere.
Not that the Rothschilds lost interest in the question of the British succession following Princess Charlotte’s death. When the Prince Regent’s brother, the Duke of Kent, set off for Germany to marry Victoria of Saxe-Coburg, he took with him a letter of credit on the Frankfurt Rothschilds. When the marriage produced a daughter, Victoria—who at once became next-in-line to the throne—Nathan hastened to offer the proud father financial advice and his exclusive messenger service. In 1823 he also lent a substantial sum (400,000 gulden) to the Prince of Leiningen, the Duchess of Kent’s son by her first marriage. Nathan’s sons continued to act as the Duchess’s banker after the Duke’s death, occasionally relaying money to her brother Ferdinand of Saxe-Coburg.
Yet even the English royal family were not the most influential of the Rothschilds’ clients and “friends” in this period. For, as historians generally agree, this was an era in which European politics were to a large extent dominated not by Britain but by Austria. As we have seen, the man who made Austrian policy between 1809 and 1848 was Metternich; and he too banked with Rothschilds. Indeed, the relationship which developed between Metternich and Salomon Rothschild may be seen as in some respects the prototype for the relationship which later developed between Bismarck and the Rothschilds’ associate in Berlin, Bleichröder—except that Metternich came to feel far closer to his banker emotionally and intellectually than Bismarck ever did.
Although he came from an aristocratic family with estates in the Mosel valley, Prince Klemens Wenzel Nepomuk Lothar von Metternich-Winneburg was “cash-poor” for much of his long political career. Within a year of their first meetings with him—in Paris during the 1815 peace negotiations—he raised the possibility of a loan of 300,000 gulden with Amschel and Carl in Frankfurt. Metternich had already proved a useful ally to the brothers, supplying political news in Paris, supporting their efforts to secure Austrian financial business and apparently also sympathising with their campaign for Jewish emancipation in Frankfurt. The arrangement he now proposed was that the Rothschilds should advance him 100,000 gulden and sell a further 200,000 gulden of 5 per cent bonds to other investors, all secured on the new estate at Johannisberg which the Austrian Emperor had just given him. However, Carl was reluctant to lend so much to a single individual, no matter how wealthy, recalling how unsatisfactory similar loans had been for Prince Wilhelm. Despite the fact that Metternich continued to prove himself “a great friend of ours”—supporting the requests for noble and consular status—the brothers preferred at this stage to limit their generosity to routine banking services and occasional gifts, like the Wedgwood china Nathan sent him in 1821.
It was in October of that year that Metternich—accompanied by his mistress, Princess Dorothy de Lieven—first publicly accepted an offer of Rothschild hospitality, “taking soup” with Amschel in Frankfurt on his way back to Vienna from Hanover.8 This was interpreted by some observers as a calculated gesture of support for the Frankfurt Jewish community at a time when conflict over the civil rights question was at its height. Less than a year later, Metternich received his thanks: a loan of 900,000 gulden, agreed just six days before the brothers received the title of “baron” from the Emperor. This loan sealed the “friendship” between Metternich and the Rothschilds. At Verona in 1823, Salomon furnished Metternich with cash to meet his (considerable) personal expenses. In Paris two years later, James played host to Metternich, throwing a lavish dinner for “the representatives of the Holy Alliance” which greatly impressed the Constitutionnel newspaper. It commented ironically:
Thus does the the power of gold reconcile all the ranks and all the religions. One of the more curious spectacles our time—rich as it is in contrasts—is that of the representatives of the Holy Alliance established in the name of Jesus Christ attending a banquet given by a Jew on the day that the law of sacrilege is being debated in the chambers.9
A year later James was present at another equally grand soirée. It was in this period that Metternich began to make use of the Rothschilds’ courier service for important correspondence. From this point onwards, he and Salomon shared political news on a regular basis, Metternich informing Salomon of Austrian intentions while Salomon provided him with news he received from his brothers in London, Paris, Frankfurt and Naples. By the end of the 1820s the Rothschilds had begun to provide Metternich—or “Uncle,” as they often called him—with an unofficial diplomatic channel, through which he could relay his political views indirectly and discreetly to other governments.
All of this puts the bitter accusations of David Parish on the eve of his suicide in a new light. The Rothschilds, Parish complained to Metternich, had “understood better than I how to draw you into their [sphere of] interest” and how to secure “your special protection.” It was, he insisted in his letter to Salomon, “the new alliance” between Metternich and the Rothschilds which had ruined him. “Under the protection of Prince Metternich, you succeeded in securing exclusive control over numerous transactions in which I had a moral and legal claim to a substantial share.” If Salomon had given him his rightful cut of the profits from the Austrian and Neapolitan loans, he might have been able to rescue Fries & Co. “But you found it easier and more advantageous to come to an agreement with the Prince over the old rentes operation and in this way to put him wholly on your side.”
Although Parish’s allegations cannot be taken at face value, there was real substance to his claim that an alliance had developed between Metternich and Salomon Rothschild. This can be demonstrated with reference to the contents of the silver box, recently rediscovered in Moscow, in which Salomon kept Metternich’s accounts and private financial correspondence. These long-lost bank statements show that between 1825 and 1826 Metternich was in a position to repay much of the loan of 1822. However, no sooner had the loan been paid off—ahead of schedule—than a new loan for 1,040,000 gulden (c. £110,000) was arranged, roughly half of which Metternich used to purchase a new estate at Plass, and the rest he took as cash. The balance sheet of the Vienna house shows that Salomon retained some 35,000 gulden of the bearer bonds issued by Metternich for the purchase of Plass, on top of which the Prince owed an additional 15,000 gulden. His total private debt to the Rothschilds grew in the succeeding two years to nearly 70,000 gulden. In addition, the Frankfurt house advanced over 117,000 gulden to Metternich’s son Viktor. When Metternich married again in 1831, Salomon was on hand to help resolve the financial difficulties of his third wife, Countess Melanie Zichy-Ferraris.
Nor did the Rothschilds confine themselves to loans and overdrafts. “Our friend Salomon’s devotion always touches me,” remarked Princess Melanie in her diary in May 1841, on receiving a present from him of American deer for their estate near Frankfurt. A few months later she described a visit by “Salomon and James, their nephew Anthony and Salomon’s son and finally Amschel, who made a great point of our coming to dine with him at Frankfurt next Tuesday. James brought me a pretty mother-of-pearl and bronze box from Paris, filled with sweets, which was all to the good.” At Christmas in 1843 Salomon visited the Metternichs at Ischl, bringing “lovely things to the Metternich children, such as tempted their mother to play with them herself.”
Metternich was not the only eminent Austrian to put his private financial affairs in Salomon’s hands. In 1821—in a classic example of financial speculation based on inside information—a senior Austrian commander, General von Wolzogen, asked Salomon to purchase 100,000 gulden worth of metallic bonds on his behalf. His calculations provide a fascinating insight into the dispassionate attitude of one senior military figure to the Austrian military intervention in Italy:
My reasoning is as follows: either it will stay cold, or it will get hot. In the first case, [metalliques] will immediately go up anyway. If it turns hot, then it is probable that the [army?] will march into Naples and in that case I believe they [metalliques] will rise too . . . If peace remains, one can expect high prices. The only question is therefore whether to buy now or after the declaration of war. I am inclined to buy soon . . . But I leave it to you to do as you think best, and indeed not to buy at all if you do not think it advantageous.
Other political figures who feature in the accounts of the Vienna house include Stadion and the influential diplomat Apponyi, as well as a number of the most important families of the Austro-Hungarian aristocracy. Of these, the Esterházys, with their immense estates in Hungary and links to the still wealthier Thurn und Taxis family, were the most important—and problematic. Beginning with £10,000 in 1820 and 300,000 gulden in 1822, the Esterházys borrowed often from the Rothschilds. Three years later Salomon went into partnership with two leading Vienna houses, Arnstein & Eskeles and Simon G. Sina, to float a large 6.5 million gulden loan (at 6 per cent). This was secured on Prince Esterházy’s estates and was intended “definitively to reorder” the family finances. However, balance sheets for the succeeding years show Esterházy continuing to run overdrafts with Rothschild houses in London and Vienna: £28,000 in London in 1825, 2,300 gulden in Vienna three years later. By 1831 matters were bad enough for Esterházy to approach Salomon (through Metternich) for another loan. Although Salomon was hesitant, the Vienna accounts for 1832 put Esterházy’s total debts at 827,000 gulden, and three years later the debt was larger still. When the Prince was succeeded by his son Paul in 1836, there was another attempt at stabilisation in the form of a 7 million gulden lottery loan, issued jointly by Salomon and Sina. Yet another loan (for 6.4 million gulden) followed eight years later—one of a spate of major loans to the aristocracy floated by Rothschilds and Sina in the 1840s. Small wonder Esterházy “spoke very flatteringly of the family” to third parties. As in the case of Metternich, financial ties were inseparable from social and political ties. In London, Prince Esterházy dined regularly with Nathan while serving as Austrian ambassador and received much of his correspondence from Metternich via Rothschild couriers. In Vienna, the relationship appeared so close that in 1822 unfounded rumours appeared in the press suggesting that Esterházy had persuaded Salomon to abandon Judaism.
The strategy of extending credit and other financial facilities to influential but profligate figures like Metternich and Esterházy was a highly effective way of ensuring political goodwill and “friendship.” Of all the private financial relationships of this era, none illustrates this better than that between Salomon and Metternich’s secretary, Friedrich von Gentz. Gentz was an intelligent, conservative and thoroughly venal man of letters—a kind of Central European Edmund Burke gone wrong—who had acquired the habit of selling the influence he had in Vienna for cash long before he came into contact with the Rothschilds. Indeed, for a time it was David Parish whom he regarded as “the matador, the pearl of the merchant class of all Christendom”—a view which was not unrelated to the 100,000 gulden stake Parish had given him in the 1818 Austrian loan. It did not take the Rothschilds long to purchase Gentz’s fickle allegiance. After an initial encounter in Frankfurt, he, Carl and Salomon met at Aix in 1818. On October 27 Gentz recorded in his diary that Salomon had handed him 800 ducats, supposedly the proceeds of a successful speculation in British stocks. A few days later there were more “pleasant financial dealing with the brothers.” Gentz was soon paying regular visits to his new friends, whose apparently instinctive ability to make money deeply impressed him. He had regular business dealings with Salomon thereafter: a minor transaction in late 1820, a small loan at Laibach in 1821, a share in the Neapolitan loan of the same year which earned him 5,000 gulden within a year. His diaries in this period make repeated references to “very agreeable communications” from Salomon; “important financial arrangements” with him; “a proof of real friendship” over breakfast; “matters which, although not so elevated [as diplomacy], were far more pleasant”; and “highly welcome financial transactions with the excellent Rothschild.” The pattern continued throughout the decade. In 1829 Salomon lent Gentz 2,000 gulden “with the most amiable readiness,” bringing his total debts to Salomon and other bankers to over 30,000 gulden. To Gentz, such loans were to be regarded as “donations pure and simple.” Indeed, according to one account, Salomon finally dispensed with the fiction that the money would ever be repaid by paying Gentz an annual retainer, though this did not prevent Gentz from pleading for yet another loan of 4,500 gulden from Salomon, and gratefully settling for 500 gulden to tide him over.
Gentz performed a number of valuable services in return for his money: supplying news and facilitating access to Metternich, for example. In addition, he was responsible for the Rothschilds’ first real foray into public relations. At a time when the brothers were the objects of an increasing volume of negative comment in the press, an experienced and politically influential journalist like Gentz was a useful ally. In 1821 he wrote twice to the editor of the Allgemeine Zeitung to express his “grave dissatisfaction” about recent articles by the paper’s Frankfurt correspondent which had been critical of the Rothschilds. “The constant attacks upon the House of Rothschild,” he argued, “invariably, and sometimes in the most outrageous manner, reflect upon the Austrian government by necessary implication, since, as everybody knows, it is transacting important financial matters with that House, which is not only unimpeachable, but is honourable and thoroughly respectable.” Facing the threat of a ban throughout Austrian territory, the editor of the newspaper was obliged to “promise not to accept . . . anything in future relating to the value of Austrian public securities, or anything whatever relating to the House of Rothschild (at least affecting its relations with Austria).” When Salomon heard that he had been awarded a Russian decoration in 1822, he immediately asked Gentz to arrange for a newspaper article on the subject. Four years later, at Salomon’s request, Gentz himself put pen to paper, writing the first “official” account of the family’s history—or , as he described it, an attempt “briefly and I hope not infelicitously to explain the phenomenon of the greatness of this House.” After Gentz had read it to one of Salomon’s senior clerks and received his “actual pay” from Salomon, it was published in the BrockhausEncyclopaedia. These were the first Rothschild attempts to exert some influence on a generally hostile press, and far from the last. In 1831, with Gentz’s influence waning, Salomon made overtures to the satirist Saphir in the hope of winning his services as a pro-Austrian—and implicitly also pro-Rothschild—publicist.
Money Makes Money
The evidence that the Rothschilds established a network of private financial relationships with key public figures in Restoration Europe is therefore compelling. Yet the conspiracy theorists of this and later periods misunderstood the role of such relationships when they portrayed them as the key to Rothschild power. The image of the Rothschilds at the centre of a web of “corruption” would become a recurrent one in the years after 1830. But it was not, in reality, the bribes, loans and other favours they bestowed on men like Metternich which made them the dominant force in international finance after 1815. It was the sheer scale—and sophistication—of their operations.
In 1822 their old rival Simon Moritz von Bethmann “heard from a reliable source that Salomon Rothschild has stated that the annual balance-sheet of the 5 brothers showed a net profit of 6 million gulden.” As he observed, “This is certainly a case where the English proverb applies: ‘Money makes money.’ Having regard to their industry and judgement, we may expect their business to continue to flourish; indeed, one hopes so, since the overthrow of this Colossus would be terrible.” The evidence now available from the firm’s accounts amply confirms this judgement. In 1815 the combined capital of the Rothschild houses in Frankfurt and London was at most £500,000. In 1818 the figure was £1,772,000; in 1825 £4,082,000; and in 1828 £4,330,333. The equivalent figures for the Rothschilds’ nearest rival, Baring Brothers, were £374,365 in 1815, £429,318 in 1818, £452,654 seven years later and £309,803 in 1828. In other words, having been on a more or less equal footing with Barings in 1815, the Rothschilds’ resources had grown to be more than ten times greater than their principal competitor’s in as many years. While Barings’ capital had actually declined in size, the Rothschilds had increased theirs by a factor of eight. These are astonishing figures.
The explanation for this disparity is not just that the Rothschilds made bigger profits. Just as importantly, they ploughed the bulk of these profits back into the business. Here, the contrast with Barings, which tended to distribute profits to the partners (even in years when the bank made a loss) rather than allowing capital to accumulate, is impressive. Nor did the Rothschilds lose momentum in the succeeding years. In 1836—the next time the partners met to settle accounts and renew their contractual agreement—the capital had increased again to £6,007,707. Such figures as are available for the profits of the individual houses in this period confirm the broad impression of rapid and sustained growth. Even in the relatively sluggish years between 1825 and 1828, the Paris house alone made profits totalling £414,000. Between 1823 and 1829 the profits of the Naples house totalled 7,390,742 ducats (£924,000).
These figures explain the dominance of the Rothschilds on the international capital market in the 1820s; perhaps the only thing that is surprising is that they were not more dominant. Between 1818 and 1832 it has been estimated that N. M. Rothschild accounted for seven out of twenty-six loans contracted by foreign governments in London, and roughly 38 per cent (£37.6 million) of their total value. This was more than twice the value of their nearest rivals, B. A. Goldschmidt. Moreover, the bank’s own figures suggest that this may be an underestimate: according to Ayer, the value of loans issued by Nathan in this period was in fact £86 million. The equivalent total for loans issued by the Frankfurt house in this period was 28 million gulden (c. £2.5 million). In Paris, James came to exercise a near monopoly over French government finance, issuing seven loans with a nominal capital of 1.5 billion francs (£60 million) between 1823 and 1847.
In a sense therefore the French journalist Alexandre Weill was not exaggerating when, looking back in 1844, he declared:
The house of Rotschild [sic] is merely a necessary consequence of the principle of state which has governed Europe since 1815; if it had not been a Rotschild, it would simply have been someone else . . . it is this system . . . dominant throughout Europe, which has created, produced and elevated the house of Rotschild . . . Rotschild reigns and governs on the bourse and in all the cabinets . . .
This was too deterministic a view, of course. There had been moments in the 1820s when the “principles” governing the European states had come close to calling the Rothschilds back out of existence, and it is hard to imagine any other contemporary financier easily taking their place. But Weill was closer to the mark than Richelieu: if there was a sixth great power in the 1820s, it was no longer Barings, but Rothschilds. Small wonder there was such a hue and cry about them.