The endnotes have been substantially reduced in number for the paperback edition. Scholars seeking detailed references should consult the hardback, which also contains a complete bibliography.
ONE Charlotte’s Dream (1849-1858)
1 According to Greville, Gutle frequently went on such excursions and went “constantly to the opera or play.” She was clearly not as ascetic as Borne and others liked to think.
2 Amschel subsequently offered to lease him the house in the Bockenheimer Landstrasse, though Bismarck declined, rightly detecting in Amschel’s overtures an attempt to curry favour. According to that other arch-reactionary the King of Hanover, Amschel did this sort of thing “whenever any foreign Prince or Minister or man of distinction comes to Frankfurt.” At his dinners there was “great grandeur and sumptuousness as to show of plate and luxuries, but he amuses the company by telling them where he bought his fish and meat, and the immense sums he has sacrificed on the occasion ... shewing every moment le parvenu and the narrow minded lender and discounter of bills of exchange.”
3 In 1862, James’s son Salomon James married Mayer Carl’s daughter Adèle. In 1865, Anselm’s son Ferdinand married Lionel’s daughter Evelina. In 1867, Lionel’s son Nathaniel (“Natty”) married Mayer Carl’s daughter Emma. In 1871, Nat’s son James Edouard married Mayer Carl’s daughter Laura Thérèse. In 1876, Anselm’s youngest son Salomon Albert (“Salbert”) married Alphonse’s daughter Bettina. Finally, in 1877, James’s youngest son Edmond married Wilhelm Carl’s daughter Adelheid.
4 The exception was Anselm’s daughter Sarah Louise, who married a Tuscan aristocrat, Barone Raimondo Franchetti in 1858.
5 Her fears may have been confirmed by the couple’s somewhat perfunctory honeymoon, which attracted adverse press comment.
6 Thus Nat and his wife wished to settle £10,000 in consols on Anselm’s daughter Hannah Mathilde on the occasion of her marriage to Wilhelm Carl.
7 Venison can be kosher, but not if killed in a hunt as this almost certainly was.
8 Macaulay reported after dining at Lionel’s in 1859 that “pork in all its forms, was excluded”; instead he was served “Ortolans farcis à la Talleyrand ... accompanied by some Johannisberg which was beyond all praise.”
9 “I hope,” noted Charlotte, “the differences may yet be settled, as in these times of religious excitement, quarrels between Christian clergymen and Jewish patrons of livings would be very disagreeable.”
10 Charlotte’s frequent use of the word “Caucasian” to mean Jewish is an unusual feature of her correspondence. The word was coined by the eighteenth-century anatomist Johann Friedrich Blumenbach to describe one of five racial types he discerned on the basis of measuring skull shapes. As the others were Mongoloid, Ethiopian, American and Malayan, he clearly intended the category to include all European and Middle Eastern peoples.
11 These efforts were not universally appreciated. According to The Times, “The Synagogue of that city [Jerusalem], whose members are known for their deep aversion to every innovation, and to progress in general, have pronounced a sentence of excommunication against all Israelites who should participate either as collectors or donors, in the subscription now open in Europe for the purpose of... establishing at Jerusalem ... an extensive hospital and schools for adults and children of both sexes. Among the persons visited with this anathema are the heads of the different branches of the firm of Rothschild, who have subscribed 100,000 f. towards that charitable undertaking.”
12 An act of 1707 also made it possible for voters to be made to swear the same oath, though this was not rigorously enforced.
13 It is significant that Mayer had also been elected a member of Brooks’s Club in 1841. It was not until 1852 that his brother Anthony also became a member. The brothers were also members of the more overtly political Reform Club. In the same way, Alphonse became a member of the exclusive Paris Jockey Club in 1852 as well as the Cercle de l‘Union.
14 In the same year the old law against Jews owning property was repealed.
15 Salomons was duly re-elected as an alderman, this time for Cordwainer Ward, in December 1847 and went on to become Lord Mayor of London in 1855.
16 He promptly initiated a week of lavish dinners at the White Hart Hotel, drafting in a contingent of French chefs in a calculated appeal to the stomachs of his county neighbours. The local press reproduced the menu, commenting in awe that it had been “served in the best possible taste.”
17 He was one of three names submitted by Russell to the Queen: the others, as she noted in her journal, were a Colonel Fergusson and “another, whose name I cannot remember”—suggesting that Victoria did not attach much significance to the issue: RA, Queen Victoria’s Journal, Nov. 14, 1846. He was in fact Frederick Currie, Secretary to the Government of Bengal. Lionel may have regarded these minor imperial functionaries as unsatisfactory company to keep.
18 Unusually, the Rothschilds stipulated that the title would revert to Lionel’s eldest son if Anthony failed to produce a male heir.
19 It is worth noting that at this time Carlyle was romantically entangled with Lady Harriet Ashburton, the wife of Alexander Baring. However, Carlyle does not appear to have made his opposition to Lionel public, leaving that to papers like the Morning Herald,which referred to Lionel as a “foreigner,” and one of the Tory candidates, who declared Lionel’s proper place was as “one of the princes of Judah, in the land of Judah.”
20 In particular, he appears to have had a soft spot for Anthony’s wife Louisa, to whom he apologised for his earlier attacks in 1848. He dined with the Rothschilds in February 1850 (finding the women “very nice”) and by 1856—7 was in occasional friendly correspondence with Louisa. She appears in Pendennis as “a Jewish lady... with a child at her knee, and from whose face towards the child there shone a sweetness so angelical that it seemed to form a sort of glory round both. I protest I could have kneeled before her too...”
21 Lauch’s letter deserves quotation for the flavour it gives of the politics of the day: “To be candid—I will agree in what every body says viz: that you, dear Baron! were returned by the Catholics whose accession to your righteous cause determined your victory... it was a great wisdom on your part, two months ago to send for me and not to be ashamed humbly to ask me the favour to give you my assistance in the approaching struggle! I resolved—even if you should not help me as I wanted it for my institution to assist you faithfully and fervently—to honour in your eyes my quality of a Catholic Priest... My great plan from the beginning was to determine the Catholic Electors to vote for you in a body—and you cannot imagine what pains and troubles I had to come to this always acting upon them by different agencies and seldom personally influencing, to prevent prejudices to take hold of them. We succeeded just when I began to despair—because we had a most powerful opposition to overcome or to elude... All this whilst I was in hourly danger of being arrested for debts or seeing execution carried out on the premises of the Institution; likewise every word I have written to you on this head is perfect and sacred truth... Now I say all this to you only to add: that you owe me nothing, that I expect nothing and that the Catholic Agents expect nothing from You, That I take upon myself every expense... Honest and honoured I have nothing to ask at this or any time, but that favour which I asked you, now a year ago, when neither you nor I thought of an election Struggle—I have done my duty to you... and my heart doubts not one moment that you will do yours to me.” Lionel does not seem to have obliged on the scale Lauch had hoped for—though he seems to have put him in touch with the exiled Metternich.
22 It is worth noting that Disraeli made a second sketch of Charlotte’s character over thirty years later as Mrs Neuchatel in Endymion. Interestingly, he alludes to that peculiar bitterness in her character which became more pronounced as she grew older and hints at unhappiness in her marriage to Lionel: “Adrian had married, when very young, a lady selected by his father. The selection seemed a good one. She was the daughter of a most eminent banker, and had herself, though that was of slight importance, a large portion. She was a woman of abilities, highly cultivated ... Her person, without being absolutely beautiful, was interesting. There was even a degree of fascination in her brown velvet eyes. And yet Mrs. Neuchatel was not a contented spirit; and though she appreciated the great qualities of her husband and viewed him even with reverence as well as affection, she scarcely contributed to his happiness as much as became her ... [But] Adrian... was so absorbed by his own great affairs... that the over-refined fantasies of his wife produced not the slightest effect on the course of his life.” Inexplicably, Disraeli decided to make the Neuchatels Swiss by origin, so that Judaism is not touched upon. But their history (as custodians of émigrés’ wealth during the French wars) and the description of “Hainault house” make the model unmistakable.
23 According to Bentinck, Disraeli was counting on the Rothschilds acquiring Stowe from the bankrupt Duke of Buckingham “with all its Parliamentary influence”; he also believed Russell’s conduct to be aimed at uniting the Whigs and Peelites. The King of Hanover attributed Bentinck’s attitude to “his former haunts on the turf, and thus his connection with the Hebrews.”
24 Disraeli misunderstood the constitutional position, thinking that “if Rothschild were to go to the table & ask for the Roman Cath[olic] oath, wh: they co[ul]d not refuse him, that he co[ul]d take his seat. The words ’faith of a Christian’ only being in the oath of abjuration, from wh: the Romans were relieved”in 1829. As late as April 1848 he expressed the vain hope that the acceptance of the Jewish bill would unite the Conservative factions.
25 There was evidently a good deal of ill feeling between Mary Anne and Charlotte by this stage. While Lionel and Disraeli talked in the latter’s study after dinner, Mary Anne complained that her husband had “sich fur uns und unsere gerechte Sache während fünf Jahren seines Lebens aufgeopfert u. nur Undank sei ihm fur die großen Bemühungen seines Geistes, seiner Feder u. seiner Lippen zu Theil geworden. Ich ärgerte mich, und konnte daher nicht schweigen, sagte ihr Mr. Disraeli habe nichts verloren und nichts eingebüßt.” A few weeks later, Lionel suggested that his wife ask Mary Anne “why Mr. Dizzy cannot come up to speak with me whenever he sees me; is there any reason why I should cross the room always to speak with him, he [gives] himself such airs.” This was the nadir of Rothschild-Disraeli relations.
26 In this fascinating letter, Russell sets out his own reasons for supporting emancipation—“I believe this country stands in need of God’s blessing and that blessing is granted only to the nations who uphold his chosen people in this their second dispensation”—and contrasts them with the motives of the Radicals who were simply “glad to fight at your expense one of their political questions.”
27 Manners had in fact dined with Lionel before being asked to stand, but Mayer seems to have guessed that he would be; evidently Disraeli was keeping Lionel informed of his party’s intentions. As Disraeli saw it, the erstwhile Puseyite Manners needed to stand primarily in order to convince the rest of the Protectionists of his political reliability. Manners was only one of numerous Conservatives who were happy to dine with the Rothschilds while repeatedly voting against their admission to Parliament.
28 On this motion, Disraeli voted with the majority, i.e., against his own party, though before the debate he introduced a petition against the admission of Jews to Parliament from some of his own constituents in Buckinghamshire, made virtually no contribution during the debate and supported a hostile motion from his own side that Lionel be asked directly whether he would be sworn to the three oaths. It was narrowly defeated.
29 This time Disraeli bravely reaffirmed his belief in the justice of emancipation, after a judicious defence of the House of Lords against Radical attacks.
30 Ironically, Lloyd George would direct very similar abuse at Lionel’s son Natty when he led opposition to the “People’s Budget” in the Lords.
31 A dissertation could be written about Charlotte’s “salon” at Piccadilly, if that is the right word to describe the various different social circles which her letters describe. The most important was of course the Rothschild family itself and related families (especially the Cohens and Montefiores). Occasionally admitted into this quite intimate milieu were the senior clerks and agents’ families (the Davidsons, Bauer, Weisweiller, Scharfenberg, and Belmont); and members of closely connected City families like the Waggs and Helberts. Apart from Gladstone and Disraeli, her political friends included not only the Liberals mentioned above but also Conservatives like Bulwer Lytton, the novelist and MP for Hertfordshire, and Lord Henry Lennox, MP for Chichester and Disraeli’s first Commissioner of Public Works. Also clearly part of the political circle was the editor of The Times, Delane. Overlapping but distinct was the diplomatic circle, composed of ambassadors and the members of the exiled Orléanist royal family. Socially on a par with this group were Charlotte’s grand lady friends like the duchesses of Sutherland, Newcastle and St Albans.
32 Even this temporary residence struck Macaulay as “a paradise”: Lionel told him he had offered £300,000 for the house and its eight or ten acres of garden, but had been refused.
33 The Paris houses of the 1850s and 1860s were Nat’s at 33 rue du Faubourg-Saint-Honoré, which he acquired in 1856; Alphonse’s at 4 rue Saint-Florentin; Gustave’s at 23 avenue Marigny; Salomon James’s at 3-5 rue de Messine; and Adolph’s at 45-9 rue de Monceau, bought from Eugène Pereire in 1868.
TWO The Era of Mobility (1849-1858)
1 Born Israel Beer Josaphat, Reuter had begun his career as a clerk in his uncle’s bank at Gottingen, where he met the telegraph pioneer Karl Friedrich Gauss. In 1840 he started work for Charles Havas’s Paris-based Correspondance Garnier, which translated foreign press reports into French, and in 1850 moved to London, where he established the Reuter agency.
2 Cobden, still fulminating on behalf of the Hungarians, denounced it as an “unholy and infamous transaction”; in fact, like so many loans in this period, the funds raised were earmarked for railway construction.
3 It is nevertheless true that Barings continued to pay interest on the earlier Russian bonds; the idea of prohibiting this did not occur to the British Foreign Secretary, Clarendon, though he was aware that it was going on. Indeed, Russian bonds continued to be traded in London throughout the war.
4 The national debt at this time was around 5,012 million francs. The conversion affected around 3,740 million of this, and implied an annual saving of around 19 million francs.
5 Interestingly, the Paris house was being encouraged by the French government to establish the proposed bank rather than leave the field clear to “English capital,” whereas it was the London house which had the more sceptical view of Turkey’s economic prospects.
6 Thun was replaced soon after and the Frankfurt protest shelved. Bismarck attributed this Austrian volte-face to “the efforts of the Rothschilds”: “That there are occasions when other but purely business considerations are a determining factor on the attitude of the House of Rothschild in financial operations seems to me to be indicated by the success with which Austria has secured the financial services of the House, since I am convinced that, apart from the financial profit to be gained by such transactions, the influence which the Imperial Government was able to bring to bear upon the Jewish problem at Frankfurt profoundly affected the House of Rothschild.”
7 Mayer Carl, he reported, “does not go to big functions, and when he does wear orders, prefers to wear the Greek Order of the Redeemer, or the Spanish Order of Isabella the Catholic. On the occasion of the official reception which I myself gave ... to celebrate the marriage of H.R.H. Prince Frederick William, which he would have had to attend in uniform, he excused himself on the grounds of ill-health, it being painful to him to wear the Red Eagle decoration for non-Christians, as he would have had to do on that occasion. I draw a similar inference from the fact that whenever he comes to dine with me, he merely wears the Ribbon of the Order of the Red Eagle in his buttonhole.” James urged Bleichröder to keep the award out of the Berlin press, for fear of arousing hostile comment.
8 The principal operations of the period were the somewhat unsuccessful 1853 conversion; the 30 million franc loan of 1854, which was shared between the Banque Nationale, the Rothschilds and the Société Générale; and the 15 million franc loan of 1862, handled by the same trio.
9 Loans to the Duchy totalled 19.4 million gulden between 1849 and 1861.
10 Carl had demanded that Jews be allowed to live where they please in the Papal states and that all special taxes and separate forms of procedure in the courts be abolished. In January, Pius IX gave James a written assurance through the Papal nuncio in Paris that these things would be done. However, when Carl visited Rome four months later, he found little sign of improvement; and the Roman Jews formally complained to James the following year. Another appeal on behalf of the Roman Jews was made by Anselm in 1857. Rather as with the Jews of Damascus and later the Christians of Jerusalem, the Jews of Rome became a political “football” between the great powers, in this case Austria and France. The Rothschilds seem to have played one off against the other rather successfully, though without achieving much for their co-religionists.
11 James proposed to establish a new “Comptoir impérial des travaux publics,” but he was at pains to stress that, unlike the Credit Mobilier, it would not “interfere directly in any operation or enterpise on its own account.” In other words, what he had in mind was more like a deposit bank, lending to companies against all kinds of securities in the way that the Banque de France did not.
12 The authorised capital of the Pereire bank was 60 million francs, that of the Rothschild bank 80; but in the latter case no more than 24 million francs was actually paid in, and this was later reduced. The Pereires, by contrast, had paid in the maximum capital by 1862, and sought to invest not only in railways but also in the Madrid gasworks and various mines. Significantly, the Rothschild bank was wound up in 1868—after the Pereire threat had disappeared.
13 Between 1855 and 1859, the Austrian government raised 118 million gulden by selling off the state-owned sections of the Habsburg railway network, though that figure excludes subsequent payments by the companies which bought the lines. This should be compared with a total gross budget deficit in the same period of 576 million gulden.
14 The company also acquired a line on the left bank of the Danube to Szeged, via Budapest, as well as various mining and metallurgical interests.
15 The merger was a relatively profitable one for the Pereires, who were able to exchange the half-finished Franz Joseph line for shares in the new Rothschild company worth 96 million francs.
THREE Nationalism and the Multinational (1859-1863)
1 Between 1860 and 1866, the Credit Mobilier accounted for around 28 per cent of the total deposits of the six biggest deposit institutions.
2 The Frankfurt house took £1 million of the loan and the Austrian National Bank £1.5 million. The 5 per cent bonds were issued at 80 in London—a disastrous investment for those who bought them.
3 The total loan announced by the government was for 700 million francs, of which 500 million were to be issued immediately. The Paris and London houses contracted to buy 285,720,000 francs of 5 per cents at a price of 71 with a 1 per cent commission, and to underwrite a further 214,300,000 francs. The London house issued just 75 million francs, as the market for Italian bonds was less firm than in Paris.
4 Charlotte to Leo, Cambridge, April 28, 1864: “B. D. says that the Baron is a great man, and the great Baroness a greatly prejudiced lady—immensely conservative, viz. illiberal in her prejudices... Mr. Pereire, the Emperor and the English are her favorite aversions. She calls us maniacs, and heaps all the coals of her eloquence upon our press because it declares that the French are not fit for liberty.”
5 It was a sound enough judgement; the issuing houses were able to keep the bonds above par only by massive intervention in the market.
6 Disagreements over American politics may account for the friction between Belmont and members of the London family when he visited them in 1865.
7 There was another abortive attempt to bring Belmont to heel in 1866, but, as James and Alphonse fatal istically pointed out, he had become irreplaceable.
FOUR Blood and Silver (1863-1867)
1 Almost certainly an allusion to Bismarck’s celebrated comment on Austria’s role in the Schleswig-Holstein crisis of 1864: “Il travaille pour le roi de Prusse.”
2 Mayer Carl had his eye on a Grand Cross with a broad ribbon, but the Prussian King William I continued to regard this as too high an honour for a Jew: “Baron von Rothschild,” he minuted, “has developed a bad attack of tape-worm at the approach of the investiture ceremony. I can’t provide a remedy for this, but I could cure Kreuzschmerzen [literally ”cross-ache,“ a pun on the German expression for lumbago].”
3 So damaging was the Alvensleben convention to Bismarck that Bleichröder arranged a special code with which he would notify the Paris Rothschilds of his resignation.
4 The crisis in Poland had sparked a major debate within the British Jewish community, in which Lionel emerged as a leading opponent of intervention on the Poles’ behalf.
5 Characteristically, James also asked Bleichröder “to keep an eye out for old paintings or other antiques because the war against the poor Danes probably has brought many beautiful and interesting pieces on the market.”
6 The government also recovered control of a guarantee fund which had been set up for certain minor lines associated with the Cologne—Minden. Payment was to be partly in cash (3 million thalers on October 1, 2.7 million by January 2, 1866) and the rest in new Cologne-Minden shares.
7 The terms of the Lombard deal were complex: the government guaranteed a 6.5 per cent return on the bonds of the Italian part of the line, extended the concession to ninety-nine years, and freed it from the levy on foreign bonds until 1880. In return the company agreed to construct new lines worth 9 million francs, to reduce its fares and to undertake the expansion of the port facilities at Trieste and Venice at a cost of 15 million gulden, to be repaid over twelve years. Alphonse described the costs of this deal to the company as “almost illusory.”
8 According to The Times, the Austrian Minister of State Count Richard Belcredi “put forth the notion of requiring the Jewish congregations to organise several battalions of volunteers at their own expense. Now as the Jews necessarily undertook the obligations of military service in common with other citizens Count Belcredi’s plan was neither more nor less than an extraordinary tax levied on the Jews, a disguised renewal of the special Jews’ tax.” Anselm wrote to him “that he would close his offices, break off all financial negotiations with the Government and leave Austria if the Minister persisted in carrying out a project which would be so injurious to the Jews. His letter had the desired effect.” When Betty suggested that money be raised for Austrian soldiers who were Jews, Anselm (according to his son Ferdinand) “answered that the money was [to be] equally divided between all soldiers, quite regardless‘of creed, and that a distinction would create a bad effect.”
FIVE Bonds and Iron (1867-1870)
1 The lack of detailed accounts for the period 1852-79 makes it difficult to be sure when the Paris house made its dramatic leap forward ahead of the other houses in terms of capital. We do know that in the five years to 1868 the Paris house made profits in excess of £4 million, an annual average of £800,000. This was very nearly double the average figure for the entire period 1852-79, suggesting that much if not all the credit for the growth of de Rothschild Frères should go to James.
2 Altogether, James left Betty lump sums and annuities worth around 16 million francs, the house at 19 rue Laffitte and its contents, the house at 7 rue Rossini and its contents, as well as use of the houses at Boulogne and Ferrières. Ownership of Ferrières James wished to pass to his eldest son Alphonse and to carry on through the male line according to the rule of primogeniture. This was at odds with French law (which favoured partible inheritance), but James explicitly requested his descendants to put his wishes first! In addition, Alphonse was given 100,000 francs a year for the upkeep of the Ferrières. However, most of the other real estate (Boulogne, 21, 23 and 25 rue Laffitte, 2 rue Rossini, 2 and 4 rue St Florentin, 267 rue St Honoré, the three houses in the rue Mondovi and the Lafite estate) was divided equally between his three sons, with the remainder going to Charlotte and Hélène. On attaining his majority, Edmond was to receive various sums amounting to around 3 million francs. The rest of James’s fortune, including his share in the bank, was divided between Alphonse, Gustave and Edmond (c. 26 per cent each) and Charlotte and Hélène (11 per cent each). Various codicils distributed further sums to his children (400,000 francs), their spouses (300,000) and Salomon James’s widow Adèle (100,000).
3 It was a sign of the widening gulf between the government and the Rothschilds that the loan was underwritten by the Société Générale.
4 The London and Paris houses jointly advanced £1.7 million to the Spanish government, which was to be repaid over twenty years. This debt was then converted into 5 per cent bonds with a nominal value of £2,318,000. As Lionel was heard to observe in January 1870, “whatever might be the condition of the Spanish government as regards money matters it could always raise funds... in England. This is certainly not the result of the peculiar honesty of Spanish administration, but of a vague tradition of the ancient wealth of Spain ...”
5 The syndicate included Fould, Pillet-Will, Credit Lyonnais, the Banque Franco-égyptienne, Oppenheim, the Société Générale and the Banque Impériale Ottomane—one of the heterogeneous combinations so characteristic of the period after 1870.
6 Erroneously, Alphonse described Amadeo as “of all the candidates, the most dangerous.”
7 James’s death considerably enhanced Nat’s influence in Paris; he became the senior figure to whom Alphonse, unaccustomed to taking decisions for himself, turned for counsel.
8 An exemption from the new tax, which would have cost the company around 4 million lire a year, could be bought only by giving the government an advance payment of 22 million lire.
9 Whenever a government imposed a tax on securities—and it happened increasingly often after 1866—the Rothschilds were outraged, predicting collapsing bond prices if not national bankruptcy. Yet, as Alphonse himself on occasion admitted, the effect of such taxes, if they served to reduce a government’s budget deficit, could actually be to strengthen bond prices. This paradox perplexed “practical men” like Alphonse and Natty, so they generally ignored it and continued to denounce such taxes.
10 The Times, Feb. 21, 1867, p. 7, quoting “a mercantile letter from Frankfort”: “This choice was not influenced by party feeling. Baron Rothschild can do a deal of good for our commercial interests, and particularly by insisting on the maintenance of the florin currency, which is essential to our commerce with the South ... There has rarely been such general enthusiasm for a candidate, and all was done without any previous understanding, and even without a regular committee.”
11 After lengthy negotiations, Mayer Carl had secured a 12 million thaler share of this operation. Undaunted, Hansemann revived the scheme by floating the bonds exclusively outside Germany, but the Paris Rothschilds declined to participate, to Mayer Carl’s annoyance.
12 According to Mayer Carl, he and Hansemann “first applied for the concession in 1867”; Oppenheim became involved only ”after all the work has been done by Mr Hansemann and myself.“
SIX Reich, Republic, Rentes (1870-1873)
1 It is worth asking whom Gustave referred to when he used the pronoun ”on.“ The answer would seem to be that this was not just bourse gossip but a Rothschild version of ”sources close to the government,“ if not the government itself.
2 It cannot be entirely coincidental that three days later Lionel sent Gladstone two tickets for the Derby via Granville.
3 The London Rothschilds also intimated to the Prussian ambassador Bernstorff that war would be ”inevitable“ if Leopold accepted. By the 11th, Gustave was writing to Bleichröder ”as if the war between France and Prussia had already broken out.“
4 Lionel told Disraeli that ”the cabinet had been completely taken by surprise: none of them knew anything of foreign affairs except Granville: and Gladstone really believed Cobden’s theory that men were growing to civilised for war.“
5 It is worth noting, on the other hand, that Gustave had himself mentioned the possibility of French designs on Belgium less than two weeks before.
6 ”[Disraeli] gives me the Rothshild view of the war: his friends fear it will be long... they think the Prussians well armed and well prepared; and that neither is a decisive result to be expected for the present, nor can either party acquiesce in a defeat which is not decisive.“
7 It was a sign of Gladstone’s growing wariness towards the Rothschilds that in March 1871 he declined to provide them with ”inside information“ about the international conference then being held in London to discuss this old question.
8 The reparations imposed on France in 1815 had been 700 million francs, in the region of 7 per cent of gross national product. The figure of 5,000 million demanded by Germany in 1871 represented around 19 per cent of GNP.
9 At this stage, communications were so poor that it was impossible to involve the Frankfurt and Vienna houses—that at least was Alphonse’s excuse for not doing so.
10 Unlike the later payments, this was not an especially profitable transaction for the banks; Alphonse felt compelled by the circumstances to charge a low commission of just 0.5 per cent and grumbled that he was only acting under duress.
11 The interest amounted in the end to 301 million francs, slightly less than the value of the railways (325 million), so the final total paid was in fact 4,976 million.
12 Bismarck himself had proposed ”the phased withdrawal from the occupied territory in proportion to the sums paid.“
13 The Prussians agreed to accept gold, silver, banknotes from the central banks of England, Prussia, Holland and Belgium, cheques on the same banks and immediately payable first-class bills of exchange on London, Amsterdam, Berlin or Brussels. In May it was also agreed to accept a further 125 million in French banknotes. From the outset Bismarck and the German bankers opposed the idea of accepting French rentes.
14 At Alphonse’s initiative, and with an eye to ”public opinion,“ the Banque had reduced the interest it charged the government from 6 per cent to 3 per cent.
15 There was never any serious discussion of other possibilities such as amortisable bonds or a lottery loan; rentes were what investors in London and Paris expected from a French government.
16 The main obstacle to this was the existence of an alternative monarchist party around the Bourbon claimant, the duc de Chambord. To draw another Weimar parallel, Alphonse was, on balance, a ”Ver nunftsrepublikaner“; he spoke disparagingly of crypto-monarchists he had to deal with on the Seine et Marne council.
17 This raises the possibility that he never intended to allow Bleichröder or Hansemann into the underwriting syndicate and that the negotiations described by Landes were a sham. That would certainly explain the numerous garbled telegrams. Alternatively, the Berlin bankers wanted their rentes at too low a price.
18 The underwriting syndicate in London was simply a duopoly of Rothschild and Baring and I have assumed that they shared the total of 325 million francs equally; in Paris, the underwriting shares were distributed as follows: de Rothschild Frères 248 million;haute banque (twelve houses, including Fould, Mallet Frères, Hottinguer and Pillet-Will) 362 million; Société Générale 60 million; other joint-stock banks 65 million. The Société Générale was given preferential treatment because of the French Rothschilds’ common railway interests with Talabot.
19 This should be regarded as an upper limit; it seems unlikely that the Rothschilds acted in quite this optimal way. By way of comparison, the Crédit Lyonnais made only 5.7 million francs from the 1871 operation.
20 The desire to minimise the influx of bills on London reflected fears of pressure on the thaler. It is worth noting that Mayer Carl failed to persuade the Seehandlung to entrust the London house with the remittance of money from London to Berlin.
21 In January 1872 the Banque de Paris merged with the Amsterdam-based Banque de Credit et de Depots des Pays Bas to form the Banque de Paris et des Pays-Bas, usually known as ”Paribas“ for short.
22 Bleichröder was convinced that Hansemann was conspiring against him with Harry von Arnim, the Prussian ambassador in Paris. Bismarck certainly disliked Arnim (as did the Rothschilds) and used Bleichröder to communicate indirectly with Thiers via the French ambassador in Berlin, Gontaut-Biron; but the financial significance of this was minimal.
23 The rejection of Hamburg bills reflected the pressure within Berlin to put Germany on to a new gold currency; the Hamburg ”marc banco“ was silver-based.
SEVEN ”The Caucasian Royal Family“
1 A fourth son, Anselm Alexander, had died in 1854 at the age of eighteen; scarcely anything is known about him.
2 Disraeli remembered him fondly as ”a thoro[ugh]ly good hearted fellow, the most genial being I ever knew, the most kind-hearted, and the most generous.“
3 Delane, who had retired in 1877, also died in 1879, though it is possible that he wrote Lionel’s obituary while still working: as today, obituaries were often written well in advance of an eminent figures death.
4 Bleichröder’s son Hans noted sourly that ”few people genuinely mourned because Lionel did not know how to make himself liked and did next to nothing for the poor.“ This is not borne out by the obituary in the Middlesex County Times, June 7, 1879: I am grateful to Lionel de Rothschild for this reference.
5 Carriages were also sent by the Duke of Wellington, Disraeli (now the Earl of Beaconsfield), the Duke of Manchester, the Duke of St Albans and the Duchess of Somerset, to say nothing of numerous ambassadors.
6 To speak of ”generations“ presents problems because of the extent to which the Rothschild generations overlapped: in the period 1827 to 1884 when the fourth generation was born, six members of the third were also born and ten members of the fifth. I am grateful to Lionel de Rothschild for his assistance on this and related points.
7 These premature male deaths were somewhat ”counterbalanced“ by the premature deaths of six Rothschild women: Clementine in 1865 (aged twenty); Evelina in 1866 (aged twenty-seven); Georgine in 1869 (seventeen); Hannah in 1878 (thirty-nine); Bettina in 1892 (thirty-four); and Bertha in 1896 (twenty-six).
8 She continued to comment adversely on his shyness even when he was in his twenties.
9 History was his strong suit. Disraeli once remarked: ”If I want to know a date in history, I ask Natty.“
10 Honours in the ”Little Go“ required knowledge of one of the Gospels in Greek, prescribed Latin and Greek texts, William Paley’s anti-Deist Evidences of Christianity, the first three books of Euclid and arirh metic as well as the fourth and sixth books of Euclid, elementary algebra and mechanics.
11 It has been claimed that Alfred was obliged to decline re-election in 1890 after taking the illicit liberty of looking at the account of someone from whom the National Gallery was considering buying a painting; the difference between what the seller was asking and what he had originally paid he considered ”out of all proportion to convention and decency“ His interest supposedly stemmed from his role as trustee of the National Gallery However, the Bank of England archives do not corroborate this. In fact, Alfred seems to have retired because of ill health despite an attempt by the Governor to persuade him to stay on.
12 Though Flower later married a Rothschild, he appears to have been a homosexual and the intimacy of his friendship with Leo evidently perturbed Charlotte.
13 Leo was elected to the Jockey Club in 1891 and was one of the founders of a motoring club which later became the Royal Automobile Association.
14 To judge by her descriptions of his parents’ intense grief, Salomon was something of a favourite. Natty and Alfred ”found the whole deeply afflicted family awfully calm, with the exception of poor Uncle James, who burst into tears when he saw the travellers, and sobbed convulsively; it was quite dreadful to hear him.—Addy’s intense sorrow is quite alarming, she is so fearfully quiet, and utterly unable to shed a single tear—she speaks—never a word of herself—only of her husband’s qualities; she thinks he was too good to live... Aunt Betty thought he might be in a trance, and would not hear of the last mournful ceremony taking place...“
15 Its extent is usually said to have been 15,000 acres in this period, but a figure of 30,000 seems more likely. In fact, Ferdinand had initially tried to persuade his father to buy him an estate in Northampton shire, but Anselm dismissed the idea, making the very Rothschildian point that the yield of English agricultural land was 1.5 per cent lower than that of Austrian. It was only after his father’s death that he was able to buy Waddesdon (for £220,000 from the 7th Duke of Marlborough).
16 The others were: Charlotte (Nat’s widow)’s medieval abbey des Vaux-de-Cernay at Auffargis, restored for her by Félix Langlais; Gustave’s château de Laversine at Saint-Maximin (Seine-et-Oise), designed by Alfred-Philibert Aldrophe after 1882; James Edouard’s château des Fontaines (Oise), again by Langlais (1878-92); his widow Thérèse’s maison Normande built there by Girard in 1892; as well as a new seaside villa at Cannes (for Betty). Mention should also be made of château de Vallvère à Mortefontaine (Oise), built by Aldrophe for the duc and duchesse de Gramont (Mayer Carl’s daughter Margaretha) in 1890.
17 Leo’s at 5 Hamilton Place, designed by William Rogers of William Cubitt & Co. in the French style; Alfred’s at 1 Seamore Place, purchased from the courtier Christopher Sykes; Ferdinand’s at 143 Piccadilly ; Edmond’s at 41 rue du Faubourg-Saint-Honoré, reconstructed by Langlais after 1878; baronne Salomon James’s at 11 rue Berryer, designed by Léon Ohnet in 1872-8; Nathaniel’s Vienna ”hôtel“ at 14-16 Theresianumgasse; and Albert’s at 24-26 Heugasse (later Prinz Eugen-Strasse), the latter built by Gabriel-Hippolyte Destailleur in 1876.
18 The architect Franz von Hoven took a number of liberties with the original house, moving it back several feet, replacing the old slate front with more picturesque oak timbers and effectively merging what had originally been two very narrow houses, though the interiors were more faithful to the early part of the century. It has been suggested that it was a conscious effort to imitate the Goethe house in Grosser Hirschgraben, which had been renovated in 1863 and had become Frankfurt’s main tourist attraction. In 1890 Von Hoven was also asked to alter and extend the Bockenheimer Landstrasse house, once Amschel’s.
19 A different version of the tea story runs: ”When the curtains were drawn, a powdered footman entered the room, followed by an underling with a tea trolley, and would query politely: ’Tea, coffee or a fresh peach, Sir?‘—’Tea, please.‘—’China, Indian or Ceylon, Sir?‘—’China, if you please.‘—’With lemon, milk or cream, Sir?‘—’Milk, please.‘—’Jersey, Hereford or Shorthorn, Sir?‘ “
20 Ferdinand to Rosebery, undated, c. Sept. 1878: ”[M]y heart is so full that I must pour out some of its contents into your hearing.—Ill as I have been during the whole of my stay with you I assure you to have never felt more happy. I have so often told you that I am devoted to and fond of you that I will not repeat these expressions from fear of annoying and wearying you; but you will allow me to add, that since I have lived under your roof I have learnt to estimate your character more highly still than I did and that I am more devoted to and fonder of you than I ever was ... Pray don’t, as you threatened, withhold your trust from me in the future.—I assure you I am worthy of It.—I have had very few friends in my life, hardly any true ones, and it would grieve me beyond anything if I thought that when we meet there was no longer the free exchange of thought and feeling between us which has existed and on which I pride myself.—I am a lonely, suffering and occasionally a very miserable individual despite the gilded and marble rooms in which I live.—There is but one thing in the world, that I care for; and that is the sympathy and the confidence of the few persons whom I love. Believe me that I am neither low nor morbid nor even sentimental at this moment...“ See also same to same, Feb. 17, 1881: ”You know I love you more than any man in the world“; Nov. 7, 1882: ”I wish Parliament, the Cabinet and Politics at the bottom of the sea, as they have estranged you from me“; May 7, 1884: ”That I am ‘yours’ entirely you are aware of and if I am occasionally ’peculiar’ put it down to my nervous system and not to any other cause.“
21 Of course, the business of gardening was done by small armies of servants: Nathaniel employed enough at Hohe Warte to start one of Austria’s first football clubs; Haldane joked that Ferdinand employed 208 at Waddesdon—almost certainly an exaggeration. In fact fifty gardeners were employed at Waddesdon and at Ascott, though there were a hundred at Grasse.
22 The bequest was valued at £400,000.
23 Interestingly, this was the first time an outsider had been allowed to work in such a capacity; a similar request from the Bleichröders had been turned down.
24 Since the mid-1860s, the system of shared accounts had more or less broken down, so that balance sheets were being drawn up two years late, if at all.
25 These withdrawals make it very hard to assess the actual profitability of the partnership in these years; certainly a bald statement of the capital account would understate total earnings.
26 Ferdinand had no objection to entrusting his share entirely to Albert ”provided only that I don’t suffer any diminution of income.“
27 On total capital of 359 million marks, the Frankfurt Rothschilds had a total income of just 12 million marks, implying a rate of return of just 3.3 per cent. Max and his sons did not try their hands at banking until after the First World War.
28 The house in the Neue Mainzer Strasse was sold, the house on the Untermainkai became a library, and the house in the Zeil became an old people’s home.
29 Fourteen if we include the marriage in 1910 between Edmond’s daughter Miriam and Albert von Goldschmidt-Rothschild, son of Wilhelm Carl’s daughter Minna and Max Goldschmidt.
30 Inscribed on the wall of the mausoleum in Hebrew and English were the following lines:
She opened her lips with wisdom
And in her speech was the law of kindness
My darling wife.
If I ascend up into heaven
Thou art there
If I lie down in the grave
Behold I find thee
Even where thy hand leads me
And thy right hand supports me.
He also donated money to the tuberculosis hospital in Brompton Road and St George’s Hospital at Hyde Park Corner.
31 A Bischoffsheim, a Cohen or a Morpurgo was considered suitable, but not a Sichel or a Davidson. The latter family’s reputation was badly damaged by the suicide of one of its members, which was evidently occasioned by his own bankruptcy
32 John Sholto Douglas, the 9th Marquess of Queensberry, is best known as the father of Lord Alfred Douglas, the lover of Oscar Wilde. A “homophobe” avant la lettre and quite mad, Queensberry was convinced that Rosebery was drawing his eldest son Lord Drumlanrig (then Rosebery’s private secretary) into the homosexual milieu. In August 1893 he sought to confront Rosebery with a horsewhip at Bad Homburg, though he was dissuaded by the effectual combination of the police and the Prince of Wales. When Drumlanrig shot himself in October 1894, Queensberry was convinced he had committed suicide to avoid blackmail over his relations with Rosebery, whom he denounced as a “Snob Queer” and “that cur and Jew friend Liar Rosebery.” When Wilde took Queensberry to court for libel, a letter from Queensberry was read out in court which referred to Rosebery (and Gladstone); this made it more or less inevitable that Wilde would be prosecuted for homosexuality after the Queensberry trial, lest the government appeared to be protecting him. According to one account, Rosebery considered trying to help Wilde, but was told by Balfour: “If you do, you will lose the election.” The first trial of Wilde failed to reach a verdict; there would not have been a second, the Solicitor General Sir Frank Lockwood confided, “but for the abominable rumours against Rosebery.”
33 Another unpleasant fantasist, Billing claimed that Rosebery’s son, along with Evelyn Achille de Rothschild, had encouraged his campaign against the supposed 47,000 “perverts” in the British establishment and, grotesquely, that both men had in fact been killed to silence them.
34 The weakness of this identification lies in the absence of any allusion to religion.
35 It was this money which helped finance Lord Carnarvon’s fateful 1922 expedition with Howard Carter to find the tomb of Tutankhamun.
36 The Empress Elizabeth paid a visit to Ferdinand and Alice at Waddesdon in 1876, riding and dining with them. Ferdinand also held a ball in honour of Crown Prince Rudolf when he visited London two years later.
37 Interestingly, Mayer Carl suspected Bleichröder of intending to convert to Christianity.
38 According to the French ambassador George Louis in 1908, William II invited the Rothschilds to re-establish a house in Germany; this seems to have been a figment of the ambassador’s imagination.
39 These ranged from large balls to routine levees and private games of whist.
40 For example, Lionel gave a dinner in May 1865 attended by “the Duke of Cambridge and Colonel Mac- donald, Prince and Princess Edward of Saxe-Weimar, the Duke and Duchess of Manchester, the Duchess of Newcastle, Lord and Lady Proby, Lord Hartington, Lord Sefton [and] Lord Hamilton.” To Charlotte’s anger, the Duchess of Manchester did not reciprocate.
41 Hence the lines in Iolanthe: “The shares are a penny and ever so many are taken by Rothschild and Baring; And just as a few are allotted to you, you awake with a shudder despairing.”
42 Their friendship was close enough for the Prince to attend Ferdinand’s funeral.
43 I owe this reference to Professor Stanley Weintraub. When Anthony died, the Queen wrote to her son: “You will be very sorry for poor Sir Anthony Rothschild who was so very kind and loyal and so fond of you and a good man.”
44 Biddulph was master of the Queen’s household from 1851 and keeper of the privy purse from 1867. He had to withdraw his initial advice that a Jewish peer would be unable to take his seat in the Lords.
45 Revealingly, she described Natty as “a handsome man, of about 38 or 40, with a fine type of Jewish countenance” when she met him for the first time (in his capacity as one of Disraeli’s executors).
46 Alexander Baring had been created Baron Ashburton in 1835, Samuel Loyd (of the London and Westminster Bank) had been created Baron Overstone in 1850 and George Glyn had subsequently been created Baron Wolverton.
47 In fact the Queen continued to resist, but when Gladstone resubmitted his original list unaltered, she tacitly acquiesced.
48 According to family legend she was told to get off a newly planted flower-bed. However, the Queen’s journal merely records that “Miss de Rothschild... most kindly purposely had the road widened to enable my donkey chair to go along it.”
49 In 1835 Thomas Raikes had recorded a similar conversation, though this was probably an apocryphal story: “When Rothschild was at Vienna, and contracted for the last Austrian loan, the Emperor sent for him to express his satisfaction at the manner in which the bargain had been concluded. The Israelite replied: ‘Je peux assurer votre Majesté que la maison de Rothschild sera toujours enchantée de faire tout ce qui pourra être agréable à la maison d’ Autriche’ .”
EIGHT Jewish Questions
1 Interestingly, he did this only after Minna’s death.
2 Gustave’s daughter Zoé married Baron Léon Lambert of the Belgian agency in 1882 and a year later her cousin Béatrice married Maurice Ephrussi, who was involved in the French Rothschilds’ oil business in Russia. In 1892, Gustave’s daughter Bertha Juliette married Baron Emmanuel Leonino; and in 1913 Edmond’s son James Armand (usually known as “Jimmy”) married Dorothy Pinto.
3 Lionel Louis Cohen, Chairman of the organisation’s Executive Committee, was in practice the more important figure.
4 Not all these charges went unchallenged. For example, Drumont was sued for alleging that a parliamentary deputy had taken bribes from Rothschild to pass a piece of legislation convenient to Banque de France.
5 Edouard fought his duel, which was typically French in that neither party was killed. Robert’s challenge was not accepted because his antagonist, the comte de Lubersac, was declared too young to fight by his seconds.
6 The figure is for all Jewish emigration in the period 1881-1914. On average 5,000 arrived every year in Britain between 1881 and 1905, though the majority did not stay, continuing on to the New World, principally the United States.
7 It is striking that the Rothschilds specified in their foundation’s charter that “no condition regarding the religious denomination of any nominee for a professorship shall be attached to any of the Chairs, and in accordance with that, religious or confessional status shall not in any instance be grounds for exclusion in filling a Chair or a position in the research institution.” This was as prescient as it was—ultimately—inef- fective.
8 100,000 francs to be invested to provide dowries for daughters of officials of the Chemin de Fer du Nord; 60,000 francs for the poor of Ferrières, Pontcarre and Lagny; 1,000 francs a year for public works in the same localities (implying a capital sum of around 25,000 francs); 250,000 francs to the Jewish hospital in the rue Picpus; and 200,000 francs to the Jewish Charities Commission.
9 The “family council” was a typical figment of Herzl’s imagination: in many ways he exaggerated the Rothschilds’ power in much the same way as Drumont and the other anti-Semites. The Address was subsequently published as Der Judenstaat.
NINE “On the Side of Imperialism” (1874-1885)
1 The organisation of the Morgan group was indeed somewhat similar to that of the Rothschilds: it was a partnership between three houses, one in New York, one in Philadelphia and one in Paris. After J. P. Morgan’s reorganisation in 1895 these were called: J. P. Morgan, Drexel & Co. and Morgan, Harjes. The London house (J. S. Morgan until 1910 when it became Morgan Grenfell) was always run separately.
2 There is some reason to doubt them. In 1906 Leo told his Paris cousins: “We ourselves discounted £28,000,000 of bills this year, of which £12,000,000 have been for your account.” That figure would have made Rothschilds by far the biggest bill-broker in the London market.
3 Gross direct plus portfolio investment in the period 1990-95 was just under 12 per cent of GDP
4 This total includes a small number (nine) of substantial loans—totalling £526 million—which were issued jointly with other non-Rothschild banks, mainly Barings but also J. S. Morgan and, in one instance, Schröders.
5 The title of Khedive was purchased from the Sultan by Ismail in 1867 in return for an increase in the Egyptian tribute to Constantinople from around £337,000 to £682,000.
6 According to the concessions granted in 1854 and 1856, the Khedive Said was given preference shares in Lesseps’s Compagnie Universelle du Canal Maritime de Suez, the interest on which accounted for 15 per cent of its net profits. The Khedive also bought 96,517 ordinary shares in the first subscription, just under a quarter of the total, for which he paid £3.56 million (largely in 10 per cent treasury bills); and his nephew Ismail took up a further 85,606 shares on becoming Khedive in 1863 (though some of the total of 182,123 shares must subsequently have been sold, as only 176,602 were available for sale in 1875). On all these shares, the Khedive was supposedly entitled to a minimum 5 per cent dividend. In return, the Company was given a strip of land rather wider than was needed for the canal itself, exemption from tax and (under a secret annexe to the second concession) free forced labour for the completion of the canal. Moreover, as a result of legal action taken by the Company against the Khedive, he had to pay it a further £3.36 million; to raise the money, he had to mortgage his share coupons for twenty-five years. By 1875 the Egyptian Treasury had paid £16 million for the construction of the canal and had borrowed £35.4 million at rates ranging from 12 to 27 per cent.
7 It was originally intended that only half the coupons due on external debts would be redeemed in cash, the remainder to be paid in bonds carrying 5 per cent interest that would mature five years later; within three months even this was abandoned.
8 The figure was slightly less than £4 million because the Khedive’s shareholding turned out to be slightly smaller than stated in the contract (176,602 instead of 177,642). This constituted a 44 per cent shareholding; the remaining 56 per cent was largely in French hands.
9 This seems unlikely. It is true that no correspondence exists to indicate that Alphonse knew of the transaction before it became public on November 25. But Lionel could not have raised the money without the assistance of the Paris house. The possibility cannot be ruled out that there was telegraphic communication, the records of which have not survived.
10 In strictly financial terms, that was the moment to sell. However, it was not until 1979 that the government sold the shares, by which time they had fallen in value to £22 million, in real terms rather less than their original purchase price.
11 Nor could the French complain that they had been wholly excluded from the profits of Egyptian insolvency: the Credit Foncier did acquire the Khedive’s rights to 15 per cent of the Canal’s revenues for 22 million francs in 1880.
12 It is possible that the French house took a share in this loan; however, Alphonse’s letters make it clear that he supported Disraeli’s policy
13 In fact, Lionel had intimated to Disraeli that he would not give Russia financial assistance as early as October the year before.
14 “Turkish as I have always been, I am astonished at the Turkish feeling everywhere.”
15 The total debt was reduced from 237 million to 142 million Turkish pounds and the annual charges from 15 to just 3 million—i.e. from 6 per cent to just 2 per cent of the capital sum. This was a generous if realistic settlement.
16 By 1914, Germans held 22 per cent of the Ottoman public debt, compared with figures of 63 per cent for France and 15 per cent for Britain.
17 Baring had been a member of the board of the Caisse since 1877 and served as one of the Anglo-French Comptrollers in 1879. After a brief tour of duty in India, he had returned to Egypt in 1881 to become consul-general. With the abolition of dual control in 1883. financial power was effectively transferred to him as British Agent, a post he retained until 1907.
18 The surviving balance sheets indicate substantial holdings of Egyptian paper, e.g. £144,348 of Suez Canal shares in 1886.
TEN Party Politics
1 Disraeli was created Earl of Beaconsfield in 1876, but he will continue to be referred to as “Disraeli” to avoid confusion.
2 Emma requested that Gladstone send her, by way of “remembrance,” “a little chip when you remove a branch from one of your beautiful trees.”
3 Most of the documents detailing Disraeli’s financial dealings with the Rothschilds were apparently destroyed when he died, so it may be that they assisted him in more ways than this account suggests.
4 Other regular visitors included Henry Calcraft (twenty visits), Permanent Secretary to the Board of Trade, the banker Horace Farquhar, the Austrian diplomat Albert Mensdorff and the Russian ambassador Baron de Staal.
5 Harcourt’s Ground Game Act had given tenants equal rights with landowners to kill ground game and was much resented by dedicated hunters like the Rothschilds.
6 It is impossible to establish the details of this extraordinary affair because “papers in the case were put away in the drawer of the Secretary’s cupboard.”
7 As Bouvier notes, the Rothschilds now shared the spoils of government bond issues with an elite of joint-stock banks: the Credit Lyonnais, the Société Générale, the Comptoir d’Escompte and Paribas.
ELEVEN The Risks and Returns of Empire (1885-1902)
1 Revelstoke had in fact been a guest at Tring in February 1890: “It is rather amusing to see the heads of the two great rival financial Houses together,” noted Edward Hamilton. “They take stock of each other with jealous eyes, the jealousy being somewhat ill-disguised.”
2 As usual, the Rothschilds charged a fee and costs amounting to £6,000, though in fact the money does nor even seem to have crossed the Channel.
3 The other members were Walter Burns of J. S. Morgan, Everard Hambro, Charles Goschen of the Bank of England, Herbert Gibbs; George Drabble of the Bank of London and the River Plate. There was also a French representative (Cahen d‘Anvers) and a German (Hansemann). The committee met regularly until December 1897.
4 It has recently been suggested that the Rothschilds’ interest in the bullion business had waned by the 1870s because of a lack of commitment on the part of Anthony. However, it is worth noting that as late as 1875 a nominal fine of £5 (plus £1 8s costs) was imposed on him for allowing excessive smoke emissions from the refinery—hardly a sign of inactivity.
5 Pierpont Morgan was resentful of the Rothschilds’ de haut en bas manner: “[H]aving anything to do with Rothschilds & Belmont in this matter is extremely unpalatable to us and I would give almost anything if they were out. The whole treatment of Rothschilds to all the party, from Father downwards[,] is such, as to my mind, no one should stand.” Natty never called on Walter Burns, the resident senior partner at J. S. Morgan; Burns always came to New Court.
6 Between 1865 and 1890, £121 million worth of US railway stocks were issued through London merchant banks, of which Rothschilds were responsible for just £800,000. It was not until 1908-9 that New Court undertook major issues totalling £6 million for the Pennsylvania Railway and the Grand Trunk Pacific line.
7 The other British delegates at Brussels were Sir Charles Rivers-Wilson, Comptroller General of the Public Debt Office, Sir Charles Fremantle, Deputy Master of the Mint and the bimetallist Sir William Houldsworth. The Rothschild plan was in many ways more practicable than the two other plans presented to the conference by Adolf Soetbeer and Moritz Levy.
8 This was around 2.5 per cent of total Rothschild profits; as a percentage of the total Spanish budget, the revenue received by the government was a little less than 1 per cent.
9 In 1887 South Africa had accounted for 0.8 per cent of world gold production; by 1892 the figure was 15 per cent and by 1898 25 per cent.
10 The price was raised still higher—[o above £79—bya similar agreement in 1899.
11 The other life governors were to be Rhodes, Alfred Beit, F. S. P Stow and Baring Gould, though the last was ultimately excluded at the insistence of either Barnato or Rhodes. After much negotiation, it was agreed that the governors should receive 25 per cent of all annual profits in excess of £1.44 million, a right they enjoyed until 1901.
12 Of the £1 million capital, Natty provided £10,000.
13 In later versions of Rhodes’s will, this idea was transformed into the more realistic scheme for Oxford scholarships to encourage (in Natty’s words) “Colonials and even Americans to study on the banks of the Isis and to learn, as Rhodes did there, to love his country and to make it prosperous.” Any remaining interest on his fortune was to be used by the Trustees “in the interest of, for the development of the Anglo-Saxon race.” In this final version Natty had in fact been replaced as a Trustee.
14 The Uitlanders’ main grievance was that in 1890 the Transvaal government had effectively disfranchised them by extending the residence qualification necessary for the right to vote in elections to the First Volksraad and the Presidency.
15 The loan was subsequently issued in Germany.
TWELVE Finances and Alliances (1885-1906)
1 Note also the Goncourts’ comment: “[D]ans cette ancienne cite [Samarcande] ... on ignore qui’ilyaen Europe un pays qui s‘appelle la France, on ignore qu’ilyaun homme politique du nom de Bismarck, on sait seulement qu‘il existe dans cette Europe un particulier immensément riche, qui s’appelle Rothschild.”
2 And by late 1897 McDonnell was negotiating with Natty about the possibility of Rothschild financial support for Sudanese railways.
3 From a low of 3 roubles to the pound in 1874, the rouble appreciated to 4.67 in 1887, then fell back to 3.57 in 1890. It was initially stabilised at a rate of 3.88, then revalued to 9.45 in 1897.
4 Leo added revealingly that “it would have been better if he had refused at once—[but] the finance minister fortunately is a good practical man of business & will do nothing to spite the R[othschild]s as people imagined.”
5 The Gunzbergs were a Jewish family who had made their fortune in the vodka business and then diversified into banking and mining.
6 Alphonse also cited the Tsar’s enthusiasm for the occult as a cause for concern.
7 Alphonse was equally suspicious of the Kaiser’s short-lived aspiration to woo the working classes.
8 In November 1897 the Germans seized Kiao-Chow, the main port of the Shantung province, a move partly influenced by Salisbury’s refusal to give them control of Samoa as they had requested in 1894; the Russian demand for a “lease” of Port Arthur in March 1898 prompted a British naval response.
9 Chamberlain favoured an alliance of powers against Russia, foreseeing the piecemeal partition of China if Britain continued to act alone as over Wei-hai-wei.
10 However, there was no substance to the suspicion that Natty tried to push Moberly Bell out of Printing House Square during the financial reorganisation of The Times in which he had a hand in 1907-8. In Schwabach’s view Natty was “by no means particularly pro-German” and “would not dream of allowing German influence on the paper.”
11 Warburg applied for £1 million but had to be content with £26,000—still a substantial sum.
12 Hamilton to Asquith, Jan. 22, 1907: “[T]he state cannot raise an indefinite amount of money. We all thought so during the Boer War, but we now know that we have damaged our credit very materially by the amount we borrowed during that war.”
13 He was also awarded the Grand Cross of the Order of Francis Joseph of Austria.
14 As usual in the Third Republic, there was a political dimension to this financial problem: Paul Cambon claimed that Rouvier had speculated on a rise in Russian bonds on the basis of Delcassé’s assurances that there would be no war. Delcassé called Rouvier a man “who would sell France for a speculation on the stock exchange.”
15 “Naturally,” Natty reported in a revealing postscript, “I have given the most categorical denial & I have done all in my power to prevent the Jewish writers in the International Press from attacking Russian Finance.”
16 Stolypin replied vaguely that he was “contemplat[ing] legislation for the amelioration of the lot of the Jews in Russia.”
THIRTEEN The Military-Financial Complex (1906-1914)
1 Natty also kept Lord Salisbury informed about foreign purchases of Maxim guns, which he regarded as a sign of bellicose intent.
2 The meeting was certainly not a purely Conservative affair: Schuster and Avebury were both present and also signed the earlier petition, but their criticisms of the budget were very different from Natty’s and Schuster declined to join the Budget Protest League set up to continue the campaign.
3 As Leo commented, “It certainly wants a great deal of tact to steer clear of Scylla and Charybdis, i.e. to work for Haldane on Friday and to speak publicly against his policy on Tuesday.”
4 Cutting from Western Daily Mercury, Jan. 10, 1910: “Lord Rothschild ... knowing that this is a Free Trade country with a good deal of money to spare, gathers his money together and loans it to foreigners. And very properly! In a speech in the House of Lords not so long ago, he quoted his father as saying that there was nothing more fruitful for the trade of a country than the fact that it was able to advance money to foreign lands. I don’t know why he quoted his father, unless he wanted to prove that wisdom is not always hereditary (laughter).” The two continued to quarrel publicly for many months. In 1913 Natty attacked Lloyd George’s use of funds from the National Insurance scheme for building houses as “jerry building speculation.”
5 Sassoon was nevertheless adopted as the Conservative and Unionist candidate and won the seat.
FOURTEEN Deluges (1915-1945)
1 Rumour had it that his debts were in excess of £750,000. Thereafter, Walter was effectively pensioned off with an allowance to finance his researches and the Tring museum.
2 Though it should be noted that like his brother he did dismally at Cambridge, obtaining a Third in finals: theirs was a talent unsuited to established academic institutions.
3 When he came across the property he was delighted to discover that his father already owned it.
4 I am grateful to Miriam Rothschild for details of her father’s life.
5 He was killed on the same day that Evelyn died of his wounds in hospital.
6 According to Cohen, “Her immaculate butler, Lester, used to open the door and proclaim, as though he were announcing a visitor: ‘The Zeppelins, my Lady.”’
7 Walter served on committees of the Jewish Board of Guardians and the Jewish Peace Society; Lionel succeeded Leo as treasurer of the Board of Deputies; and the presidency of the United Synagogue remained in Rothschild hands until 1942.
8 He and his wife asked to be buried in Palestine after their deaths (in 1934 and 1935 respectively), though this did not happen until 1954. The PICA’s assets were donated to the state of Israel after Jimmy’s death in 1957.
9 By contrast, Rothschild links to North America were few: the French house raised money for the Compagnie du Nord with a $15 million bond issue in New York, and returned the compliment by investing—unwisely, as it proved—in the New York City Interborough Rapid Transit.
10 By 1928 it was operating in twenty-two different countries with a host of different interests in metallurgy and chemicals.
11 After an initial period when the bidding was done by telephone, it was decided to hold a formal meeting in the Rothschild office. Represented were the four bullion brokers—Mocatta & Goldsmid, Pixley & Abell, Sharps & Wilkins and Samuel Montagu—and the other major refiner Johnson Matthey. Quaintly, all the bidders were given a small Union Jack flag which they could raise when they needed to telephone their head offices. When a flag went up, the bidding was suspended until it was lowered again.
12 The South African mines entrusted their agency to the South African Reserve Bank in 1926 and in 1932 the Bank of England took over the role of principal seller, though N. M. Rothschild continued to act as the Bank’s agent.
13 Interest on the loan was charged at 4 per cent until the end of 1933 and 5 per cent thereafter; the money itself was from the French Rothschilds’ private fortunes: Edmond put up 70 million francs, Edouard 35 million, Robert 15 million, Henri 10 million, his son James 3 million and Philippe also 3 million.
14 After dabbling in cinema, Philippe eventually devoted his energies to developing the vineyards on his father’s estate at Mouton. It was he who introduced the practice of château-bottling after the war.
15 Rothschild, Garton and Rothschild, Rothschild gardens, pp. 148ff. The offer was refused.
16 I am grateful to Miriam Rothschild for this information.
17 33 rue du Faubourg St Honoré was acquired by the Cercle de l‘Union Interalliée in 1920; two years later the house in the rue Berryer was given to the state; and the villa Ephrussi on the Riviera was left to the Académie des Beaux Arts in 1934.
18 Anthony’s daughters Annie and Constance died in 1926 and 1931; Natty’s widow Emma in 1935; and Leo’s widow Marie in 1937.
19 According to Bower, he went so far as to stuff a bundle of Ultra documents through the Soviet embassy’s letter-box.
20 The fact that the government explicitly denied that Victor Rothschild was the “fifth man” in 1986 did not prevent an entire book being written in 1994 insisting—on the basis of wholly circumstantial evidence—that he was. To some extent, Victor’s dabbling in the Byzantine internal politics of MI5—in particular, his relationship with Peter Wright—was to blame for encouraging this notion. As Victor discovered while at the CPRS, Wright firmly believed that the former director-general of MI5, Roger Hollis, had been a Soviet agent. (Victor also knew of Wright’s involvement in the MI5 attempt to smear Harold Wilson and other Labour politicians as communists after 1974.) When speculation began about his own role following the exposure of his friend Anthony Blunt in 1979, Victor rashly turned to Wright, now living in embittered retirement in Australia. In the belief that the allegations against Hollis would distract attention from himself, Victor encouraged Wright to collaborate with Chapman Pincher on the book Their trade is treachery (1981). This backfired badly when, five years later, Wright decided to publish his own book Spycatcher in defiance of the British government. The ensuing trial brought Victor more unwelcome publicity. In a final effort to clear his name, Victor wrote a letter to the Daily Telegraph in which he demanded public exoneration from the head of M15. Mrs Thatcher’s response, though formally sufficient, was frosty in its tone—reflecting her reluctance to comment on intelligence matters: “I am informed that we have no evidence that he was ever a Soviet agent.”
21 The phrase derived from the fact that only the 200 largest shareholders in the Banque de France could vote at its General Assembly.
22 They were the Clementine Interdenominational Girls’ Hospital at Bornheimer Landwehr; the Baron Carl von Rothschild public library; the Anselm Salomon von Rothschild Foundation for the Arts and the Old People’s Home for Jewish Gentlewomen named after Wilhelm Carl and Mathilde.
23 The Grüneburg house was destroyed by bombs in 1944, but the house at Königstein survived.
24 This was a complex operation for two reasons: first, the other major shareholders, the Gutmanns, had to be bought out; second, the transfer had to be made indirectly via Swiss and Dutch institutions to avoid possible confiscation by the British government in the event of a future war.
25 Anthony became appeal chairman in 1939 as well as being chairman of the Emigration Planning Committee for Refugees. He, Lionel and Jimmy were also on the appeal committee of the Council for German Jewry set up in 1936.
26 Victor had experienced at first hand the English version of anti-Semitism: at Harrow he remembered being called a “dirty little Jew,” and in 1934 (when he was twenty-four) he had been refused membership of a “road house” and country club in Barnet on religious grounds.
27 The second sentence did not appear in the official minutes, but was reported in the press.
28 For example, Edouard was incensed when, following the recovery of Algeria in 1942, the Free French General Giraud failed to restore the Crémieux legislation granting citizenship to the Algerian Jews.
29 The proceeds supposedly went to French war orphans.
EPILOGUE
1 I am grateful to Sir John Plumb for this reference.
2 Jimmy had been one of those who donated £5,000 towards the purchase of the cash-strapped Churchill’s house at Chartwell in 1946 to allow the Premier to go on living there.
3 Construction on the Churchill Falls did not begin until 1966; but in 1974, just three years after the plant had been opened, a new government in Newfoundland decided on nationalisation, paying Brinco $160 million in compensation (compared with total construction costs of $1 billion).
4 Anthony gave Palace House at Newmarket to the Jockey Club in 1944 and Ascott to the National Trust in 1950; Jimmy left Waddesdon to the National Trust in 1957; Mentmore and its contents were sold in 1977 and Tring is now a school run by the Arts Education Trust. In France, the villa Rothschild in Cannes passed out of family hands, as did the house at Boulogne, the châteaux des Fontaines, de la Muette and de Laversine, and the houses in the rue Saint-Florentin and the rue du Faubourg-Saint-Honoré.
5 Siegmund Warburg had proposed such a merger to Edmund as early as 1955.
6 Other examples from this period included the former chairman of the Electricity Council, Sir Francis Tombs, who became a non-executive director in 1980, and the former Under-Secretary for Trade, lain Sproat, who joined N. M. Rothschild as a consultant after losing his seat in the 1983 election.
7 N. M. Rothschild paid $9.2 million for a 9.9 per cent shareholding in Smith Brothers and $7 million for a 51 per cent stake in what became Smith New Court—in all, an investment of around £10 million. Big Bang ended the strict separation of banks, brokers (who dealt with the public) and jobbers (who executed transactions on the stock exchange).
8 Clients included Sir James Goldsmith, the Reichmann brothers’ Olympia & York and the Hanson Trust—not to mention Robert Maxwell, whose campaign to acquire an American publishing house Pirie backed, earning fees worth $17 million in the process. When Maxwell died in 1991, leaving a legacy of peculation and towering debt, it was N. M. Rothschild which was called in to investigate his books and arrange the sale of his heirs’ 54 per cent stake in Mirror Group Newspapers.
9 It had at least symbolic significance that many of the French family’s most treasured houses, including Ferrières, were disposed of in this period. The house in the rue du Monceau was destroyed; 23 avenue de Marigny was sold to the state in 1975; Ferrières was given to the Sorbonne in 1975; Sans-Souci, Gou- vieux, was sold in 1977 and is now a hotel, as is the abbaye des Vaux-de-Cernay; the château d’Armain villiers was sold in the 1980s to the King of Morocco.
10 The others are Schröders, Flemings and Lazards.