Rich in history: the Rothschilds

Nathan Rothschild, who ‘organised’ the purchase of those Suez Canal shares / texemarrs.com

Whole books have been published about this world-famous banking family. Some of the authors have indulged in hagiography, others have been perhaps unconsciously anti-Semitic. The latter view is particularly irritating, as it is the very Jewishness of the Rothschilds that makes their family history so interesting. Here, we can engage in a brief potted biography of the family. For further reading, I consider the best and most intimate biography is by Frederic Morton. It is probably out of print by now, but ransack the libraries for The Rothschilds – a family portrait.

Mayer Amschel Rothschild  (1744 – 1812) founded a small financing house in Frankfurt in the 18^th century. He had been born in the Jewish ghetto there. Soon he moved himself and his family to Manchester, a rapidly developing industrial city in the north of England, where he concentrated mainly on the export of textiles. He also did some banking, and soon was able to set up the first modern financing group.

Mayer seems to have advanced in spectacular fashion, for it was he who financed the first British initiatives against Napoleon Bonaparte. He lent money to Britain’s allies in the struggle, and in doing so set up the first international bond market. This was just the beginning.

By 1818 Mayer’s son Nathan, operating from London, was managing the whole of the Prussian state loan. Mayer’s five sons – remember sons because the male line is of paramount importance in the story of the Rothschilds) – were established in key financial centres: There was Amschel in Frankfurt, Salomon in Vienna, Nathan in London, Carl in Naples and James in Paris. The brothers formed one multi-national business, the most stable as risks could be spread over several markets. For most of the 19^th century Rothschilds were the biggest banking organisation in the world.

Time was passing rapidly and continuity was established by following Mayer’s rule that male Rothschilds could marry any woman they liked (preferably Jewish) but that neither wives or daughters could work in the family business. Female Rothschilds could equally marry their choice of man, but he could not work in the business either. Only male Rothschilds born to male Rothschilds, if you see what I mean, could toil away at the banking business (so long as it was a Rothschild banking business). This kind of thing may be hard to accept today, but in the 19th century it was considered quite normal and par for the course.

Meanwhile, the London branch stayed linked to foreign government finance and the trade in gold bullion;Pariswas more than interested in railways and heavy industries in Belgium ,France, Italy and Spain; Vienna Rothschilds took care to maintain a splendid relationship with the Habsburg Dynasty (q.v.).

Only direct male descendents were permitted by the family to obtain shares, a system of self-protection that lasted until the Sixties of the last century, when at last non-family partners were admitted.

It is hard to imagine the extent of political influence this family had, as financial advisers to nations, principally the nations where they had settled. Lionel Rothschild was the first  Jew to enter the House of Commons in London, which he did in 1858. In 1875 Benjamin Disraeli needed four million pounds (in 19^th century terms) in order to buy shares in the newly planned Suez Canal. He went straight to Lionel, who provided them instantly, at low interest. France and Britain were thus able to finance the Canal at least until Nasser and the Suez Crisis. Lionel’s son Nathan became the first  Jew to become a peer (with a barony), thus entering the British nobility.

The Rothschilds built magnificent houses in the country and the cities; some examples still stand despite two world wars and the bombing during the second. But they do not now belong to Rothschilds.

The Rothschild based in Paris stayed put in his enormous home even when the Nazis occupied the city and came to arrest him. The agents arrived, demanded entry, got it and were then faced by the Rothschild butler, who calmly told them the Baron was at dinner, and could not be disturbed until he had finished. The story goes that the German agents were ushered into the presence at the moment prescribed by the Baron, who invited them to take a glass of brandy with him while he put on his overcoat. This may be apocryphal. The Baron did not meet his end in a concentration camp . He paid the right amount to a Nazi leader, possibly Goering, and soon found himself safe in Switzerland.

When a French socialist government under François Mitterand  announced in the Seventies that it would nationalize all French banks, they sent inspectors to confiscate the Rothschild billions. They were met by an apologetic director who informed them that unfortunately the bank had no assets available to be confiscated as they had been transferred to New York. This again may be apocryphal, but it is part of Rothschild lore.

Members of the family have become famous as scientists (Miriam) and philanthropists (everywhere). Unlike so many other justly famous private banking houses (Baring, Coutts,Westminster, Hambro etc.) Rothschilds has not been swallowed by larger concerns, losing their identity.