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Reflecting on Niall Fergusson’s The House of Rothschild

Updated: Jan 9, 2022

Yes, my dear fellow, it all amounts to this: to do something you must be something. We think Dante greatwas , but he had a civilisation of centuries behind him; the House of Rothschild is rich but it has required more than one generation to attain such wealth. Such things all lie deeper than one thinks.


As early as the 1930s, an American History Association member referenced Walter Scott's Dr Dryasdust to warn that professional historians were losing contact with readers outside the university. Recently, new quantitative tools and the splintering of themes into ever-narrower specialities have reignited anxieties that narrative history – the accessible sort – is rapidly devolving into, well, history. Niall Ferguson's excellent and engrossing two-volume family saga of the Rothschilds demonstrates that academic historians can still produce compelling stories that the rest of us want to read. Despite its rigorous and technical analysis of banking, economics, and diplomacy, "The House of Rothschild: The World's Banker, 1849-1999," the second volume of Ferguson's history, has the grandeur and scope of a nineteenth-century three-decker novel.

The Rothschilds, like the fictional Buddenbrooks, Pallisers, and Forsytes, are utterly intriguing subjects. They were the world's wealthiest family and most influential bankers for nearly a century. As one contemporaneous put it, "In Europe, there is just one power, and that is Rothschild." Consider a family business that combines the financial might of Merrill Lynch, Morgan Stanley, J. P. Morgan, Goldman Sachs, and the International Monetary Fund. Whereas many other prosperous European Jews converted, the Rothschilds remained "confidently Jewish" throughout their lives.

They were "the closest thing the Jews of Europe had to a royal family," and were dubbed "Kings of the Jews" and "Jews of the Kings" by other Jews; as one Rothschild put it, "For us Jews, and particularly for us Rothschilds, it is preferable not to come into contact with other families, as it always results in unpleasantness and costs money." Their meteoric rise from Frankfurt's wretched Jewish ghetto following the French Revolution is unparalleled in the history of moneymaking. By amassing what may be the world's greatest private wealth, the Rothschilds established the world's first worldwide bnd market and the world's first fully multinational bank, with branches in London, Paris, Frankfurt, Vienna, and Naples. They acted as the "lender of last resort to the lender of last resort," rescuing the Bank of England. They served as private money managers for government chiefs such as Otto von Bismarck and lent money to the pope.

Their storey is compelling because of the astonishing parallel between the Rothschilds' nineteenth-century milieu and our own. As is the case today, international capital flows overshadowed national economies and government financial resources. Communications accelerated the pace of business, and unregulated financial markets were extremely volatile. Ferguson believes that the Rothschilds succeeded not so much by maximising profits during booms as by weathering storms that sank less wise and well-capitalized competitors. Initially despised as the epitome of New Money, the Rothschilds quickly acquired the trappings and tastes of monarchs: huge estates and gardens, Dutch masters, and entire menageries. A typical Rothschild shopping spree would include a Rubens, an Inigo Jones chimneypiece, a Reynolds, and "last but certainly not least, Mr Russell's long-promised Japanese or Chinese collection. "One of their less remarkable homes included a "private circus ring, bowling alley, ice skating rink, indoor swimming pool, and Indian pavilion," among other oddities.

They quickly ascended to the throne of the political universe. They dined with Disraeli and Gladstone, hunted with the Prince of Wales, and assisted Napoleon III in arranging his hasty marriage to adventurer Eugenie de Montijo. Simultaneously, they poured enormous work into humanitarian endeavours and leveraged their rising power to improve Jews' civil and political rights. Indeed, as Ferguson explains, "the state of Israel's origins may be traced all the way back to a letter to Lord Rothschild."

Ferguson depicts the Rothschild family at its pinnacle of power in this second edition of "The House of Rothschild" (the first volume is subtitled "Money's Prophets, 1798-1848"). However, as Thomas Mann demonstrated in his chronicle of the rise and collapse of a Hanseatic merchant family and enterprise, "decadence is visible in the third generation and deadly in the fourth." Indeed, the Rothschild myth peaked during a time when the family's money and power were at an all-time low, during the poisonous political climate of the 1920s and 1930s. The family's promotion of the gold standard in the aftermath of Black Thursday and the Creditanstalt crisis – which precipitated a massive flight of American money from Europe – contributed to the transformation of a financial crisis into the decade-long Great Depression. They had committed previous strategic gaffes before that one. According to Ferguson, the greatest failing was an incomprehensible failure to create the bank where opportunity was increasingly concentrated — in America. At one time, a foresighted Rothschild mother wrote to her son in New York: "Stay in the New World; if the worst happens and the old world falls, which God would not allow, it will become a new fatherland for us." Nonetheless, it never occurred. By the time World War I began, J. P. Morgan had already surpassed the Rothschilds as the keystone of conflict finance, and the Rockefellers took centre stage following the war.

Meanwhile, new competitors – joint-stock banks that relied on modest investor funds – were snatching the march on the Rothschilds in Europe. Additionally, they were being supplanted by modern technologies. As a Wall Street veteran may lament after-hours and Internet trading now, James Rothschild complained in 1851: "Since the telegraph became available, individuals have worked much more. Each day around 1toidnight, they dispatch a dispatch, even for insignificant transactions," profiting "before the Bourse closes for the day." Once upon a time, the Rothschilds controlled both information and money, outpacing their rivals with a network of couriers and carrier pigeons so powerful that it was relied upon by Europe's leaders of the state. James ruefully commented that with the telegraph, "anyone can obtain news."

The gradual collapse of entrepreneurial zeal and financial acumen was the primary factor in the House of Rothschild's demise. By the fourth generation, "aesthetics had supplanted asceticism." When asked if he possessed a secret to financial success, Natty Rothschild frequently said, "Yes, by selling too soon." Aesthetic distraction and risk aversion were inextricably linked. Privately, Ferguson writes, "the manners of the previous century were retained as if in aspic." "While Lionel pursued his passion for horticulture at Exbury with the assistance of up to 400 gardeners, Edouard kept his prized racehorses at Chantilly. Philippe constructed a seaside estate at Arcachon in order to entertain other men's wives." Their enthusiasm in their rural residences quickly surpassed their interest in the City House. Returning to the bank, cousins and brothers arrived around 11 a.m. and departed at 2:00 p.m. The early Rothschilds' laborious practises had devolved into the lifestyles of the wealthy and famous.

What a pleasure it is to read a book in which the author's deft use of language and amusing asides compel the reader to turn the page. However, this is not a tasting menu; rather, it is a big repast. Alan Greenspan would salivate over attractively presented statistics on bonds and financial contagion occurrences. A connoisseur of politics can appreciate Neville Chamberlain's or Winston Churchill's political manoeuvrings. Ferguson, a Stanford professor of history, has decrypted thousands of astonishingly candid letters written by family members to one another in Judendeutsch (a mix of German, Hebrew, and Yiddish) using Hebrew symbols to evade inquisitive eyes. Ferguson's mots are equal to the Rothschilds', as when they complain about being "stared at by the modern argus, the public," dismiss Queen Victoria's writing as "ten thousand times" less interesting than a newspaper, or cynically observe that a country's finances "cannot progress without liberties," but progress "even less with too many." It is precisely because of these delectable tidbits that a thousand pages of Ferguson's magnum opus two-volume history are not only educational but delightfully fascinating.

"Our Blessed Father":


A traveller arriving in eighteenth-century Frankfurt, as he passed across the main Sachsenhauser Bridge leading to the Fahrtor Gate, could hardly miss the Judensau--the Jews' Sow (see illustration 1.i ). An obscene graffito on the wall, depicted a group of Jews abasing themselves before--or rather beneath and behind--a fierce sow. While one of them suckled at her teats, another (in rabbinical garb) held up her tail for the third (also a rabbi) to drink her excrement. The "Jews' devil" watched approvingly. If the traveller looked up, he could also see a second and still more repellent image: that of a dead baby, its outstretched body punctured by countless small knife wounds and beneath it nine daggers. "On Maundy Thursday in the year 1475," read a caption, "the little child Simeon, aged 2, was killed by the Jews"--an allusion to the case of Simon of Trent, who had allegedly been a victim of "ritual murder," the fictional practice whereby Jews murdered Gentile children in order to put their blood in unleavened bread.

Such a graphic expression of anti-Jewish sentiment was by no means unique: the image of Jews worshipping a pig can be found in numerous woodcut and printed versions dating as far back as the fourteenth century, while the myth of ritual murder gained currency in Germany in the fifteenth. What made the Frankfurt pictures remarkable--at least in the eyes of the city's most celebrated son, Johann Wolfgang Goethe--was that they were "not the product of private hostility, but erected as a public monument." The Judensau and the murdered child were officially sanctioned symbols of a long-standing tradition of hostility to an enemy within the free imperial town.

The first records of a Jewish community in Frankfurt date back to the middle of the twelfth century, when it numbered between one and two hundred. Its history was one of periodic persecution by the Gentile populace. In 1241, more than three quarters of the Frankfurt Jews were massacred in the so-called "Battle of the Jews" (Judenschlacht). The community re-established itself over the subsequent decades, but just over a century later, in 1349, there was a second pogrom. In both cases, popular millenarianism played a part: in the first "battle," fears that the Jews were in league with the Mongol horde; in the second, fears instigated by members of a flagellant order that the Jews would attract the plague to the town.

There were, however, worldly reasons why both the Holy Roman Emperor--who declared the Jews "servi nostri et servi camerae nostri" in 1236--and the municipal authorities were inclined to encourage Jewish settlement. The Jews were a source of tax revenue and credit (given their exemption from the laws prohibiting usury) who could be offered "protection" and restricted privileges in return for hard cash. But protection and restriction went hand in hand. In 1458, at the order of the Emperor Frederick III, the Jews were confined to a ghetto (from the Italian borghetto or suburb): a single, narrow street on the north-eastern edge of the town at both ends of which gates were erected. To the 110 Jews living in the town, this capitivity in what became known as the Judengasse (Jews' Lane) suggested a "New Egypt." On the other hand, the persistent risk of popular violence could give the ghetto the character of a sanctuary. Allegations of ritual murder in 1504 and an attempt to declare the Jews heretics five years later provided a reminder of the vulnerability of the community's position, as did the conversion of the majority of the town's population to Lutheranism in 1537, given the avowed hostility of Luther towards the Jews. The Judengasse provided sanctuary of sorts in a perilous world; and between 1542 and 1610 its population grew from around 400 to 1,380 (an increase which was paralleled by Huguenot migration to Frankfurt from the Netherlands). The economic and social tensions which coincided with--or were caused by--these influxes culminated in yet another outbreak of popular violence against the Jewish community: the "Fettmilch riots," named after their shopkeeper leader Vincenz Fettmilch. However, wholesale looting of the Judengasse was this time not accompanied by mass murder (the Jews were expelled from the town) and, after a brief period of popular rule, imperial troops quashed the insurrection. Fettmilch and the other leaders of the revolt were hanged and the Jews marched back into the ghetto, their status as proteges of the Emperor reaffirmed.

In practice, as before, "protection" meant extraordinarily tight regulation, the details of which were set out by the Council in the Stattigkeit, a statute which was read out each year in the main synagogue. Under its terms, which remained in force until the very end of the eighteenth century, the Jewish population was restricted to just 500 families; the number of weddings was rationed to just twelve a year and the age of marriage fixed at twenty-five. No more than two Jews from outside were allowed to settle in the ghetto each year. Jews were prohibited from farming, or from dealing in weapons, spices, wine and grain. They were forbidden to live outside the Judengasse and, until 1726, were obliged to wear distinctive insignia (two concentric yellow rings for men and a striped veil for women) at all times. They were confined to the ghetto every night, on Sundays and during Christian festivals; at other times, they were forbidden to walk in the town more than two abreast. They were barred from entering parks, inns, coffee houses and the promenades around the town's picturesque walls; they were not even allowed near the town's ancient cathedral; and had to enter the town hall by a back door. They were permitted to visit the town market, but only during set hours, and were forbidden to touch vegetables and fruit there. If he appeared in court, a Jew had to swear a special oath which reminded all present of "the penalties and maledictions which God imposed on the cursed Jews." If he heard the words "Jud, mach mores!" ("Jew, do your duty!") in the street, he was obliged--even if they were uttered by a mere boy--to doff his hat and step to one side. And if he had occasion to go outside Frankfurt--for which a special pass was required--he paid double the amount of toll paid by a Gentile when entering the town. In return for this supposed "protection," every Jew also paid a poll (or "body") tax.

All this meant that the Frankfurt Jews spent most of their lives within the high walls and gates of the Judengasse. Today virtually nothing remains of this prison-cum-street. All but a couple of houses were demolished by the Frankfurt authorities in the course of the nineteenth century, and what little remained was flattened by American bombers in May 1944. However, the foundations of a part of the old street have recently been excavated, and these give at least a rough idea of the inordinately cramped conditions of life in the ghetto. Curving from the Bornheimer Gate in the north towards the Jewish cemetery in the south, it was just a quarter of a mile long and no more than twelve feet wide--in places less than ten. Having originally been designated a ghetto at a time when the Jewish population was little more than a hundred, the lane was horribly overcrowded: by 1711 there were no fewer than 3,024 people living there. Accommodating them all in such a small area required a high degree of architectural ingenuity: houses were just eight feet wide and had up to four storeys, and behind each row an additional row was constructed. Fire was an inevitable hazard--indeed, all or part of the Judengasse was destroyed by major conflagrations in 1711, 1721 and 1774. This meant that life there was both dear and cheap: dear because the demand for housing far outstripped the supply, so that a four-room house in the north of the Judengasse cost as much as Goethe's father paid for his twenty-room mansion in the Grosse Hirschgraben; cheap because lack of sanitation, light and fresh air reduced life expectancy. In the 1780s it was estimated that average mortality among Jews was 58 per cent higher than among Gentiles. A traveller in 1795 observed how "most of the people among the Frankfurt Jews, even those who are in the blooming years of their life, look like the walking dead ... Their deathly pale appearance sets them apart from all the other inhabitants in the most depressing way." Later, after the walls around it had been partly demolished, the Judengasse was to some extent romanticised by artists like Anton Burger; indeed, it became something of a Victorian tourist attraction (Charles Greville and George Eliot were among the English visitors). At the time, it struck the young Goethe as a hellish slum:

The lack of space, the dirt, the throng of people, the disagreeable accents of the voice--altogether, it made the most unpleasant impression, even upon the passer-by who merely looked through the gate. It was a long time before I dared to go in there alone, and I did not return there readily when once I had escaped from that multitide of people, all of them with something to hawk, all indefatigably buying or selling.

One who knew it more intimately was the poet Ludwig Borne, who (as Juda Low Baruch) grew up there in the 1780s and 1790s. Looking back in anger rather than nostalgia, he remembered a

long dark prison, into which the highly celebrated light of the eighteenth century has not yet been able to penetrate ... Stretching ahead of us lay an immeasurably long street, near us just enough room to reassure us that we could turn around as soon as the wish overcame us. Over us is no longer sky, which the sun needs in order to expand in his breadth; one doesn't see sky, one sees only sunlight. An evil smell rises everywhere around us, and the cloth that is supposed to shield us from infection serves also to catch the tears of compassion or to hide the smile of malice from the gaze of the watching Jews. Tramping laboriously through the filth slows our pace down enough to permit us the leisure for observation. We set our feet down skittishly and carefully so that we don't step on any children. These swim about in the gutter, creep about in the filth innumerable as vermin hatched by the sun from the dungheap. Who would not indulge these little boys in their small desires? ... If one were to consider play in childhood as the model for the reality of life, then the cradle of these children must be the grave of every encouragement, every exuberance, every friendship, every joy in life. Are you afraid that these towering houses will collapse over us? O fear nothing! They are thoroughly reinforced, the cages of clipped birds, resting on the cornerstone of eternal ill-will, well walled up by the industrious hands of greed, and mortared with the sweat of tortured slaves. Do not hesitate. They stand firm and will never fall.

As Borne commented, even at a time of supposed "enlightenment," when other German cities were relaxing the restrictions imposed on Jews, Frankfurt held out, refusing to implement the Emperor Joseph II's Edict of Toleration (1782) and confiscating copies of Ephraim Lessing's philo-Semitic play Nathan the Wise. When the Jewish community petitioned in 1769 and again in 1784 to be allowed to leave the ghetto on Sundays, the request was rejected as an attempt "to put themselves on an equal footing with the Christian residents." As in the past, this policy was to some extent forced upon the Council by the majority of the Gentile townspeople. Typically, when a Jewish mathematics teacher was granted permission to live and teach outside the ghetto in 1788, there was such a popular outcry that the licence had to be revoked; and a similar request by a Jewish doctor in 1795 was turned down flat. For much the same reason--as a letter of complaint signed by seven leading Jewish merchants makes clear--the rules governing travel outside the Judengasse on holidays and Sundays were made more rather than less restrictive in 1787, with the introduction of a complicated system of identity cards:

As a human being, every Jew has the same rights as any other and a just claim for protection by his sovereign. Unfortunately, the lower classes are still so bound to the prejudices of their fathers as to doubt that a Jew is a human being like themselves. They mistreat [the Jews] in all sorts of ways and many an old man seems pleased when his son is mistreating a Jew. Even soldiers indulge in this punishable tyranny. Would they not take [the new system] as an invitation for countless acts of harassment? They would use the smallest difference in clothing, hair, beards and the like as an excuse to perform the most stringent examinations at the town gate. The slightest deviation [would] enable them to arrest the Jew and march him off to the main guard house like a common thief.

There was more to this persistent and systematic discrimination than mere ancestral prejudice, however. An important factor was that the Gentile business community genuinely feared the economic challenge which they believed would be posed by an emancipated Jewish population. The fact that a slum like the Judengasse could produce mathematics teachers and doctors in itself tells us something important about its culture: it was not as closed as it seemed. As Goethe himself discovered, when he plucked up the courage to enter the ghetto, the Jews were "human beings after all, industrious and obliging, and one could not help but admire even the obstinacy with which they adhered to their traditional ways." Despite--perhaps partly because of--the grim conditions in which they lived, the Frankfurt Jews were anything but an underclass in cultural terms.

Of course, the culture of the Judengasse was an unfamiliar one to a Gentile like Goethe. It was an intensely religious culture, with the rhythm of life still dictated by the religious laws of the Halakha. Every morning and evening, men were summoned to worship at synagogue by the Schul-Klopper knocking on their doors with a hammer. The Sabbath was, as an English visitor recalled, "in the picturesque phrase of their prayer-book, `a bride,' and her welcome, week by week, was of a right bridal sort. White cloths were spread and lamps lit in her honour. The shabbiest dwellings put on something of a festive air." Education at the lane's three primary schools (heder) and the rabbinical college (yeshivah) was, by the standards of the time, conservative, with children learning to read the Torah, the foundation of Mosaic teaching law, then moving on to Rashi's commentaries and finally the Talmud, the compilation of rabbinical commentaries and debates on rules of observance. The community had its own fire brigade and hospitals, its own cemetery and its own voluntary associations to provide for the poor.

Yet, despite the high walls which surrounded it, and despite the relatively limited impact of the Jewish Enlightenment on the community (as compared with that of Berlin), the culture of the Judengasse was far from insular. Although Gentiles sometimes sneered at their manner of speech, Heinrich Heine later insisted that the Frankfurt Jews spoke "nothing but the proper language of Frankfurt [which is] spoken with equal excellence by the circumcised as well as by the non-circumcised population." This was a slight, though pardonable, exaggeration. Those Jews who did manage to secure for themselves a secular as well as a religious education--like the doctor mentioned above--would have spoken, read and written Hochdeutsch. The surviving letters of Mayer Amschel Rothschild, however, confirm that his was a rough and often ungrammatical German, with an admixture of Hebrew; and when he wrote to his sons he used Hebrew characters, as did they when they wrote to one another. Nevertheless, the Judendeutsch of the Judengasse was not the Yiddish of the Polish and Russian stetl; and in all probability many Gentile merchants in Frankfurt wrote ungrammatical letters too. When Frankfurt Jews left the Judengasse to do business--the avenue of activity most accessible to them--there was no insuperable language barrier between them and the Gentile merchants they encountered.

More than most German towns in the eighteenth century, Frankfurt was a businessman's town. At the junction of several major trade routes linking the towns of South Germany (Strasbourg, Ulm, Augsburg and Nuremberg) to the Hanseatic ports of the North (Hamburg, Bremen and Lubeck), and linking Germany as a whole to the economies of the Atlantic seaboard, the Baltic and the Near East, its prosperity was bound up with the two annual fairs in the autumn and the spring which had been held in the town since the Middle Ages. And because of the enormous variety of coinage circulating in Europe up until the late nineteenth century, the town's commerce necessarily went hand in hand with banking: in particular, money-changing and bill-broking (buying and selling the IOUs generated by more complex transactions). In addition--and in some ways more importantly--Frankfurt acted as a financial centre for the princes, archdukes and electors who governed the numerous petty territories of the region. The revenues from their lands and subjects (rents, taxes and so on) and the expenditures of their courts (on grand residences, gardens and entertainments) made these rulers the biggest customers of the pre-industrial German economy, even if most of them were considerably less well off than their counterparts in the English aristocracy. In particular, the fact that the majority generally spent more than they earned created lucrative if sometimes risky opportunities for German bankers.

Perhaps the most successful firm in this field prior to 1800 was that of Simon Moritz and Johann Philipp Bethmann, who imported from Amsterdam to Germany the system of "sub-bonds" (Partialobligationen) whereby a large loan could be subdivided into more manageable portions and sold on to a wide clientele of investors. A typical transaction was the Bethmann Brothers' loan to the Holy Roman Emperor of 20,000 gulden (around 2,000 [pounds sterling]) in 1778, which they sold on to investors in the form of twenty 1,000-gulden bonds, handing over the cash thus raised--minus their substantial commission--to the imperial Treasury in Vienna, and subsequently ensuring the prompt payment of interest from Vienna to the bondholders. Between 1754 and 1778 the Bethmanns floated loans totalling nearly 2 million gulden, and no fewer than fifty-four separate loans totalling nearly 30 million gulden in the following five years. Other Frankfurt bankers became involved in the same kind of business, notably Jakob Friedrich Gontard.

Neither Bethmann nor Gontard was Jewish. Yet there is no question that, by the later eighteenth century, it was Jews who had come to be seen as the most enterprising operators when it came to money-changing and all kinds of lending. After more than a century of scholarly reflection on the subject, it is still hard to say quite why this was. Any advantage Jews enjoyed over Gentile financiers can have been only an indirect result of their system of education: Mayer Amschel Rothschild once recalled that "in my youth I was ... a very active merchant, but I was disorganised, because I had been a student [of the Talmud] and learnt nothing [about business]." Probably membership of a tightly knit "outsider" group helped when it came to constructing credit networks. And perhaps there was a kind of business ethic derived from Judaism. But these points can be made with equal force about other religious minorities, as they were by Max Weber, who unconvincingly contrasted "the Protestant ethic" with the Jewish ethos of "politically and speculatively oriented ... pariah capitalism." The least unsatisfactory answer is that, at a time when most fields of economic activity were closed to them, Jews had little alternative but to concentrate on commerce and finance. At the same time, their Gentile rivals in these fields probably tended to exaggerate the extent of the "Jewish threat" to their business. The non-Jewish bankers of Frankfurt were complaining as early as 1685 that "the Jews had torn the bills trade from their hands"--a claim which led to a ban on Jews entering the stock exchange. Twelve years later the Council was trying, not for the last time, to prevent Jews from renting warehouses in the Fahrgasse, the town's main street.

Perhaps the most notorious conflict of this sort centred around the role of Joseph Stiss-Oppenheimer, who rose from being Hoffaktor (court agent) to Duke Karl Alexander of Wurttemberg to the much more political posts of privy councillor and, in 1733, envoy in Frankfurt, where his privileged position allowed him to live outside the Judengasse in the comfort of the Golden Swan Inn. Four years later Oppenheimer was executed, having been found guilty of wielding excessive political power and undermining the position of the Wurttemberg estates (Stande). Oppenheimer--the Jud Suss of later anti-Semitic legend--was only the most notorious of the Jewish court agents, however. By the mid-eighteenth century Frankfurt Jews were acting as agents for the Palatinate, the Electorate of Mainz, the Grand Duchy of Hesse-Darmstadt, the Kingdom of Prussia, the imperial court in Vienna, as well as Hesse-Kassel and Saxe-Weimar. Low Beer Isaak, for example, was court agent to the Prince of Nassau-Saarbrucken in 1755, while David Meyer Kupl challenged the dominance of the Kann family when he became imperial court agent at around the same time. Such men formed a rich and privileged elite within the Judengasse.

Mayer Amschel

It was into this partly, but not wholly, segregated world that Mayer Amschel Rothschild was born in either 1743 or 1744. About his parents, grandparents and more remote ancestors we know little. Benjamin Franklin once observed that in life only death and taxes are inevitable; they are also virtually the only things about which records survive for the earliest Rothschilds. It is worth noting at once that the family might never have been called "Rothschild"--literally "red shield"--at all. We know that Isak, son of Elchanan, built a house in the 1560s known as "zum roten Schild" ("the red shield"), presumably after some kind of shield of the sort often hung at the front of houses. It was common enough for residents of the Judengasse to become known by their addresses. However, Isak's grandson Naftali Herz (who died in 1685) left the house with the red shield and moved to another house, "zur Hinterpfann" ("the warming pan"). The Rothschilds could thus conceivably have become known as the "Hinterpfanns." As it was, although Naftali Herz's son, grandson and great-grandson continued to use the name "Rothschild," they also used the name "Bauer." It was probably only in the next generation--Mayer Amschel's--that the name Rothschild stuck firmly as a surname, though even he might possibly have changed it again when he moved to another house known as "zum grunen Schild" ("the green shield").

The most we can say about the early Rothschilds is that they were pious and relatively successful small businessmen dealing in, among other things, cloth. Five years before his death in 1585, Isak zum roten Schild had a taxable income of 2,700 gulden, and when he died he was remembered on his gravestone for his "virtue," "righteousness" and "honesty." A century later his great-grandson Kalman, a moneychanger who also dealt in wool and silk, had a taxable income more than twice as large; and it seems that his son--Mayer Amschel's grandfather Moses--successfully developed his father's business, continuing the process of steady social ascent by marrying, successively, the daughters of a tax collector and of a doctor. Unfortunately, we know next to nothing about the economic achievements of Mayer Amschel's father, Amschel Moses--though the fact that the family continued to live in the modest house at the Hinterpfann, with its ground-floor office, its first-floor kitchen and cramped bedrooms above, suggests at best consolidation, at worst stagnation. To judge by the lengthy and fulsome praise on his gravestone inscription, the family had done no more than attain solid respectability within the ghetto by the time he died.

Amschel Moses was evidently a studious man--he was, according to his gravestone, "a man who observed the prescribed time for the study of the Torah." This may possibly explain why he sent his son Mayer Amschel away to the rabbinical school at Furth when he had completed his primary education in Frankfurt. Whatever his reasons, it is not the case (as some historians have erroneously inferred) that Mayer Amschel was intended for the rabbinate; Cohen, who wrote a brief and laudatory biography shortly after Mayer Amschel's death and probably knew him, states that he only "studied his religion in order ... to be a good Jew." However, Mayer Amschel's studies at Furth were cut short by the untimely death of his parents in 1755 and 1756, victims of one of the epidemics which still periodically swept through German towns. He was just twelve years old.

At this point, he might well have returned to rejoin his elder sister, Gutelche, and two brothers, Moses and Kalman. Instead, he was sent to Hanover to learn the rudiments of business in the firm of Wolf Jakob Oppenheim (presumably a business associate of his father's). This was a formative experience, because it brought him for the first time into direct contact with the privileged world of the court agents. Of course, Mayer Amschel almost certainly knew something of this world already. Suss-Oppenheimer, after all, had been executed just six years before he was born. Moreover, we know that Suss had been involved in at least one bills transaction with Mayer Amschel's grandfather. But now the boy could see at closer quarters what it meant to be a "court Jew," since Oppenheim's grandfather Samuel had been court agent to the Austrian Emperor, and his uncle was agent to the Bishop of Cologne. It was in Hanover that Mayer Amschel began to acquire an expertise which was calculated to help him acquire the status of court agent for himself. He became a dealer in rare coins and medals, a line of business in which clients were almost invariably aristocratic collectors, and in which a knowledge of Samuel Maddai's complex system of numismatic classification was indispensable.

When he returned to Frankfurt--as he was obliged by residence laws to do when his apprenticeship ended--in around 1764, Mayer Amschel was quick to put this expertise to good use. Within a year of his return, he had succeeded in selling rare medals to a well-born client whose future importance to the Rothschilds was to be considerable. Admittedly, Mayer Amschel's first transaction with William, Hereditary Prince of Hesse-Kassel, was small beer. Assuming that he was the "Jew Meyer" referred to in Williams Privy Purse accounts for June 1765, it involved nothing more than 38 gulden and 30 kreuzers--a trifling sum, and one of many such small purchases the Prince made from various dealers in the years after 1763, as he built up his fashionable collection of medals and coins. Nevertheless, this--along with "various deliveries" of which no record survives--was enough to justify a request in 1769 that Mayer Amschel be granted the title of court agent, a request which was duly granted in September of that year. A year later he consolidated this new status. In August 1770 (at the age of twenty-six) he married Gutle, the sixteen-year-old daughter of Wolf Salomon Schnapper, court agent to the Prince of Saxe-Meiningen. In addition to the benefits of association with her father, the match brought Mayer Amschel vital new capital, in the form of a dowry of 2,400 gulden. It was to prove the first of a succession of carefully calculated Rothschild marriages, laying a foundation of prosperous kinship every bit as important as the foundation of royal patronage represented by the title of court agent.

In the years which followed, Mayer Amschel--initially in partnership with his brother Kalman, before the latter's death in 1782--successfully established himself as Frankfurt's leading dealer not only in coins and medals, but also in all kinds of antiques. We can see how he operated from the meticulous catalogues he circulated to his widening circle of aristocratic customers. By the 1780s the items listed included ancient Greek and Roman as well as German coins, and also a variety of other antiques and "curiosities" of the sort a wealthy collector might display alongside his coin collection: carved figures, precious stones and the like. The total value of the goods for sale in each catalogue varied from around 2,500 gulden to 5,000 gulden; however, if an item interested a client, Mayer Amschel would send it for inspection and then, if the customer wished to make a purchase, negotiate a selling price, often some way below the guide price in the catalogue. According to the surviving Privy Purse accounts, Prince William did not become a regular customer until 1790, after which date he made purchases almost every year. Other clients included Goethe's patron, the Duke of Weimar.

That the basis of the Rothschilds' fortune was mail-order antique sales to aristocratic numismatists may seem surprising; but there is no question that without the capital Mayer Amschel was able to accumulate by buying and selling "curiosities," he would never have had the resources to move into banking. It is not immediately obvious how successful he was as an antique dealer: his property tax assessment remained a constant 2,000 gulden between 1773 and 1794. However, the Maaserbuch or Zehentbuch in which he punctiliously recorded his charitable donations (a tenth of his annual income, according to Jewish law) suggested to his later biographer Berghoeffer that Mayer Amschel's annual income in the 1770s must have been in the region of 2,400 gulden--roughly the same as that of the Goethe family, and rather more than was earned at the time by a local official like a tax assessor ( Schultheiss). On the basis of these and other available figures, Berghoeffer estimated Mayer Amschel's total wealth in the mid-1780s at around 150,000 gulden (around 15,000 [pounds sterling]).

We also know that Mayer Amschel was rich enough to move house in 1787. Shortly after returning to Frankfurt, he and and his two brothers had acquired complete ownership of the Hinterpfann house, buying out the distant relations with whom their parents had shared it. Now, some twenty years later, Mayer Amschel sold his three-eighths share of the Hinterpfann to his brother Moses (for 3,300 gulden) and, beginning in 1783, bought a substantially larger house, "zum grunen Schild" ("the green shield"), for more than 11,000 gulden. By the standards of a Gentile family like the Goethes, this was still a wretchedly cramped place to live: just fourteen feet wide, with rooms so narrow that beds could be placed only along the side-walls at right angles to the street. It was wretched by the standards of the next generation of Rothschilds too: Mayer Amschel's sons would look back without nostalgia on the days "when we all slept in one little attic room." But by the standards of the Judengasse it was a desirable residence. Located in the middle of the street--roughly opposite the middle, western gate--it had been rebuilt after the 1711 fire and, unusually, had its own waterpump. On each of the three upper storeys of the main building there was a narrow room looking over the street--each with three small windows, a stove and wall cupboard--and a similar room looking inwards over the yard. Through the back door, there was a little courtyard with a small two-storey building, part of which housed the single lavatory. Unusually (and usefully) the house had two cellars, one of which was reached through an obvious enough trapdoor in the entrance hall, and the other--a larger cellar which the house shared with its next-door neighbour which was accessible only through a concealed opening underneath the stairs, and was unconnected to the other cellar. The new space above the ground, limited though it may have been, was needed; for Mayer Amschel and his wife were proving to be a remarkably procreative couple, even by late-eighteenth-century standards. It appears that Gutle Rothschild gave birth virtually every year between 1771, the year after her marriage, and 1792. Of these nineteen or so children, ten lived: Schonche (1771), Amschel Mayer (1773), Salomon Mayer (1774), Nathan Mayer (1777), Isabella or Betty (1781), Breunle or Babette (1784), Kalman or Carl (1788), Gotton or Julie (1790), Jettchen or Henrietta (1791) and Jakob or James (1792).

It was only after the birth of his youngest child that Mayer Amschel began to engage in business which can properly be called banking. In some ways, the transition was a natural one. An antique-dealer with a growing circle of suppliers and customers naturally would extend credit to some of these from time to time. As early as 1790 we find Mayer Amschel listed as one of the creditors of Joseph Cassel in the nearby town of Deutz, albeit for a mere 365 gulden. In a similar way, the coin and medal business inevitably brought him into contact with the Hessian mint, especially as his most coveted client, Prince William, often commissioned new medals to be struck. In 1794, for example, Rothschild offered to sell a quantity of silver to the Hessian war treasury "at the best possible price."

However, the speed with which Mayer Amschel's wealth grew in the 1790s marked a real break with his earlier business activity. At the beginning of the 1790s Mayer Amschel Rothschild was no more than a prosperous antique-dealer. By 1797 he was one of the richest Jews in Frankfurt, and a central part of his business was unmistakably banking. The evidence for this breakthrough is unequivocal. In 1795 the official figure for Mayer Amschel's taxable wealth was doubled to 4,000 gulden; a year later he was moved into the top tax bracket, with property worth more than 15,000 gulden; and in the same year he was listed as the tenth richest man in the Judengasse with taxable wealth of over 60,000 gulden. Thanks largely to Mayer Amschel, the Rothschilds had become one of the eleven richest families in the Judengasse by 1800. It was at around the same time that he began to rent a large four-roomed warehouse outside the Judengasse. He also took on a talented and multilingual accountant from Bingen named Seligmann Geisenheimer. Further evidence of increased wealth can be found in the generous dowries Mayer Amschel was able to give his children as they began to marry. When his eldest daughter married Benedikt Moses Worms in 1795, she received a dowry of 5,000 gulden and was promised a legacy of 10,000 after her parents' deaths. When his eldest son married Eva Hanau the following year, he was given a share of the business worth 30,000 gulden.

Just what such a share meant can be seen from one of the most important documents to have been found in the recently opened Moscow "trophy" archive: the first known balance sheet of Mayer Amschel Rothschild's firm, dating back over 200 years to the summer of 1797. The total assets of the firm at this stage were given as 471,221 Reichsthaler or 843,485 gulden, the total liabilities as 734,981 gulden, leaving 108,504 gulden (around 10,000 [pounds sterling]) as--in Mayer Amschel's own words--"the balance of my capital, praise God" ("Saldo meines Vermogens, Gott lob"). This remarkable document repays close scrutiny, for it reveals that Mayer Amschel was already far more of an international merchant banker than has previously been realised. The "assets" side of the balance-sheet evidently excluded Mayer Amschel's personal property, in that the family house does not appear there: by "my capital" he already meant his firm's capital. Most of the assets listed were either state bonds of various sorts, or personal loans and credits to a widely dispersed range of other firms. On the other side, the liabilities consisted of sums owed by Mayer Amschel to an equally broad spectrum of institutions and individuals.

The geographical range of Mayer Amschel's business credit network at this early stage was wide. The balance sheet shows that he was doing business with firms located not only in the immediate vicinity of Frankfurt (for example, in Kassel and Hanau) but also in more remote parts of Germany, ranging from Hamburg and Bremen to Regensburg, Augsburg, Leipzig, Berlin and Vienna, as well as in Amsterdam, Paris and London. Moreover, in addition to the names which might have been expected to feature in such a list of creditors and debtors (such as Mayer Amschel's son-in-law Worms and his future son-in-law Sichel), there appear the names of a number of eminent Gentile firms, including the Bethmanns, de Neufvilles and Brentanos (whom he owed a good deal of money). The celebrated art-collector Johann Friedrich Stadel also had deposits with Rothschild totalling 17,600 gulden. Finally, the balance sheet provides evidence of a new kind of relationship with the government of Hesse-Kassel, which he owed some 24,093 gulden. It is not without significance that the names of two Hessian officials--Louis Harnier and Karl Buderus--appear in their own right as creditors.

This was a rapid economic ascent by any standards. Indeed, Mayer Amschel's success had been so swift and so great that it had to some extent outstripped his own capacities. In 1797 he was appalled to discover that one of his most junior employees--a youth named Hirsch Liebmann--had been able to embezzle a substantial sum virtually from under his nose. The proceedings of the subsequent criminal case have partially survived and give a good insight into the chaotic state of his rapidly expanding business at this period. According to Mayer Amschel, Liebmann, who had been with the firm some three years, had stolen between 1,500 and 2,000 gold carolins (as much as 30,000 gulden) from his office. The theft had been possible for three reasons. Firstly, Mayer Amschel allowed Liebmann to buy and sell goods on his own account to supplement his meagre wages--one and a half gulden a month after the rent of a shared room. Indeed, Rothschild even lent him a small sum on one occasion to help finance this. No one was therefore surprised when Liebmann appeared to be supplementing his wages, even if he was doing so with singular success. Secondly, the firm had no safe for valuables and scarcely any office security: the cupboard in the main office was frequently left open during business hours and employees and clients seem to have come and gone as they pleased. No one therefore noticed when coins, notes and other valuables began to disappear. And thirdly, Mayer Amschel's system of book-keeping was woefully primitive: when he came to lay charges against Liebmann, he had virtually no documents to prove how much had been stolen. No one therefore realised that money was missing until some time after Liebmann had begun stealing. It was only when a local broker appeared in the office, claiming that Liebmann wished to buy seed from him, that Mayer Amschel's suspicions were aroused. When pressed, the man admitted that this was a cover story suggested by Liebmann; in fact, he was there to buy an Austrian bill worth around 1,220 gulden which Liebmann had offered to sell him. Mayer Amschel belatedly grasped where his employee had been getting the money for his gold watches and handmade shirts. Further enquiries confirmed his suspicions: Liebmann had not only been spending money on himself, but also sending it to his parents in Bockenheim, who were notoriously "as poor as could be" but who suddenly seemed able to afford a 500 gulden dowry for Liebmann's sister. When the thief was arrested, eight thaler coins and an imperial treasury note were found among his possessions, as well as some silver spoons, a gold salt pot, a gold mug and seven medals, belying his protestations of innocence. Further proof of guilt was unwittingly provided by Liebmann's own father, who offered to return 1,000 gulden which his son had given him plus an additional 500 if Rothschild would drop his charges. Eventually, though only after prolonged interrogation, Liebmann confessed.

Liebmann gave conflicting accounts of the theft, at one point saying that he took the money in small amounts over a prolonged period, later claiming that he had simply snatched two sacks of coins from the office cupboard while Mayer Amschel's second son, Salomon, was talking with some clients. Either way, the case illustrates that by 1797 at the latest the business was turning over so much cash that Rothschild himself could not keep track of it: bags of money were lying around the office, as he himself told the court, some in the cupboard, some on the floor. He always had a lot of money in his house, he said, because of his "extensive business dealings." The subsequent decade would see those dealings become more extensive still.

The Dual Revolution

In his Biographical Notes on the House of Rothschild, written long after Mayer Amschel's death, Friedrich yon Gentz fulsomely praised his business acumen. "Nevertheless," he added wisely, "the most outstanding personal qualities may sometimes require exceptional circumstances and world-shattering events to come to fruition." This was doubly true.

The epoch-making events which followed the summoning of the French Estates General by Louis XVI in 1789 took time to affect the lives of German Jews like Mayer Amschel Rothschild and his family. But when finally the Revolution reached Frankfurt, its effects were profound--indeed, literally explosive. The advance guard came as early as October 1792, when French troops temporarily occupied Frankfurt, just ten weeks after the coronation of the last Holy Roman Emperor, Francis II. We should not, of course, exaggerate the significance of this superficially symbolic change of regime. Frankfurt had been occupied by French troops before (during the Seven Years' War) and it seems that the Jewish community was no more pleased than the rest of the town's population at this renewed foreign incursion. Indeed, for all the potential benefits of French influence which could be inferred from the National Assembly's emancipation of French Jewry in 1791, the immediate, tangible effects of the French presence were distinctly negative. In June 1796, following the defeat of the Austrian army at Lodi, Frankfurt was bombarded by the victorious French forces so heavily that nearly half the houses in the Judengasse were destroyed by fire.

On the other hand, the upheaval of war had its advantages. The destruction of the Judengasse obliged the Frankfurt Senate to relax its residence restrictions, granting permits (albeit for only six months) to the 2,000 or so people left homeless by the fire to live outside the Judengasse. It was presumably in the wake of this relaxation that Mayer Amschel was able to begin renting the warehouse in the Schnurgasse. Later French incursions led to a real, if temporary, improvement in the legal status of the Frankfurt Jews, an improvement foreshadowed by the emancipation of the Jews in those parts of the Rhineland which the French now annexed. (One beneficiary of this was Geisenheimer, the man Mayer Amschel hired as his bookkeeper.) Of more immediate importance, the war presented Mayer Amschel with a new and lucrative business opportunity. He and two other partners, Wolf Loeb Schott and Beer Nehm Rindskopf, were able to secure a contract to provide the Austrian army with grain and cash during their operations in the Rhine-Main region.

The French Revolution was not the only revolution to transform Mayer Amschers life and business. The British Industrial Revolution, in its first phase by the 1780s if not before, exerted an equally important influence. For although Mayer Amschel had already begun building up his banking business by the late 1790s, this did not imply a winding up of his previous coin-dealing business, which continued in a small way even after his death; and nor did it preclude expansion into other potentially profitable fields of business activity. Of these, none was more profitable in the late eighteenth century than that generated by the English revolution in textile manufacturing. In particular, the dramatic growth of (partly) mechanised cotton spinning, weaving and dyeing in Lancashire signalled an unprecedented and genuinely revolutionary change in the pace of economic life. Although this industrialisation was regionally as well as sectorally concentrated--so much so that it barely registers in the aggregate national income figures extrapolated by modern economic historians--its ramifications were felt as far as Africa, whence the slave labour of the cotton plantations came, America, where the cotton itself was grown, and India, where an established native textile industry was soon to face lethal competition from the cottages and mills of Lancashire and Lanarkshire. Those mills exerted a powerful pull in Germany too, where demand for the cheaper yet better British cloths--shawls, handkerchiefs, checks, gauzes, muslins, muslinettes, quiltings, dimities, velveteens, sallampores and jaconets--grew rapidly in the 1790s. Mayer Amschel was only one of many German businessmen to scent a unique and highly profitable opportunity. Around fifteen Jewish firms in Frankfurt alone were importing English textiles by the turn of the century, and a number of these established permanent agents in Britain at around this time. Between 1799 and 1803 no fewer than eight German merchants settled in Manchester for this purpose.

It is against this background that we must see the decision to send Nathan, the third of the Rothschild brothers, to England at some point on the eve of the new century. The date of his departure from Frankfurt and the reasons for his going have long been a source of confusion to historians. Although some have Nathan arriving in England in 1797, 1799 or 1800, the majority opt for 1798. There is little evidence to support this last date. We know from the balance sheet discussed above that Mayer Amschel had begun to have dealings with firms in London from at least as early as 1797, but on a fairly limited scale. It was only February 1800--the date of his first letter to the London bankers Harman & Co., requesting that he be permitted to draw on them--that he began to expand his English business. The first documentary evidence of Nathan's presence in England comes from 1800 too. Wolf cites a letter from Nathan dated May 29 in which he requests an acquaintance to reserve "a room with two beds in it, in some respectable lodging house" for himself and his "business manager." We also have a letter from Mayer Amschel to Harman, dated June 15, which mentions that Nathan would "soon be at your place," and a letter from Nathan dated August 15 from a London address (37 Cornhill). From this Williams concluded that Nathan had actually arrived in England in 1800, spent the summer in London, then proceeded to Manchester. But this cannot be right. Not only was Nathan's first letter to Harman addressed from Manchester; we also have several later letters in which Nathan explicitly states that he had first come to Manchester the year before, 1799. It therefore seems reasonable to conclude that Nathan did not arrive in Manchester before 1799, though he and his father were not doing English business on a large scale until the following year. This leaves the possibility--though it is nothing more--that Nathan first crossed the Channel in 1798, staying in London for some months before proceeding northwards.

Why did Nathan go to England? In the absence of hard evidence, most historians have followed Nathan's own account of his emigration--which he related to the MP Thomas Fowell Buxton in 1834--in which he portrayed the decision to leave as his own:

"There was not," he said, "room enough for all of us in that city. I dealt in English goods. One great trader came there who had the market to himself: he was quite the great man, and did us a favour if he sold us goods. Somehow I offended him, and he refused to show me his patterns. This was on a Tuesday; I said to my father, "I will go to England." I could speak nothing but German. On the Thursday I started ..."

There is no reason to think that this version of events was wholly fictitious. Nathan was a fiercely ambitious and competitive man, as quick to take offence as to give it in his business dealings, and it is not difficult to imagine him responding impetuously to such a contretemps. However, in a number of respects his retrospective account was misleading. Perhaps he could not resist romanticising his own rags-to-riches story; perhaps he was indulging in irony for the benefit of his after-dinner audience (the latter would have been more in character). In any event, it seems highly unlikely that his father would, or indeed could, have entrusted him with as large a sum of money as he suggested to Buxton--20,000 [pounds sterling], or roughly double the net assets shown in the 1797 balance sheet--on the strength of a youthful impulse. However much "start-up" capital Nathan took with him, the idea that he was doing much more than following his father's orders seems unlikely.

For political reasons, it soon became imperative to conceal the fact that Nathan was acting as the agent of a Frankfurt firm, and this has led some historians to assert that, once he arrived in England, he effectively operated independently from his father and brothers. But the evidence in the firm's archives for this period is unequivocal: initially, Nathan took his orders from Frankfurt--indeed, his elder brother Salomon was sent over to assist him in 1801--and it was only gradually that he began to trade on his own account. A number of Nathan's earliest letters from London and Manchester are signed "pp. Meyer Amschel Rothschild." Correspondence between father and son was evidently regular (though very little of it has survived), and Nathan wrote frequently on his father's behalf to the London firms of Salomon Salomons and Harman & Co., which handled the firm's insurance and banking business in London. It was not untypical for letters of this early period to begin with phrases like "My father wishes me to write to you" or "Agreeable to the direction I have just received from my father." On one occasion when a firm let him down, Nathan warned them that if there were more "complaints of this nature ... [I] am certain my father will order me to turn myself to somebody that will attend more punctually." On another, he informed Salomons: "I received letters from home this morn[in]g advis[in]g me of my father being very discontented w[ith] your packing, writing that I must not send any more goods to London as you have neglected the shipping." And for most of this period the chests of cloth which Nathan was sending to the continent in increasing quantities all bore the insignia "MAR" for Mayer Amschel Rothschild. Nathan was not sparing his father anxiety when he concealed a brief illness from him in the summer of 1802. Rather, he did not want his father to think he had been unable--for whatever reason--to attend to business. In a letter to a recalcitrant French customer not long after this illness, Nathan left for posterity a revealing insight into his father's character, and his own view of it: "Do you think that my Father will sell ... Goods upon his own bills ... without Profit? You are quite mistaken, my father's Chimney will not smoke without profit." Just ten days later he received a stern letter from his father accusing him of not keeping "regular" accounts.

Nathan's slapdash approach to paperwork was evidently a recurrent source of friction. Three years after this first admonition on the subject, Mayer Amschel was still harping on the same theme, in a way which makes it abundantly obvious where power lay in their relationship. This rare letter--one of the few of Mayer Amschel's private letters which survive--is worth quoting at some length to give a flavour of the early Rothschild correspondence:

[T]o begin with, all our correspondents complain about you, dear Nathan, and say that you are so disorganised when sending consignments. Sometimes you write that you have sent, for example, the chest with this number, then later [it arrives with] another number. If you send a chest today, you only let Esriel Reiss know six months after. One of his clerks said to me that you are very disorganised. My dear friend, if you don't write down all the numbers of the chests when you send them off, if you don't write them down until you receive acknowledgement that they have arrived, if you don't pay attention, if you [don't] ask where the chest has gone when you don't receive an answer from your correspondent, if you are so disorganised and don't have someone or a friend with you, then you will be swindled. What is the good of that[?] Everyone can be a millionaire if they get the [right] opportunity. I already complained in Frankfurt about your extraordinary expenditures and disorganisation, dear Nathan; I don't like it.

This repetitive, haranguing style--which was inherited by Mayer Amschel's elder sons Amschel and Salomon--does not make for easy reading today; it cannot have given Nathan much pleasure either. However, the father's determination to bludgeon his son into mending his ways provides a fascinating insight into the business methods of the day:

I have seen the orderly way in which Heckscher and the merchant Baresch despatch and return consignments. They have special clerks in order to keep an eye on everything. They say that without good order a millionaire can go broke the more business he does, because the whole world is not, or not very, honest. When people see that you are not orderly in your despatching, they will do business with you only in order to cheat you ... Mostly they will pick quarrels with you in order to cheat you, the more so when they see how disorganised you are with your consignments. In sum, they will do business with you to exploit your disorganisation. There was a man in Frankfurt called Eluzer Elfelt who made a great deal of money, but the whole world made money from him because he was so disorganised and it went as badly for him in the end as he himself had been badly organised. Dear Nathan, don't be angry with your father. When it comes to penmanship you are not much good. Take on a clerk to manage the despatching of consignments and take my advice, be more organised with your despatching, otherwise I don't give your business much chance. The more you sell the worse it will get if you aren't organised. My dear son, don't be cross that I write like this ... You have to be careful, and Amschel says that you don't keep a proper record when he sends you remittances. That is wrong ... It really is necessary that you keep a precise record of everything that you send us and all that we send you, you really must keep your books properly. If you can't manage to keep all our accounts in good order because of your book-keeper, write home and maybe we can suggest a plan ... If you are organised, organised in your writing and careful in the way you give credit, I don't doubt that you will do well.

Nor did this paternal lecture end there. Mayer Amschel went on to berate Nathan for failing to calculate his profits net (as opposed to gross); for doing business with Rindskopf in precious stones ("But you are no jeweller") and for failing to discount bad debts:

My dear son, you must not be angry when a father, who has the happiness of all his children at heart, asks to know the real state of your finances, because if you have many bad debts, which God forbid, and enter them as if they are good, that is simply to pretend that you are rich ... My dear son, you are hard-working. Do your bit like a good boy. You can't do more. I just want to encourage you to be more organised ... You really have a good brain but you haven't learnt [the importance of] order, and here I see that all the merchants who are well organised are the ones who get very rich, and the ones who are disorganised are the ones who go broke. So dear son don't take it badly when I write you my opinion.

What is unmistakably apparent from this letter is that, in Mayer Amschel's eyes, Nathan was still just one of five subordinates within an essentially patriarchal family firm. Provided Nathan improved his business methods, he could look forward to having "as good a share in my business as your brothers" once their sisters had been married off. But until then, Mayer Amschel would give the orders.


"Despite his youth, James [Rothschild] remained firmly ingrained in the familial ethos of his father's day. He had been concerned about signals of conflict between the five houses well before 1848. Disagreements over the accounts, he cautioned Lionel in April 1847, were developing to a situation in which 'everyone trades for himself, which results in a great deal of unhappiness.' 'It is only the reputation, happiness, and unity of the family that are dear to me,' he wrote, echoing Mayer Amschel's usual admonitions, 'and it is only through our business activities that we remain united. If everyone shares and receives the accounts on a daily basis, God willing, everything will remain united.'"

— from 'The House of Rothschild’s first chapter

Related Links

Niall Ferguson in an interview about 'The Pity of War,' April 20, 1999


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