Table of Contents
PENGUIN BOOKS
Title Page
Copyright Page
Dedication
Acknowledgements
Introduction
I - Father and Sons
ONE - “Our Blessed Father”: Origins
TWO - The Elector’s Treasure
II - Brothers
THREE - “The Commanding General” (1813-1815)
FOUR - A“ Court Always Leads to Something” (1816-1825)
FIVE - “Hue and Cry” (1826-1829)
SIX - Amschel’s Garden
SEVEN - Barons
EIGHT - Sudden Revolutions (1830-1833)
NINE - The Chains of Peace (1830-1833)
TEN - The World’s Bankers
ELEVEN - “Il est mort” (1836)
III - Uncles and Nephews
TWELVE - Love and Debt
THIRTEEN - Quicksilver and Hickory (1834-1839)
FOURTEEN - Between Retrenchment and Rearmament (1840)
FIFTEEN - “Satan Harnessed”: Playing at Railways (1830-1846)
SIXTEEN - 1848
APPENDIX 1 - Prices and Purchasing Power
APPENDIX 2 - Exchange Rates and Selected Financial Statistics
NOTES
INDEX
Praise for The House of Rothschild: Money’s Prophets, 1798-1848
“This is a major achievement of historical scholarship and historical imagination. Ferguson’s work reaffirms one’s faith in the possibility of great historical writing.”—Fritz Stern
“Ferguson’s first volume on the Rothschilds is a tour de force by a brilliant and industrious young scholar.”
—Los Angeles Times Book Review
“A great biography.”—Time magazine
“Absorbing . . . Their enthralling story has been told before, but never in such authoritative detail.”
—The New York Times Book Review
“ Well written, superbly illustrated . . . account of the Rothschilds’ phenomenal success.” —The Boston Globe Book Review
“ Niall Ferguson’s rich and compelling new book . . . is a feast.”
—The Wall Street Journal
“Spellbinding, [Ferguson] has done a brilliant job of depicting this far-flung family and also offers an amazing insider’s look. His exhaustive study surpasses anything about the Rothschilds to date.”
—Publishers Weekly (starred review)
“Ferguson’s fluid, masterful synthesis of a vast amount of material . . . brings vitality to a series of compelling issues.”
—Business Week
“[Ferguson] skillfully weaves together the financial and family themes of the book. Any reader fascinated by modern financing and banking will be well satisfied. But [The House of Rothschild ] . . . will give even more pleasure to those captivated by a unique dynasty . . . that flourished beyond all dreams.”
—The American Statesman
PENGUIN BOOKS
THE HOUSE OF ROTHSCHILD
Born in Glasgow in 1964, Niall Ferguson is Fellow and Tutor of Modern History at Jesus College, Oxford, as well as a political commentator and author. His previous publications include Paper and Iron: Hamburg Business and German Politics in the Era of Inflation 1897-1927, the bestselling book, Virtual History: Alternatives and Counterfactuals, and The Pity of War.
PENGUIN BOOKS
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First published in the United States of America by Viking Penguin,
a member of Penguin Putnam Inc. 1998
Published in Penguin Books 1999
Copyright © Niall Ferguson, 1998
All rights reserved
This is the first of two volumes of The House of Rothschild.
In Great Britain The House of Rothschild was published as one volume
by Weidenfeld & Nicolson under the title The World’s Banker.
CIP data available.
eISBN : 978-1-101-15730-5
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For Susan, Felix and Freya
ACKNOWLEDGEMENTS
Documents from the Royal Archives at Windsor Castle are quoted with the gracious permission of Her Majesty the Queen. It was Sir Evelyn de Rothschild, chairman of N. M. Rothschild & Sons, who originally suggested that the writing of a history of the firm would be a good way to mark the bicentenary of his great-great-grandfather Nathan Mayer Rothschild’s arrival in England; I owe a special debt to him for opening the Rothschild Archive to me. Amschel Rothschild also took a keen interest in the project before his tragic death in 1996. Lord Rothschild, Edmund de Rothschild, Leopold de Rothschild and Baron David de Rothschild were all kind enough to agree to be interviewed. They and others also took the trouble to read and comment on substantial parts of the text. I am grateful to Miriam Rothschild for her corrections to an early version of the epilogue, and to Baron Guy de Rothschild for his looking over those passages relating to the recent history of the French bank and family. Emma Rothschild read and commented on the first draft in its entirety, a considerable distraction from her own research and writing for which I thank her. Lionel de Rothschild saved me from innumerable slips by reading and meticulously annotating the first draft, a labour for which this acknowledgement seems a very meagre wage. I should also like to thank the Earl and Countess of Rosebery for giving me access to the private papers of the 5th Earl, and for their kind hospitality at Dalmeny.
A number of directors and employees at N. M. Rothschild & Sons have also assisted me. In particular, I should like to thank Tony Chapman, Russell Edey, Grant Manheim, Bernard Myers and David Sullivan, as well as Lorna Lindsay, Hazel Matthews and Oleg Sheiko.
A project such as this depends heavily on the expertise and toil of archivists and librarians. I owe a special debt of gratitude to those at the Rothschild Archive: Victor Gray and Melanie Aspey, and their assistants Tamsin Black and Mandy Bell, who have uncomplainingly put up with my erratic work methods and unpredictable demands. I should also like to thank their predecessors, Simone Mace and Ann Andlaw. Sheila de Bellaigue, Registrar of the Royal Archives at Windsor Castle, was a model of efficiency; as were Henry Gillett and Sarah Millard at the Bank of England and Robin Harcourt-Williams at Hatfield House. I should like to record my gratitude to Dr M. M. Muchamedjanov and his assistants at the Centre for the Preservation of Historical Documentary Collections in Moscow. In addition, I and my research assistants have received invaluable help from the archivists and librarians at the Anglo-Jewish Archives, University of Southampton; the Archives Nationales, Paris; the Bayerisches Hauptstaatsarchiv, Munich; the Birmingham University Library; the Bodleian Library; the British Library; the Cambridge University Library; the Geheime Staatsarchiv Preussischer Kulturbesitz, Berlin-Dahlem; the Hessische Staatsarchiv, Marburg; the House of Lords Record Office; the Institut für Stadtgeschichte, Frankfurt; the Jewish Museum, Frankfurt; the Leo Baeck Institute, New York; the National Library of Scotland; Rhodes House, Oxford; The Times Archive; and the Thüringische Hauptstaatsarchiv, Weimar.
See “Note: On Being an ‘Authorised’ Author” at the end of the acknowledgements.
/> Lord Weidenfeld was the match-maker who suggested that I might like to write this book and for that (and many other kindnesses) I shall always be in his debt. I am indebted too to Anthony Cheetham at Orion for investing in me and offering only encouragement as deadlines passed and the manuscript overshot the agreed length. Ion Trewin has been and is a superb editor; the same goes for Peter James, my copy-editor. I should also like to thank Rachel Leyshon, Francis Gotto and Carl Stott for their contributions.
My agents, successively Gill Coleridge and Georgina Capel, provided all the shrewd advice and tenacious negotiation an author could wish for.
This book could not have been written in five years—indeed, it could not have been written—without a great deal of research assistance. I must make special mention of Mordechai Zucker, whose unique ability to decipher the archaic Hebrew script used by the first and second generations of Rothschilds was a sine qua non. Thanks to the translations which he had been working on for years before I came on the scene, and through his tape-recorded readings of the original Judendeutsch, Mordechai has been the eyes through which I have been able to read the most important of all the documents on which this book is based. Nor would I have got far with the correspondence of the French Rothschilds without the invaluable Abi gail Green, who also hunted down long-lost literary allusions to the Rothschilds. Edward Lipman did great things on financial questions; while Rainer Liedtke provided vital expertise on Jewish history. Harry Seekings and Glen O’Hara slaved over nineteenth-century financial statistics. Andrew Vereker chased Natty Rothschild’s dispersed political correspondence. I should also like to thank Katherine Astill, Elizabeth Emerson, Bernhard Fulda, Tobias Jones and Suzanne Nicholas.
The finished text owes much to the critical comments of other historians on earlier drafts. David Landes acted on the family’s behalf as a kind of editor-cum-Dok torvater. It has been a rare privilege to be so attentively read by one of the acknowledged masters of modern economic history. I must also thank another master in the field, Barry Supple, for finding the time to read the first draft; as well as my old friend Jonathan Steinberg, who generously read the early chapters at a very difficult time. Fritz Backhaus and Helga Krohn of the Jewish Museum in Frankfurt gave me invaluable material which they had gathered for their outstanding exhibition; I warmly thank them and their assistant Rainer Schlott. Others who have read and commented on individual chapters include Robert Evans, Gerry Feldman, John Grigg, Lord Jenkins of Hillhead, Rainer Liedtke, Reinhard Liehr, Wolfgang Mommsen, Susannah Morris, Aubrey Newman, Sir John Plumb, Hartmut Pogge von Strandmann and Andrew Roberts. I am grateful to them all for these good works, as well as to all those who have commented on conference and seminar papers I have given on aspects of Rothschild history. I would also like to thank Amos Elon for scholarly comradeship in Moscow.
The Principal and Fellows of Jesus College, Oxford, have tolerated my absence or absent-mindedness throughout the five years this book has taken to write, as have the other members of the Oxford Modern History Faculty. I am especially grateful to my colleague Felicity Heal, who has often had to shoulder burdens we are supposed to share, as well as to Dafna Clifford, Don Fowler and Patrick McGuinness. I have also been indirectly helped by the college’s staff; others will, I hope, forgive me if I single out Vivien Bowyer and Robert Haynes, who have regularly acted beyond the call of duty. I should also like to thank Doris Clifton of the Modern Languages Faculty. Nor could I omit the indispensable Amanda Hall.
Finally, I thank Susan, Felix and Freya, for whom this book was written, and to whom it is dedicated.
Note: On Being an “Authorised” Author
It may be as well to state explicitly that those members of the Rothschild family who read parts of the early manuscript were not acting as censors. From the outset, it was formally agreed that I would be entitled to quote freely from any material in the Rothschild Archive in London predating March 1915 (the date of the 1st Lord Rothschild’s death); and, of course, from any other archives and private collections of papers as far as their curators gave me permission to do so. It was also agreed that N. M. Rothschild & Sons would have the right to comment on the manuscript. This arrangement has worked far better in practice than I could ever have hoped. For the avoidance of doubt: I have been able throughout to abide by the Rankean principle of trying to write history as far as possible “as it actually was,” and the comments I have received from members of the family have only helped me in this attempt. Their commitment to historical accuracy has deeply impressed me. If the end-product falls short of Ranke’s ideal, I hope it is only because relevant documents have not been read for lack of time, have not survived or never existed. Errors are, of course, my fault alone.
Niall Ferguson
Pickup from old film
INTRODUCTION
Reality and Myth
I
Banking,” the 3rd Lord Rothschild once remarked, “consists essentially of facilitating the movement of money from Point A, where it is, to Point B, where it is needed.” There is a certain elementary truth in this aperçu, even if it did reflect Victor Rothschild’s personal lack of enthusiasm for finance. But if the history of the firm founded by his great-great-grandfather two centuries ago consisted of nothing more than getting money from A to B, it would make dull reading. It should not.
All banks have histories, though not all have their histories researched and written; only the Rothschilds, however, have a mythology. Ever since the second decade of the nineteenth century, there has been speculation about the origins and extent of the family’s wealth; about the social implications of their meteoric upward mobility; about their political influence, not only in the five countries where there were Rothschild houses but throughout the world; about their Judaism. The resulting mythology has proved almost as long-lived as the firm of N. M. Rothschild & Sons itself. The name “Rothschild” (which translates from the original German as “Redshield”) may be less well known today than it was a hundred years ago, when, as Chekhov remarked, a moribund Russian coffin-maker could use it ironically as a nickname for a poor Jewish musician.1 But most readers will recognise it, if only from its still fairly regular appearances in the press. The bank may not be the financial giant it was in the century after 1815 and the family may be a great deal more dispersed and diffuse, but the name continues to attract attention—some of it prurient. Even those who know nothing about finance and care less are likely to have come across it at least once in their lives. Thanks to an apparently hereditary aptitude for zoology and horticulture, there are no fewer than 153 species or sub-species of insect which bear the name “Rothschild,” as well as fifty-eight birds, eighteen mammals (including the Baringo Giraffe, Giraffa camelopardalis rothschildi) and fourteen plants (including a rare slipper orchid, Paphiopedilum rothschildianum and a flame lily, Gloriosa rothschildiana)—to say nothing of three fish, three spiders and two reptiles. The family’s almost equally recurrent enthusiasm for the pleasures of the table has also bestowed the name on a soufflé (made with glacé fruit, brandy and vanilla) and a savoury (prawns, cognac and Gruyère on toast). There are towns and numerous streets named after members of the family in Israel, Rothschild-owned vineyards at Mouton and Lafite whose wines are drunk the world over, numerous Rothschild-built houses from the Vale of Aylesbury to the Riviera—and there is even a Rothschild Island in the Antarctic. Pieces of music have been dedicated to Rothschilds by Chopin and Rossini, as have books by Balzac and Heine. The family is as famous in the art world for its many collections (some of which can be seen in public galleries) as it is in horse-racing circles for its past Derby winners. In the course of writing this book, I have met few people who had not heard at least one Rothschild anecdote—most commonly the myth of the immense profits Nathan Mayer Rothschild made by speculating on the outcome of the battle of Waterloo; almost as often the story of the purchase of the Suez Canal shares which Disraeli did his best to make famous. And, for those who know no history, books of Jewish humour still
contain Rothschild jokes. There have even been two Rothschild films, a play2 and a bizarre, though moderately successful, Broadway musical.
It should be said right away that this book has very little to say about giraffes, orchids, soufflés, vintage wines or islands in the Antarctic. It is primarily a book about banking; and here some words of explanation and reassurance are in order for those readers who are more interested in what rich families do with their wealth than in how they get it.
In fact, the firm of N. M. Rothschild & Sons was not technically a bank at all—at least not according to that great Victorian financial journalist Walter Bagehot’s definition in his Lombard Street (1873). “A foreigner,” he wrote, “would be apt to think that they [the Rothschilds] were bankers if anyone was. But this only illustrates the essential difference between our English notions of banking and the continental”:
Messrs Rothschild are immense capitalists, having, doubtless, much borrowed money in their hands. But they do not take £100 payable on demand, and pay it back in cheques of £5 each, and that is our English banking. The borrowed money they have is in large sums, borrowed for terms more or less long. English bankers deal with an aggregate of small sums, all of which are repayable on short notice, or on demand. And the way the two employ their money is different also. A foreigner thinks “an Exchange business”—that is, the buying and selling bills on foreign countries—a main part of banking . . . But the mass of English country bankers . . . would not know how carry through a great “Exchange operation” . . . They would as soon think of turning silk merchants. The Exchange trade is carried on by a small and special body of foreign bill-brokers, of whom Messrs Rothschild are the greatest . . . [The] family are not English bankers, either by the terms on which they borrow money, or the mode in which they employ it.
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