The House of Rothschild, Volume 1

by Niall Ferguson

  If these critics portrayed Nathan as an interloper within the City, it was nevertheless also plausible to portray him as the personification of the City as a whole: as the leader of the “Change-Alley People,” of “Muckworm,” the gang of financiers and stockjobbers whom the Tory radical William Cobbett blamed for the post-war policy of deflation. A graphic example of this sort of critique is another 1824 cartoon, A New Court Fire Screen, which portrays the Rothschild-founded Alliance Assurance Company as a racket for defrauding country gentlemen. At the same time, this print also attacks Nathan’s connections with the Holy Alliance. The company’s building has an inscription which reads “Hollow Alliance Fire and Life Preserving Office” and is surmounted by five royal busts marked “Russia,” “Prussia,” “Naples,” “France” and “Austria.” At the very top of the print is a longer inscription which alludes to the Rothschilds’ counter-revolutionary role:

  Persons insured in this Office will be supplied gratis with a Box of veritable German Paste which if applied according to the directions of Prince H [or M?] & Co. will prevent fire. NB Should any Person obtain fraudulently a Box of the above miraculous Paste without being insured in this Office it will have the contrary effect and consume the House on the first appearance of the New Moon.

  Although the emphasis here is on the Rothschilds’ foreignness—Nathan and Moses Montefiore are pictured speaking French to one another, and there is a German porter with a thick accent—there is no mistaking the Jewishness of the three brokers in the foreground, congratulating one another on their profits.

  It was, however, a complex crisis at the highest level of British politics which did most to bring Nathan into the British public eye. In the wake of Lord Liverpool’s illness in February 1827, a ministry had been formed by Canning which united Liberal Tories, notably Huskisson, with Whigs like Lansdowne, but excluded Ultra-Tories led by the Duke of Wellington, who shared Nathan’s distaste for Huskisson’s liberal economic policies. When Canning unexpectedly died in August of the same year, the King commissioned the Chancellor of the Exchequer, Robinson (now Lord Goderich), to form a new Cabinet. But the King’s insistence that Herries be appointed Chancellor (as well as his refusal to have the Whig Lord Holland as Foreign Secretary) meant that Goderich’s term in office was exceedingly brief. At the Whig leader George Tierney’s instigation, Goderich and Huskisson appointed Lord Althorp as chairman of a finance committee without consulting Herries, prompting the latter to threaten resignation unless Althorp’s appointment was rescinded, and Huskisson to threaten resignation if it was. In the event, Goderich himself resigned in January 1828 and the King turned to Wellington to form a government—though the conflict between Huskisson and Herries was resolved only when Wellington agreed to replace him as Chancellor with Goulborn, demoting Herries to the office of Master of the Mint.

  The significance of the whole tangled affair lay in the identification of Herries with the King and his increasingly influential physician and private secretary Sir William Knighton; with the opposition within the Tory party to Catholic emancipation; and, perhaps decisively, with the financial interests—principally those of New Court—which were hostile to Huskisson. As early as August 1827 the Ultra-Tory Morning Chronicle was suggesting that Herries’s close connections with Nathan disqualified him from serving as Chancellor. In the debate which followed Herries’s demotion in February 1828, this charge was repeated by the Whig MP for Hertford, Thomas Duncombe, who called for the “mystery . . . about the late change” to be “cleared up, by the rising of the curtain which concealed persons of great consequence, incorporeal as well as corporeal”:

  There is . . . deny it who can, a secret influence behind the throne, whose form is never seen, whose name is never breathed, who has access to all the secrets of State, and who manages all the sudden springs of ministerial arrangement . . . Closely connected with this invisible, this incorporeal person, stands a more solid and substantial form, a new, and formidable power, till these days unknown in Europe; master of unbounded wealth, he boasts that he is the arbiter of peace and war, and that the credit of nations depends upon his nod; his correspondents are innumerable; his couriers outrun those of sovereign princes, and absolute sovereigns; ministers of state are in his pay. Paramount in the cabinets of continental Europe, he aspires to the domination of our own; even the great Don Miguel himself [see below], of whom we have lately heard and seen so much, was obliged to have recourse to this individual, before he could take possession of the throne. Sir, that such secret influences do exist is a matter of notoriety; they are known to have been but too busy in the underplot of the recent [ministerial] revolution. I believe their object to be as impure as the means by which their power has been acquired, and denounce them and their agents as unknown to the British consitution, and derogatory to the honour of the Crown.

  Duncombe “trusted that the duke of Wellington and the right hon. Secretary for the Home Department [Peel], would not allow the finances of this great country to be controlled any longer by a Jew, or the distribution of the patronage of the Crown to be operated on by the prescriptions of a physician [a laugh].”

  Responding for the government, Peel shrugged the attack off, denying knowledge of “the mysterious, incorporeal, and incomprehensible, being of which he had spoken” and denying “that the other more substantial personage had interfered, in the way stated by the hon. gentleman, with the financial affairs of the country.” But Duncombe’s speech was widely followed up. On February 25 a letter appeared in The Times signed “Algernon,” which declared indignantly: “We cannot suffer the destinies of a mighty Empire to be wielded by the unclean hands of a Jew and a man-midwife.” Writing under the pseudonym “Malcolm Macgregor, jun.,” the young Thomas Babington Macaulay contributed some satirical verses about the “mysterious two, / Lords of our fate, the Doctor and the Jew.”5 A number of satirical cartoons were also published on the subject, at least two of which were inspired by Thomas Dibdin’s 1800 play The Jew and the Doctor. In the first to appear (see illustration 5.ii), Nathan is pictured as a pot-bellied angel, descending from the clouds with bags of gold towards the “Ex-Clerk, Ex-Commissary, Ex-Auditor, Ex-Secretary, Ex-Chancellor” Herries. “Si help me Cot!” he declares in what is supposed to be a thick German-Jewish accent, “de Sinking Job will go to de Bottom of de melting pot if you don’t stick out Herry! You bote know dat I and only I am de Incorporial—never mind. I gave de Don Miggel and all de oder Dons de monish! plesh my hearts!” A second cartoon by Robert Cruikshank (see illustration 5.iii) shows Nathan—bearded, in a broad-brimmed hat and with a sack marked “Old Rags” over his shoulder—approaching Wellington with the words: “By Cot dat Doctor is von tam Jew—he want my perquist—you know fat I do for you—you give me de monish for dat fiddle—blesh moine heats!!!—.”

  5.ii: George or Robert Cruikshank, The JEW and the DOCTOR, or SECRET INFLUENCE BEHIND THE CURTAIN!! (Vide Times Feby. 19th 1828).

  5.iii: Robert Cruikshank, NEW SCENE FOR THE OLD FARCE OF THE JEW AND THE DOCTOR (March 1828).

  Duncombe was something of a maverick figure who moved to the left in the 1830s and 1840s, emerging as a keen supporter of Chartism, as well as of Italian and Hungarian nationalism. But it is suggestive that, though he never completed it, he also attempted to write a book entitled The Jews of England, Their History and Wrongs. It seems reasonable to infer that he, like Fournier in France, was one of those liberals of the 1820s who saw no contradiction in attacking conservative ministers and Jewish financiers, even in terms which by modern standards seem quite anti-Semitic. The cartoonists’ motives were not dissimilar. The original play The Jew and the Doctor is about a generous Jew who brings up a Christian child and endows her with £5,000. The cartoons invert the story by portraying Nathan in the act of trying to bribe Wellington. The recurrent theme is of a tottering government, inextricably tied not only to a corrupt court but also to a corrupting banker. In Cruikshank’s cartoon, Wellington sits on a coffin marked “Hic Iacit the Constitut
ion,” with two bottles behind him marked “Physic for Church” and “Physic for State.”

  Another cartoon of 1828 (see illustration 5.iv) entitled An Untoward Event, or a Tory Triumph shows Wellington being carried by Londonderry and two others. (Wellington carries the “Treasury Money Box,” a “Treatise on the Corn Laws,” the “Army Estimates,” a sword marked “Waterloo” and a bone marked “Commander in Chief ship,” on the end of an elaborate fork—an allusion to the post he relinquished while serving as Prime Minister.) One of the bearers says to Nathan: “Ah My good R-child, lend a hand, for he’s quite a dead weight.” But Nathan replies: “No, no, we’ll not put our shoulders to it. He’s no Daniel,” and a bearded Jew whispers: “No, No, take care of de Monish.” Old Corruption and New Corruption are portrayed as two sides of the same political coin. Yet, in each cartoon, stress is laid on Nathan’s Jewishness: sometimes his foreign accent is exaggerated, sometimes his appearance is altered to make him conform to the stereotype of the unassimilated immigrant, sometimes he is seen in the company of such a stereotype.

  5.iv: “Shortshanks” [Seymour], AN UNTOWARD EVENT, OR A TORY TRIUMPH (February 1828).

  The only qualification which needs to be made is that the cartoonists of the period can scarcely be accused of singling out Jews as targets for their satire. The Irishman and the Scotsman in A Tory Triumph are scarcely more sympathetically portrayed than the Jews. The Irishman has simian features and leans on a spade, muttering “Devil burn peat if he [Wellington] puts a finger to it, ’tis no good to poor Erin”; while the hook-nosed Scot in his kilt exclaims: “Na na Mon wanna he spend the siller on red jackets lang spurs and sic like.” Nevertheless, they conspicuously stand next to the “plain Englishman” John Bull. Nathan and the poor Jew stand on the other side of the road.

  From Canning to Wellington

  Was there any truth in these various allegations of hidden Rothschild influence? The answer is that there was, though the reality was more complex than the Rothschilds’ critics could know. As we have already seen, Nathan Rothschild had good reason to feel loyalty towards Herries, whose patronage had given him his single most important business opportunity, and hostility towards Huskisson, whose monetary and commercial policies he had consistently opposed. However, there was an additional political dimension which explains Nathan’s (at first sight puzzling) lack of sympathy with Herries. When he heard the news of his old associate’s defeat, he did no more than shrug, telling Carl: “Our friend Herries is annoyed because he has been given a poor job. He is annoyed, but I cannot help him. He must be patient, and perhaps he will get another job.” In fact, what interested and pleased Nathan far more was the fact that the Duke of Wellington had emerged from the crisis as Prime Minister.

  The cartoonists who depicted Nathan as trying to bribe Wellington or refusing to support his government were only slightly wide of the mark. Not only had the Rothschilds been cultivating the Duke assiduously since his victories over France (which they had, of course, largely financed); more importantly, his conception of British foreign policy accorded far better with Rothschild interests than that of his mercurial predecessor Canning.

  George Canning no more believed in “regenerating” Europe than his predecessor Castlereagh. What distinguished the two was Canning’s determination to pursue British interests, with minimal regard for the other great powers. As he put it, famously: “For Europe I shall be desirous now and then to read England.” He pointedly declined to take into account “the wishes of any other Government, or the interests of any other people, except in so far as those wishes, those feelings and those interests may, or might, concur with the just interests of England.” This explains Britain’s refusal to sanction the French intervention in Spain, to which Canning had responded with a strong pledge to uphold Portuguese neutrality and recognition of the Latin American republics’ independence from Spain. That did not much bother the Rothschilds, who comfortably played both ends against the middle over Spain. However, in his last years—particularly in his brief period as Prime Minister (April-August 1827)—Canning took bolder steps which did much to alarm the Rothschilds.

  There was already a degree of tension in their relationship even before Liverpool’s death. As James said in November 1826, “It would be a mortal sin to be dependent . . . on a Canning.” The feeling was mutual: the following month, when Canning received details of an important speech in Paris from the Rothschilds twelve hours before the official report of the speech from the British embassy, he wrote angrily to his ambassador:

  You must make full allowance too for the day which I passed on Saturday. “Good God! what! nothing direct from Paris! Perhaps it is a mere stock-jobbing report.” “Perhaps it is a trick of M. Rothschild’s.” . . . Such were the propos of the morning . . . I hope you will contrive to establish some communication with the F.O. at Paris, that will prevent Rothschild from getting official papers, (news you cannot help), before you.

  That this less than friendly figure was to be Prime Minister deeply alarmed the Rothschilds. James immediately anticipated “a very serious crisis on our hands in Spain and in Portugal” and “a complete standstill in business activity” in Paris. For in December 1826, “to defend and preserve the independence of an Ally,” Canning had sent troops to Portugal in support of the young Portuguese Queen Maria, whose claim to the throne was being challenged by her uncle Dom Miguel. Because Miguel had the backing of the reactionary Bourbon regime in Spain, which in turn was supported by France, this raised the possibility of a confrontation between Britain and France. For the first time, the Rothschilds appreciated what a large stake they had in peace between the great powers. For nothing could do more to weaken the price of consols, rentes and every other security they and their clients held than a war. Although Villèle had reassured James in November “that I should not be silly because England and France would never go to war on account of such miserable people like the Spanish and Portuguese,” James had been worried enough about Canning’s attitude “to remain on the sidelines” (that is, to make no major purchases or sales) until the crisis blew over. The appointment of Canning as premier revived these fears of Anglo-French conflict over Portugal. The brothers took the view that Canning was backing the wrong side in what might prove to be a bloody civil war. At an early stage they seem to have made a decision in favour of Dom Miguel, though it is not clear why.

  The second reason for Rothschild anxiety about Canning was his anti-Turkish (and therefore pro-Russian) policy over Greece. By 1826 the risings by Greek communities in Moldavia, the Peloponnese and Missolonghi against Ottoman rule had been largely crushed by the Egyptian Prince Ibrahim Pasha (the son of Mehemet Ali). From the point of view of Metternich, this was an entirely satisfactory outcome: another revolutionary threat to the status quo had been thwarted. However, Greek sympathisers in Britain and France, excited by reports of Byron’s death at Missolonghi and of Turkish cruelty, clamoured for some kind of intervention. More seriously, traditional Russian ambitions in the region appeared to revive with the accession of Nicholas I as Tsar. In the hope of averting unilateral Russian intervention on behalf of the Greeks, Canning sent a reluctant Wellington to St Petersburg in April 1826 to agree a joint Anglo-Russian policy. The deal struck effectively gave Russia a free hand in Moldavia, while committing the two powers to impose some settlement on the Turks—forcibly, if need be—which would grant the Greeks limited self-government; a policy which Villèle endorsed in July 1827. The upshot was that in the autumn of 1827 a joint naval expedition was sent to the Eastern Mediterranean and inflicted a decisive defeat on the Ottoman forces at Navarino.

  As Villèle himself put it, however, “Cannon fire is bad for money”; and, like Canning’s threat of war over Portugal, his commitment to joint military action against Turkey perturbed the Rothschilds. There were two reasons for this: firstly, they were inclined to share Metternich’s pro-Turkish attitude, even if plans for a loan to Constantinople had come to nothing in 1825; secondly, their relat
ions with St Petersburg had taken a distinct turn for the worse since the appointment as Finance Minister of Count Kankrin, who made no secret of the fact that he regarded the Rothschilds’ 1822 loan to Russia as “useless.”

  All this helps to explain why Nathan was so delighted by the emergence of Wellington as Prime Minister in 1828; for it was well known that the Duke disapproved of Canning’s policy abroad, sharing the King’s view that he had played into the Tsar’s hands by turning against Britain’s “ancient ally,” the Sultan. “Consols have gone up because of our [new] Ministers,” Nathan reported gleefully to Carl. “Praise be to God that we have good news, as Russia will wait [before taking further military action], through Wellington everybody is for peace which does not surprise me, for our King in his speeches is nothing but schalom aleichem [peace be with you].” When Mrs Arbuthnot asked Nathan at around the same time “what they thought of the Duke in the City, [h]e said they had unbounded confidence in him.” In the two and a half years of Wellington’s premiership which followed, that unbounded confidence was translated into concrete financial support for a foreign policy markedly different from Canning’s. Not only did Nathan purchase substantial sums of exchequer bills in 1828 (£1 million) and 1829 (£3 million); he also provided Dom Miguel with £50,000, “under the guarantee of the British Government,” to enable him to take possession of his office as Regent in Portugal. At the same time, he floated a £769,000 loan to Miguel’s brother Pedro, the Emperor of Brazil, in an effort to stabilise Brazilian finances, still reeling from the 1825 Latin American debt crisis.6