Firstly, Nathan called on his sons to “carry on in harmony and peace the banking house founded by me under my name in London.” Secondly, he stressed that they were to do so in consultation with his widow: “My dear wife Hannah . . . is to co-operate with my sons on all important occasions and to have a vote upon all consultations. It is my express desire that they shall not embark on any transaction of importance without having previously demanded her motherly advice . . .” Thirdly, he expressed his
earnest wish that the association between my firm in London, now carried on by my four sons, and the other Houses, which my four dear brothers direct, shall be allowed to continue, that they shall continue to remain partners together . . . I thereby recommend my sons in their business always willingly to follow the advice and recommendations of my brothers . . .
Finally, as his brother recalled, Nathan spelt out a series of amendments to the new partnership agreement:
On his deathbed, Nathan asked me to have the contract renewed with his surviving sons, with the provision that it should not be terminated within a period of five years . . . The firm of N. M. Rothschild [thus] remains unaltered, the sons together acting as a unit with one vote in the partnership. The whole trading capital of the four brothers and of the late N. M. Rothschild cannot be touched for the next five years, and nobody can draw anything out of the working capital, while we have reduced the interest that we draw individually from four to three per cent, so that the partnership as a whole will, with God’s help, still further improve its position in the five years, as the proportion of the funds which can be spent has been reduced, and there is no necessity for the young men to be drawn into speculative ventures.
These wishes were duly incorporated in a hastily drafted annexe to the original agreement.
The practical provisions for the future having been made, Nathan proffered some parting advice:
[He] charged his eldest son, and through him all those who were not present, always to apply all their efforts to keep the business property intact and not to participate in any risky ventures. He gave them much wise counsel, bade them avoid all evil company and always to keep in the way of true virtue, religion and righteousness. My late brother told them that the world would now try to make money out of us, so that it behoved them to be all the more careful, and he remarked that, whether any son had £50,000 more or less, was a matter of indifference to him. All that mattered was that they should hold together in unity.
“He died,” Salomon wrote, “in the full possession of his faculties, and ten minutes before his death he said, as he received the last consolations of religion that are customary with us: “It is not necessary that I should pray so much, for, believe me, according to my convictions I have not sinned.” . . . [Then] to my daughter Betty, as she took leave of him, he said in the truly British style, ‘Good night for ever.’ ”
Five days later a carrier pigeon from Boulogne conveyed the news to London in a single, three word sentence: “Il est mort.”
Legacy and Legend
The deaths of only a handful of individuals in the nineteenth century can be said to have had economic effects comparable with those caused by the death of Nathan Rothschild. When the Austrian Emperor Francis had died a year before, there had been a minor panic on the Viennese stock exchange and the price of Austrian government bonds had fallen sharply; but the Rothschilds had intervened to prop up the markets. When Nathan died, by contrast, it appeared that the markets’ strongest prop had been removed. The financial press had been anxiously reporting on Nathan’s health for nearly a week before the news of his death was first published. On July 27 The Times had felt able to report (wrongly) that his condition was “not at all dangerous.” On August 2 it categorically denied reports in other papers that he had died. But, as its “Money Market and City Intelligence” column admitted, opinion in the City was less sanguine:
The dangerous state in which Mr Rothschild remained, by the accounts from Frankfort, has again today had its effect upon Spanish and Portuguese securities, and a further depression of 1½ per cent has taken place with them . . . [I]t seems generally accepted that the firm would call in all the loans advanced upon those securities by Mr Rothschild, and hence the anxiety of the borrowers to dispose of their stock, so as to be in a position to meet the demands upon them. The sales today were extensive, but from the weak state of the market it was, in fact, possible to realize but a limited amount . . . There was very little business doing in the share market. Consols have partly recovered the depression they sustained on Saturday, in consequence of the accounts from Frankfort above referred to, but they do not, on the whole, present a very firm appearance.
When the news of Nathan’s death was finally confirmed the following day, there was—paradoxically—a slight rally, suggesting that the markets had been discounting the event:
Government securities of all descriptions, but more particularly those of the foreign markets, have been falling in value during the week, in anticipation of this event, but its confirmation has had a contrary effect, probably on account of the understanding there is that his business, under the management of his sons, will go on as usual.
However, this was only temporary. For Nathan’s death coincided with, and perhaps also exacerbated, the onset of the international financial crisis which had been developing throughout his illness.
The period from May 1834 until July 1836 had been one of general financial stability. The price of consols had fallen below 90 only in a handful of weeks, and it had been above 91 for the last six months of the period. But from the first week of August—when the news of Nathan’s death broke—until the end of the year, it fell steadily, reaching a nadir of 87 in November (see illustration 11.i). Just days before, on July 21, Bank rate (in effect, the Bank of England’s base lending rate) had been raised for the first time in nine years from 4 to 4.5 per cent; on September 1, it went up by another half point. The Rothschilds’ own profit and loss accounts show that in 1836 the London house suffered its first loss—equivalent to more than 4 per cent of its capital—since the revolutionary year of 1830. These losses very probably accrued in the second half of the year.
Nathan’s Times obituarist—probably his friend Thomas Massa Alsager—was not exaggerating when he called Nathan’s death “one of the most important events for the city and perhaps for Europe, which has occurred for a very long time”: for his “financial transactions [had] certainly pervaded the whole of the continent, and may be said for years past to have exercised more or less influence on money business of every description.” “The variations of all stocks & their wild fluctuations,” remarked Alexander Baring, “seem to arise much from Nathan’s death. In the end the emancipation of the money market will be a benefit, but the sudden cessation of a despotic rule is apt to exhibit such symptoms.” Similar views were expressed some months later in a pamphlet on monetary matters by David Salomons, who described Nathan’s death as “an event of some importance in the derangement of the circulation of the country”:
It is well known with what dexterity that eminent individual managed the exchanges; how he prided himself in distributing his immense resources so that no operation of his own should abstract for a lengthened period the bullion of the Bank of England; and although it may be urged he kept the exchanges in an artificial state, and therefore produced no ultimate good, yet the sudden withdrawal of this artificial aid in an inopportune moment has tended to aggravate evils which his energy and promptitude might have checked. The difficulties which we have been experiencing since his death induce me to think that no one ever displayed greater ability than he did in equalising the exchanges; and I attribute much of the late embarrassment to the loss of that activity, zeal and enterprise, which he always displayed in times of financial difficulty, and although the operations of his important house are continued, it is impossible at once to replace that moral influence which the acknowledged good judgement of the head of that opulent firm had established for himself n
ot only in Great Britain but throughout the whole of the commercial world.
It is understandable, then, that the financial world paid more than ordinary respects to the deceased. As The Times described it, Nathan’s funeral cortège on the morning of Monday, August 8
was headed by a party of the city police four a-breast, followed by an inspector on horseback; next came several other city officers, and these were immediately followed by the hearse. The sons and immediate relations of the deceased followed in mourning coaches; and the whole line of these vehicles consisted of 40, containing numerous branches of the Goldsmid, Cohen, Samuel and Israel families. After the mourning coaches came the carriages of the deceased and his two sons, and behind these the carriages of the Lord Mayor, Mr Sheriff Salomons, and a line of foreign Ambassadors’ and noblemen’s carriages, in all to the number of 35. The whole procession consequently consisted of 75 carriages; and it was more than a quarter of an hour in passing through Cornhill. The crowd of people who had come to this part of the city was so great that many of the shops were shut to protect the windows from the pressure and there was scarcely a window in the line that was not crowded with spectators.
11.i: The weekly closing price of 3 per cent consols in 1836.
The occasion was appropriately commemorated. A lithograph was produced, The Shadow of a Great Man, which depicted in silhouette the already well-known image of Nathan in front of his pillar in the Royal Exchange, holding four keys to represent the succession of his four sons (see illustration 11.ii). This image was reproduced by several different artists, including one of Nathan’s own clerks (see illustration 11.iii).
Just two days after the funeral, the poetaster William Heseltine published his “Reflections at the Grave of N. M. Rothschild Esq.,” verses which tempered formu laic praise of “the Croesus of the Land” with just a hint of realism:
11.ii: Mons. Edouart, The Shadow of a Great Man, published by J. Knight, Standidge and Lemon (August 6, 1836).
11.iii: R. Cullen, SHADOW of the late N. M. ROTHSCHILD ESQ. (1837).
. . . Europe’s kings in adverse hour
Have sought and found thine aid.
More than their swords thy gold hath done,
In many a bloodless triumph won,
And many a panic stay’d . . .
Upon thy struggling path of life
Strong lights and shades were cast,
Which led through toil, suspense and strife
To triumph at the last!
In the continual conflict then,
With selfish, artful, flattering men
Through which thy spirit pass’d
What wonder though some stains of earth,
Were blended with thine inward worth.
Though cold unto a stranger’s sight,
Thy heart was generous found,
Nor didst thou, like the Upas, blight
The lowly shrubs around;
But friends, protected at thy side,
Grew with thy growth and flourish’d wide
In safe and prosperous ground:
As unto Egypt’s saviour came,
All that could boast of Israel’s name.
Mourning rings and broaches were produced, as well as a medal featuring Nathan’s face. There was even a printed silk mourning scarf, again picturing Nathan at his pillar, bearing a rather more succinct tribute (in four languages)—“Equally Distinguished for his Commercial Skill & Enterprize & for his Charitable and Benevolent Disposition”—as well as a list of his best-known loans and a statement of his total wealth. Such mementoes (as the scarf’s multilingual text suggests) reached an international audience. Copies of the scarf itself were sold in Vienna; Heseltine’s verses inspired a similar German tribute; and obituaries appeared not only in the English press but also in the Journal des Débats and (at Salomon’s prompting) in the Allgemeine Zeitung.
Needless to say, it was not only the financial community which mourned the great man’s demise. As The Times mentioned, the diplomatic and political world was also well represented at the funeral: among the mourners were the Prussian, Russian, Austrian and Neapolitan ambassadors, as well Lord Stewart and—according to one account—the Duke of Marlborough. And, of course, the Jewish community also turned out in force. “A great number of Jews . . . had assembled long before the hour fixed for the funeral” and a special delegation of children from the Jews’ Free School preceded the coffin. At the Great Synagogue in Duke Place, the Chief Rabbi Solomon Hirschell preached a sermon; and Nathan’s remains were finally buried in the north-west corner of the Jewish burial ground in Whitechapel Road. Seven members of the community of the Great Synagogue attended New Court daily in the year after Nathan’s death to form the required “minyan” for the Kaddish, the traditional prayers for the dead.
How are we to account for this extraordinary public interest in the death of a German-born, Jewish banker? The obvious answer is that Nathan Rothschild was quite simply the richest man in Britain and therefore, given Britain’s economic lead at this time, almost certainly the richest man in the world. His share of the combined capital of the five houses which he ran in partnership with his brothers was £1,478,541 when he died (a quarter of the total of just over £6 million). He had also given his children before his death around £800,000, and was able in his will to bequeath in total a further £1,192,500 to them and other members of his family. This implies that Nathan’s total wealth—excluding his properties in Piccadilly and Gunnersbury Park but including money he had already given his children prior to making his will—was around £3.5 million.
This was a fortune vastly in excess of the Rothschilds’ nearest banking rivals in London, Baring Brothers, whose capital in the year of Nathan’s death was a mere £776,650. It also easily outstripped the money accumulated by contemporary industrialists and the largely inherited fortunes of the country’s wealthiest aristocratic landowners. Rubinstein’s figures for British millionaires do not give precise figures for fortunes in excess of £1 million before 1858; but it seems unlikely that any of the eleven other individuals listed for the period 1810-56 left his heirs as much as Nathan: the nearest was that of the banker William J. Denison, who left £2.3 million including real estate worth £600,000 in 1849. It was not until 1857 that someone left more than Nathan to his heirs—the textile warehouseman and Anglo-American banker James Morrison, who left between £4 million and £6 million at his death. Nathan not only died richer than the ironmaster Richard Crawshay and the cotton manufacturers Robert Peel and Richard Arkwright; he also left more than the Duke of Queensberry, the Duke of Sutherland and the Duke of Cleveland.
Of course, it is far from easy to compare a fortune such as Nathan’s, which overwhelmingly took the form of financial assets, with the wealth of the great landowners. However, the incomes from their different forms of capital can be compared. The available figures suggest that a handful of aristocrats had incomes comparably large, if not slightly larger: the Duke of Northumberland, Earl Grosvenor, the Marquess of Stafford and the Earl of Bridgewater were all said to have £100,000 a year “clear of everything” in 1819; and not far behind them were the dukes of Bedford, Richmond, Sutherland and Buccleuch, the marquesses of Westminster and Bute, and the earls of Derby, Lonsdale, Dudley and Leicester. The 6th Duke of Devonshire, to take one example, had an income of between £80,000 and £100,000 in the decade of Nathan’s death. By comparison, Nathan’s income in the last five full years of his life (taking the average profits of the London house as a proxy) averaged £87,623 per annum.
However, these figures overlook a vital factor which gave Nathan financial superiority over his noble contemporaries. He had debtors: they had debts. By the 1830s the Duke of Devonshire’s lavish lifestyle had increased the encumbrances on his estates from £593,000 to £700,000; and interest charges on these debts consumed fully half of his income, with a further £36,000 per annum being consumed by the costs of his household at Chatsworth. Indeed, a number of the great landowners were heading rapidly fo
r the financial rocks at the very time that Nathan died. By 1844 the Duke’s debts were just short of £1 million, and he was increasingly obliged to sell off land to keep afloat. In 1848 the Duke of Buckingham actually went bankrupt, with encumbrances on his estates in excess of £1.5 million. The idea that Nathan Rothschild had died “leaving Property to the Amount of 5,000,000 Sterling” was therefore in itself a matter for public curiosity, not to say astonishment: hence its publication at the very centre of the mourning scarf described above. The figure may have been a slight exaggeration, but it was a pardonable one. In terms of net wealth he was in a league of his own.
What was even more remarkable was how much more Nathan Rothschild was worth when he died than when he had first arrived in Britain. According to his own account, he had arrived in England with just £20,000. Moreover, he had worked his way up into the City from the much less refined textiles sector, having begun his British business career as a cloth merchant in Manchester. He, more than most wealthy Jews of the nineteenth century, really had gone from “rags” to riches. As such, he embodied perfectly the developing nineteenth-century ideal of the self-made man. And of course he was not the only rich Rothschild. Muhlstein’s figures suggest that James was already probably the richest man in France. In the less prosperous parts of Europe where they lived, Amschel, Salomon and Carl were even further ahead of their rivals. Together, the Rothschilds were without question the richest family in the world.
The House of Rothschild, Volume 1 Page 51
