The House of Rothschild

by Ferguson, Niall

  What was qualitatively new was the priority which certain members of the new generation—Alfred, Nathaniel and Ferdinand in particular—gave their country houses, their gardens and their art collections. In itself, the house designed in the French seventeenth-century style for Alfred at Halton by William Rogers (built between 1882 and 1888) was no more spectacular than Mentmore; indeed, its main hall was smaller. It was the novelties like the private circus ring, bowling alley, ice-skating rink, indoor swimming pool and Indian pavilion which struck visitors as faintly absurd. Nor was Alfred’s collection of paintings and works of art more impressive than his father’s. The Dutch masters, the eighteenth-century English and French paintings, the Sèvres porcelain, the French furniture, the silver—these had all been to the taste of the older generation. Although he bought over 160 new paintings in all (compared with the thirty-eight he inherited), they represented variations on his father’s favourite themes (Greuze, Romney, Reynolds, Gainsborough, Cuyp). The only real shift was Alfred’s evident preference for the French eighteenth century. It was the fact that he published a lavishly bound and illustrated two-volume catalogue of the collection which was new; the fact that he accumulated such an immense amount of Sèvres (including sixty vases and objects and six full services); and perhaps also the enthusiasm for female portraits. Nor was Alfred the first Rothschild to show an interest in music (he composed six piano pieces entitled Boutons des Roses in honour of Mayer Carl’s daughters); but he was surely the first to conduct his own orchestra. The older Rothschilds had not been above ostentatious displays, but it is hard to imagine any of them dressing up as a circus ringmaster, complete with top hat, blue frock coat and lavender gloves, or wielding a diamond studded boxwood baton. Small wonder some guests were repelled by “the hideous-ness of the things, the showiness! the sense of lavish wealth, thrust up your nose... the ghastly coarseness of the sight.” Sir Algernon West, Gladstone’s secretary, dismissed it as “an exaggerated nightmare of gorgeousness and senseless and ill-applied magnificence”; his successor Edward Hamilton agreed. “The decorations,” he commented, “are sadly overdone, and one’s eyes long to rest on something which is not all gilt and gold.” David Lindsay was more contemptuous: Alfred, he recalled, had been “tinged with the tarnish of wealth.”

  Designed by Destailleur in a style which mixed Renaissance and eighteenth-century French elements, Ferdinand’s house at Waddesdon proved far from easy to build on the sandy and poorly drained terrain he had chosen; but the result was a triumph, arguably the greatest of the Rothschild houses. It had (and has) magnificent gardens, with fifty greenhouses and at least as many staff: the gardens alone cost his sister Alice £7,500 a year to maintain when she inherited Waddesdon in 1898, and a further £10,000 to maintain the other grounds, including the farm and dairy. Inside, there was a glittering collection, including Dutch works by Cuyp, de Hooch and ter Borch as well as English paintings by Romney, Reynolds and Gainsborough (whom Ferdinand did much to make fashionable).

  Yet Waddesdon—a Loire château in deepest Buckinghamshire—was not to every taste. Gladstone’s daughter Mary also felt “oppressed with the extreme gorgeousness and luxury” when she visited. The Liberal Lord politician Richard Haldane, who acted as a Rothschild legal adviser for many years, mocked the preciousness of Ferdinand’s hospitality. “I do love all seemly luxury,” he declared in 1898. “When lying in bed in the mornings it gives me great satisfaction when a lacquey softly enters the room and asks whether I will take tea, coffee, chocolate or cocoa. This privilege is accorded to me in the houses of all my distinguished friends: but it is only at Waddesdon that on saying I prefer tea, the valet further enquires whether I fancy Ceylon, Souchong or Assam.” David Lindsay remarked on the way “Baron Ferdinand[‘s] hands always itch with nervousness”:[He] walks about at times petulantly, while jealously caring for the pleasure of his guests. I failed to gather that his priceless pictures give him true pleasure. His clock for which he gave £25,000, his escritoire for which £30,000 was paid, his statuary, his china, and his superb collection of jewels, enamels and so forth (“gimcrack” he calls them)—all these things give him meagre satisfaction; and I felt that the only pleasure he derives from them is gained when he is showing them to his friends. Even then one sees how bitterly he resents comment which is ignorant or inept... [I]t is in the gardens and the shrubberies that he is happy... It is only when among his shrubs and orchids that the nervous hands of Baron Ferdinand are at rest.19

  Ferdinand’s often neurotic letters to another close friend, the Earl of Rosebery, give a similar impression. Even by the standards of the period, this was a highly charged relationship, though it seems that Ferdinand’s passionate feelings were not wholly requited. He summed his own personality up well when he told Rosebery in 1878: “I am a lonely, suffering and occasionally a very miserable individual despite the gilded and marble rooms in which I live.”20 Another friend, Edward Hamilton, wrote an ambivalent memoir following Ferdinand’s death in 1898 which deserves to be quoted at length:There was no one of late years of whom I have seen more, or from whom I had received greater and more uniform kindnesses. He always had a room for me at Waddesdon and a cabin on board his yacht... Though presumably he had to buy his experience when he was young, I believe he was less “taken in” than almost any other collector. The only times when his taste sometimes failed was in his choice of presents to others ... [He] was not open-handed like other members of the family, for he disliked parting with shillings... and had a horror of being done ... He had rather an unfortunate manner, and was not infrequently gauche. He gave and took offence easily; but au fond was most kind-hearted and loyal as a friend. No man was more uniformly glad to see one... and gave one the heartiest of welcomes. Having lived so much alone, and having at his command everything that he wanted, he was rather selfishly disposed, which is not to be wondered at. The spoilt child became the spoilt man... His leading characteristic was perhaps his impulsive and impatient nature. He was always in a hurry. He did not eat but devoured. He did not walk but ran... He could not wait for anybody or anything... There were some curious contradictions about him. He was very nervous about himself and sent for a doctor on the smallest provocation; but he often declined to follow the doctor’s advice. He took great care of himself as a rule, and yet he would often commit imprudences. He was proud of his race and his family; and liked talking about his predecessors as if he had an illustrious ancestry and the bluest of bloods... I doubt if he ever was a really happy man.

  This gives a good flavour not only of Ferdinand’s character but of the often ambiguous quality of the relationships between members of the family and members of the political elite.

  Like Alfred and Ferdinand, Nathaniel devoted most of his energies to houses, art and his own delicate sensibilities. The Renaissance style palais he built in the Theresianumgasse was one of the great Rothschild town houses; according to one account, he ran out of money at an early stage and had to borrow a million gulden from his father. (This did not stop him later spending tens of thousands of gulden on imported roses from Naples.) Inside, it was almost entirely French in style (one of the reception rooms by the sculptor François-Antoine Zoegger was especially ornate) and the art collection was the familiar mix: paintings by Greuze, Reynolds, Rembrandt and Van Dyck and numerous articles of furniture associated with Marie-Antoinette: in short, “le gout Rothschild” epitomised. Like Alfred, Nathaniel had his own orchestra; like Ferdinand, he lavished attention on his gardens, especially the park and hothouses at Hohe Warte created for him in 1884 by Bauqué and Pio and Jean Girette.21 And—predictably—Nathaniel was an excessively sensitive soul. A hypochondriac, he was especially prone to insomnia. Indeed, according to Hermann Goldschmidt, it was his search for a place conducive to sleep which led him to buy both the Reichenau and Enzesfeld estates, though he stayed only one night in the latter, leaving by the first train when he heard of the locality’s reputation for epidemics. When cruising in his 4 million gulden English-built ya
cht, he refused to sail too far from the coast for fear of drowning.

  This is not to disparage the Rothschilds’ collective contribution to the arts in this period. As a trustee of the National Gallery and the Wallace Collection, Alfred put his connoisseur’s expertise to public use, just as Ferdinand bequeathed some of the more unusual pieces which he had inherited from his father’s Schatzkammer to the British Museum, along with some he himself had collected.22 Alphonse too made a substantial public contribution to the museums of the Third Republic. Elected a member of the Académie des beaux-arts in 1885, he not only built up an impressive private collection of mainly Dutch masters, but also donated around 2,000 works—including pieces by contemporary artists like Rodin—to 150 different museums. The point is that for Alfred, Ferdinand and Nathaniel the aesthetic had taken over from the ascetic. It was a transformation hinted at in Oscar Wilde’s short story “The Model Millionaire, a note of admiration,” published in 1887, which describes how an impoverished young man-about-town gives a sovereign to a miserable old beggar whose portrait an artist friend is painting. The “beggar” turns out to be a disguised “Baron Hausberg,” “one of the richest men in Europe... [who] could buy all London to-morrow without overdrawing his account ... has a house in every capital [and] dines off gold plate.” He is also the artist’s patron, having commissioned him “to paint him a beggar.” (Predictably, the Baron repays the young man’s generosity by providing him with the £10,000 he needs to marry his beloved.) Here a classic Rothschild anecdote is translated into the idiom of the fin de siècle: “the model millionaire” has become a benevolent artistic patron, far removed from the origin of his millions—even if it is a little hard imagining Alfred dressing up as a beggar, even for the sake of a practical joke.

  Partners

  The question nevertheless remains how far all these symptoms of “decadence” actually affected the performance of the Rothschilds as bankers. Anecdotal evidence suggests that they did. When the ambitious young Hamburg banker Max Warburg arrived to serve a part of his apprenticeship at New Court in the 1890s, he was firmly told by Alfred: “A gentleman is not to be found in the office before eleven and never stays beyond four.”23 According to a Rothschild employee who joined the bank after the First World War, Leo’s routine was to arrive at 11 a.m., go to lunch at 1.30 p.m. and return home at 5 p.m.; Alfred generally arrived at 2 p.m., lunched at 3.30-4 p.m. and spent much of the remainder of the afternoon sleeping on a sofa in the partners’ room. Although he worked a good deal harder, Natty too gave the impression of being a reluctant banker. Asked if he had a formula for financial success, Natty habitually replied, “Yes, by selling too soon”—an attitude which has sometimes been seen as indicative of excessive risk-aversion. He grumbled to Rosebery about having to remain at the office like “a solitary hermit” after the end of the London “season.” Competitors were scathing about New Court as they had never been before. Edward Baring commented that the Rothschilds had become “so unreasonable and lazy that it is difficult to ensure a business being properly carried through under their direction. They refuse to look into new things and their intelligence and capacity is not of a high order.” Ernest Cassel, one of the dynamic newcomers to the City in the 1890s, was even more dismissive: the brothers, he declared in 1901, were “absolutely useless & not remarkable for intelligence.”

  To be sure, the London Rothschilds had an invaluable assistant in the “ever industrious” form of another young Hamburger, Carl Meyer, who became one of the confidential clerks in the 1880s. Meyer’s letters to his wife suggest that outside the partners’ room business at New Court continued to be conducted at a frenetic pace. “I have been working ever since this morning like a nigger,” he told her in a typical series of letters from the mid-1880s:His Lordship [Natty] asked me to lunch with him in the private dining-room—so you may imagine how I have worked ... I have been extremely busy again all day long and shall continue to be so if I want to get away on Friday evening. But it must be done... I have very little to tell you, except the old story that I can hardly hold my pen, so busy have I been all day long... I am really too beastly overworked.

  Meyer was a regular guest at the partners’ lunches not for the sake of his small talk but because these were intelligence-gathering exercises to which other bankers, brokers and civil servants were invited. Yet when he sought promotion to procurist in 1890 (asking for £6,000 a year, the right to sign for the firm and his own private office) he was turned down and his resignation was accepted in 1897. According to City gossip, the brothers felt he was getting “too big for his boots.” He left to work with Ernest Cassel.

  This de haut en bas treatment of subordinates was endemic. In 1905 Carl Meyer heard that Alfred was “becoming more unbearable than ever to the staff and treats men of 30 years service like office boys.” Stockbrokers also chafed at such treatment. As Alfred Wagg of Helbert Wagg recalled, “an interview with Lord Rothschild had to be amazingly rapid... He came in, placed a watch on his desk, and intimated that the interview would last five minutes, or three, or even less.” On one occasion, Natty asked the broker Fred Cripps the price of Rio Tinto shares. Having heard the answer, he said: “You are wrong by a quarter of a point.” To this Cripps not unreasonably replied: “Why did you ask me if you already knew?” “There was,” he recalled, “an awful silence in the room. I was utterly crestfallen, and under cover of the stifled hush I rapidly retreated.” Alfred Wagg had a similar experience in 1912, when he went to inform Natty that his firm was to leave the stock exchange:On arriving at New Court, I asked to see Lord Rothschild privately and he came to see me in a little room at the back of the building. I gave him the letter [explaining the firm’s withdrawal], the terms of which couldn’t have been nicer. He sat down and read it attentively. He then got up saying, “Well, you know your own business best,” and walked out of the room. Not one word of good wishes or of regret that the hundred years of intimate connection between the two firms was to cease.

  As we shall see, Fred Cripps was not wide of the mark when he commented on the quasi-royal quality of an “audience” with Natty: “One waited in an ante-room before being ushered into the presence, and then one filed through as though it were Buckingham Palace.” This kind of thing struck those on the receiving end as both anachronistic and out of proportion to the firm’s relative financial importance.

  Similar charges of complacency have been levelled against the French house for the same period. In 1875 Henri Germain of the Credit Lyonnais remarked that Alphonse brought to business questions “a sort of dignity which was not conducive to success. He never puts himself out, he always waits for people to come and find him.” Palmade has argued that by this time the Rothschilds were “on the wane,” yielding their primacy in French economic life to industrialists like Schneider. A study published in 1914 observed that although the Rothschild name continued to figure in major loans issued on the French market, it was actually the deposit banks which now placed most of the new bonds. It retained its “moral” influence—especially where diplomatic factors were important—but the Paris house’s real financial power was allegedly declining.

  There is evidence to support these views in the partners’ own correspondence: repeated complaints about competition from rivals, for example. “Others have become Millionaires,” grumbled Mayer Carl in 1869, “& ... the public laughs at our constant stupidity.” “The fact is,” he continued morosely the following year,that all these associations [meaning joint-stock banks] are so strong and find every body to support them that they do not want to us [and] are too glad if we leave it all to them as the public does not care any more about names & merely wants profit... It is useless to ... fancy that our position is the same which it was 30 years ago. Unless we want to be perfectly isolated we must pull with others & I have no doubt that you are of the same opinion as all these banks try to oppose us whenever they can and do not mind what sacrifice they make to show that they are just as powerful & influential than [sic] we a
re... [Y]ou have no idea how great the competition is & how difficult our position becomes in consequence of all these new banks who merely want to show that they can turn us out.

  Nor was this merely a temporary feature of the Grunderzeit. In 1906, Natty inveighed—with more than a hint of envy—against his former pupil “Warburg at Hamburg who resembles the frog in the fable & is swollen up with vanity & the belief in his own power to control the European markets, & interest all big houses in any & every syndicate.” There were also occasional expressions of complacency. “I share your opinion, my dear Alfred,” wrote Alphonse in 1891, “not to become apprehensive of competition nor of threatening Finance Ministers. We should do only business which suits us and under conditions convenient to us.” “We are glad to go on in our old humdrum & jog trot way,” wrote Natty in 1906 (in a letter expressing criticism of the methods of the Credit Lyonnais), “& are quite satisfied ... No doubt Monsieur Germain was a very able administrator & wonderfully good at organisation; but we here were old fashioned enough to believe that the system on which he transacted his business was essentially vicious.”

  Yet—as we shall see—it is not absolutely clear that the Rothschild houses did fare all that badly after 1878 in terms of profits and capital (figures for which were, of course, unavailable to contemporaries outside the partnership). In fact, the continuing effectiveness of key figures—in particular Natty, Alphonse and Albert—to some extent compensated for the feebleness of the likes of Alfred, Ferdinand and Nathaniel: To be sure, there were disagreements and even quarrels between the partners; but that was nothing new. If there was a problem it was that the world was no longer ideally suited to the activities of a multinational private bank with bases in London, Paris, Frankfurt and Vienna. Conflicts of interest between the various houses had always been a feature of the Rothschild system; but from the 1860s they became progressively more and more acute and ultimately ended in the disintegration of the partnership system in the early 1900s. Though personal factors played some part in this, it was primarily a consequence of economic and political events beyond their control: the segmentation of the European capital market, the political effects of the wars of 1859-71 and the reorientation of British and French foreign investment to extra-European markets.