These were ventures into unfamiliar terrain for a bank which had been almost exclusively concerned with overseas business for more than a century, and inevitably there were teething troubles. News of the London National Property issue leaked into the press, occasioning an ugly confrontation between Stephany and the veteran City editor of the Financial News, whom he accused of “picking up rumours in railway lavatories.” Although heavily oversubscribed, the Woolworths share offer was nearly wrecked by a minor City panic the weekend before the lists closed. With the letters of acceptance still waiting to be sent out, last-minute withdrawals began to pour in on the Monday morning. Staff had to work all night behind locked doors, completing and sending out acceptance letters before any more subscribers could pull out. Of course, by comparison with the Paris house, with its extensive investments in railways and electricity companies, the London house remained a minor force in the world of domestic corporate finance. But an important step had been taken in a direction which would prove vital to its recovery after 1945.
The extent of the Rothschilds’ relative decline in the inter-war period should not therefore be overstated. The generation of Rothschilds who grew up in those years detected no waning of the family’s wealth: indeed, the mores of the previous century were preserved as if in aspic. Guy and his sister Jacqueline had one English nanny each, though the two women disliked one another so intensely that they refused even to lunch together. The children thus grew up in a bizarre isolation not only from their parents, whom they lunched with once a week, but also from one another. They were isolated from the outside world too. As a schoolboy, Guy was driven to and from the lycée by one of his father’s chauffeurs with a footman to provide additional protection. Much of his time was spent not in Paris but at one or other of the family’s country houses. Each year the entire household progressed from Ferrières (November to January) to Cannes (February or March) and then on to Chantilly (Easter and July to September). Similarly, Edmund’s youth was divided between the house his father leased at 18 Kensington Palace Gardens and his 2,500 acre estate at Exbury in Hampshire. Here and on the other great family estates, their parents pursued their expensive pastimes much as their grandparents had done before them. While Lionel indulged his passion for horticulture with the aid of up to 400 gardeners at Exbury, Edouard had his beloved racehorses at Chantilly. Maurice’s wife Noémie meanwhile moved with the times by building an Alpine sports complex at Megève. As they came into their money, therefore, the younger Rothschilds felt no embarrassment about consuming conspicuously. For Guy, the 1930s meant golf, American cars, dancing at Biarritz and baccarat at Deauville. Philippe built himself a seaside villa at Arcachon, the better to entertain other men’s wives, and helped his father to squander yet more money by building his own theatre in the rue Pigalle (a suitably louche location).14
Yet there were signs that the grandeur was beginning to fade. In 1922, Jimmy had rather unexpectedly inherited Waddesdon when Ferdinand’s unmarried sister Alice died; but when Harold Nicolson stayed there in July 1939 he was unimpressed (as he complained to Vita Sackville-West):Hardly a thing has been changed since the old Baron [Ferdinand]’s time. There are marvellous pictures and Sèvres, but execrable taste. Jimmy hates anything being altered, and the lavatories still have handles you pull up instead of chains you pull down. There is no running water in the bedrooms, and although it is very luxurious as regards food and drink and flowers, it is really less comfortable than our mud-pie in the Weald.
Was this merely aesthetic conservatism, or were the huge running costs of the great houses beginning to pinch? Certainly, some of the old Rothschild houses had to be relinquished altogether. Halton was sold to the Royal Air Force after the war for £112,000, Aston Clinton was turned into a hotel and Gunnersbury became a public park. Tring would also have gone if the Museum of Natural History could have been persuaded to accept it as a gift.15 The first Rothschild house in the West End, 107 Piccadilly, was demolished to make way for a hotel ballroom in 1929; nine years later, Alfred’s grand house at 1 Seamore Place went the same way to allow the extension of Curzon Street. The lease on 148 Piccadilly was surrendered and its contents auctioned off in 1937.16 Three of the French Rothschilds’ houses were also given up.17 Perhaps the most poignant symbol of the times was Walter’s decision to sell almost all his Tring collection of stuffed birds (apart from 200 ostriches, rheas and cassowaries) to the American Museum of Natural History for $225,000 (less than a dollar per specimen).
In 1935 the Jewish Chronicle ventured to suggest (with perhaps a hint of relief) that the Rothschilds’ “heyday” was “waning”: “The age of rationalisation and of multiple stores, of chemicals and oil has dawned ... the sway of the former ruling families [is] no longer absolute.” Once there had been a certain grudging, deferential respect for the Rothschilds’ grandiose way of life. Now, in the straitened circumstances of the 1930s, it came to seem faintly absurd—witness the two anecdotes most often related about Lionel. “No garden, however small,” he is said to have proclaimed in a speech to the City Horticultural Society, “should contain less than two acres of rough woodland.” Confronted with a canteen of cutlery (to be given as a wedding present to an employee), he was mystified. “Well, that’s not much good,” he exclaimed. “You could never have more than twelve people to dinner.” There are similar jokes about the French Rothschilds’ luxurious bathing habits and their diet of puréed pearls in Albert Cohen’s surreally comic novel Mangeclous. Even a sympathetic writer like Cecil Roth detected the intimations of decline. His book The Magnificent Rothschilds (1938) could be read as an epitaph not only for the third and fourth generations (the last of whom had died the previous year), but also for the family’s magnificence: “All had passed away ... It was a different world.”18
In the light of all this, perhaps it is understandable that the most intellectually gifted of the next generation of Rothschild men turned his back on the family business. In part, this was a vote of no confidence in the profession of banking, understandable given the “moribund, boring, rather painful” aspect of the City in the 1930s. But it may also have been due to the influence on Victor at Cambridge of that generation of Apostles which included Anthony Blunt and Guy Burgess, whose political sympathies were inimical to capitalism per se. Years later there would be speculation about Victor’s relationship with the Cambridge spies, culminating in the false allegation that he was the “fifth man” (a last, hitherto unexposed Soviet “mole” within the British secret service). His relationship with Blunt and Burgess after both had been recruited by the NKVD remained close enough to furnish circumstantial evidence for such claims. Not only did they rent his house in Bentinck Street during the war; it was also Victor who, in August 1940, recommended Blunt to MI5 (less than a year after he had been discharged from an intelligence course at Camberley because of his Marxist beliefs). And in Paris in 1944 Victor strongly seconded Kim Philby’s argument that the Soviets should have been given the “Ultra” intercepts.19 Yet it seems that Rothschild knew nothing of his friends’ treachery at this time. Though unquestionably left of centre in his politics in the 1930s and 1940s, Victor found communism “rather dull,” as he confessed to Keynes, an Apostle of the older generation. (Nor was he a homosexual, one of the “weaknesses” which attracted the Russians to Blunt and Burgess.) When he finally discovered in 1962 that Philby was a communist, he had no hesitation in passing the information on to his former MI5 colleagues.20
At any event, Victor’s decision to eschew finance left a gap which his cousins were too young to fill. After an undistinguished Cambridge career, Edmund, the elder of Lionel’s two sons, embarked on a round-the-world trip in October 1937 which he did not complete until May 1939. Although the tour included visits to a number of important Rothschild agents (for example, in Brazil and Chile), it was far from obvious that he had a financial vocation.
The French house lost a partner too at this time, though under very different circumstances. The death of Edmond in 1934 tr
ansformed overnight the balance of power in the rue Laffitte. Because Edmond’s eldest son Jimmy had made over his share to his father, his brother Maurice—the maverick politician—now stood to inherit fully a third of the equity, to say nothing of half Edmond’s 33 per cent stake in château Lafite. Possibly because of his political activities, possibly because of his involvement with a disreputable property company, his cousins Edouard and Robert decided to buy him out. Maurice, however, refused to go quietly. After the three partners had failed to reach agreement over an unprofitable Moroccan company in which de Rothschild Frères had invested 80 million francs, Maurice sued, citing his grandfather James’s stipulation “that the three branches of the family descended from him always be represented.” Only in September 1939, after arbitration, was the buy-out settled. Subsequent developments have perhaps cast doubt on the wisdom of this splitting of the French family’s resources. At the time, however, Maurice seemed dispensable, especially as Guy had now settled into the partners’ bureau. In any case, more and more of the day-to-day management of the Paris house and its vast business empire was being entrusted to outsiders, notably the former civil servant and Minister of Public Works René Mayer.
The Flood
The great irony is that it was precisely at this time of their greatest weakness that the myth of Rothschild power reached its zenith. Propelled into power by the miseries of the Depression, both the radical left and the radical right in France, Germany and Austria directed propaganda of unprecedented intensity against the family. This combined assault from both ends of the political spectrum was, of course, nothing new: the Rothschilds had been attracting such opprobrium for more than a hundred years. What was new was the fact that for the first time rhetoric was translated into political action.
In France the events of 1934 did much to revive hostile interest in the Rothschilds. The suicide of a minor-league fraudster named Stavisky in January exposed yet another of those financial scandals which were such a characteristic feature of the Third Republic. The following month—partly as a consequence of the government’s botched attempts to get to the bottom of the affair—there was an attempted right-wing coup by a loose coalition of “leagues” ranging from the now somewhat grey-haired Action Française of Charles Maurras to the more youthful Croix de Feu, a veterans’ association led by Colonel Francois de la Rocque. Although the coup failed, it forced the government of Edouard Daladier to resign. Later that year, at the Radical party’s annual congress, Daladier launched a tirade against the “two hundred families”21 who, he alleged, were “masters of the French economy and therefore of French policy.” “These are forces,” he added with the hint of a threat, “that a democratic state should not tolerate.” The hint was enlarged upon a year later by the Communist newspaper L‘Humanité which alleged links between the Rothschilds and La Rocque. In fact, La Rocque was on the payroll of the industrialist Ernest Mercier and Robert de Rothschild had no objection to being seen alongside him at the rue de la Victoire Synagogue on June 14, 1936. But virtually all other elements of the French right—including writers like Céline and Pierre Gaxotte (editor of Je suis partout)—were anti-Semitic. In January 1939 Maurras“ journal L’Action Française accused the Rothschilds of fomenting war between France and Germany to defend the position of German Jews.
It was the left which had the first opportunity to carry out its threats. In 1936 the Radicals, socialists and communists united to form the Popular Front government, pledged to achieve, among other things, “the liberation of the State from the grips of financial feudalism by establishing the nation’s sovereignty over the Banque de France through the dismissal of its board of directors.” Robert rightly foresaw “difficult days, weeks, months, as all skies—internal, financial and external—are terribly black.” Once in power, the Popular Front achieved much less than its more radical supporters had hoped. True, the new government sought to dilute the power of the “two hundred families” by giving the Banque de France a new council in which shareholders were outnumbered by “experts.” But it did not nationalise the Banque outright. Even the termination of the private railway companies’ concessions for the seven principal railway lines could hardly be portrayed as confiscation. When the state took over the operation of the Nord line, the Compagnie du Nord did not cease to exist; on the contrary, it received in return 270,000 shares in the new Société Nationale des Chemins de Fer, a guaranteed annual royalty on its revenues and a seat on its board. It is arguable that, thanks partly to the hard bargaining of René Mayer, the companies came out ahead, as the state took over from them debts totalling 6 billion francs, while the companies were able to retain their non-rail assets.
An altogether more ruthless coalition had come to power in Germany in 1933, dominated by the National Socialist German Workers’ Party. Hostility to the Rothschilds had been a feature of Nazi propaganda from the movement’s infancy (see introduction to volume 1) despite the fact that the Frankfurt house had been wound up when Hitler was barely twelve years old. It was a hostility which was soon translated into action. At first the attacks were largely symbolic: in December 1933 the Frankfurt Rothschildallee was renamed Karolingerallee, while the Luisenplatz and Mathildenstrasse lost the plaques identifying them with members of the family. It was not until April 1938, with the “Ordinance on the Registration of Jewish Assets,” that Rothschild property came under direct attack. In the wake of the orchestrated anti-Semitic demonstrations of the following November (Reichskristallnacht), nearly all the myriad Rothschild charitable and educational foundations—of which there were around twenty—were dissolved, with the exception of the Carolinum Dental Clinic, which had become part of Frankfurt university. The largest of these, the Baron Wilhelm Carl von Rothschild Foundation, was “Aryanised” under pressure from the city authorities, so that all references to its founder were expunged. At the same time, the Reich Association of Jews in Germany was forced to sell the Mathilde von Rothschild Paediatric Hospital, the Georgine Sara von Rothschild Foundation for Infirm Foreign Israelites and the Rothschild residence at Grosser Wollgraben 26 to the Frankfurt municipality. The Gestapo also confiscated the A. M. von Rothschild Sanatorium for Lung Diseases in the Black Forest. At least four other Rothschild-founded institutions suffered the same fate.22
The private property of the few family members still resident in Germany was expropriated by similar methods, though there was in fact relatively little of it left by 1938. Before the process of confiscation began, Max von Goldschmidt-Rothschild’s sons Albert, Rudolf and Erich sold the family houses at the Grüneburg and Königstein and opted to emigrate (Albert to Switzerland, where he committed suicide in 1941 when faced with the threat of expulsion). But Maximilian—now 95—was too old to leave. He stayed on in the house in the Bockenheimer Landstrasse, with the garden which his wife’s great-uncle Amschel had acquired over a century before in the earliest days of Jewish emancipation in Frankfurt. Or rather he was allowed to occupy a room in the house; for in a tragic fulfilment of Amschel’s nightmare—dating back to the nights in 1815 when he first slept in the “free air” of the garden—Maximilian was forced to sell the property to the city of Frankfurt for just 610,000 reichsmarks (less tax). In the aftermath of Kristallnacht he was also obliged to sell his art collection to the city for 2.3 million reichsmarks (again less tax) and to donate a further 25 per cent of his remaining assets to the Reich as an “atonement payment” (Göring’s characteristic device to make the Jews pay for the damage to property caused by Nazi vandalism). When Maximilian died in 1940 the rest of his property was confiscated. Five years later, when Allied bombers destroyed not only the house where he had spent his last days but also the old Fahrgasse office building and the old Stammhaus in the Börnestrasse, they were thus destroying relics which had ceased to belong to the Rothschilds. The pseudo-legal obliteration of the Rothschilds from the town of their origin preceded the partial physical obliteration by some years.23
It had not been difficult to foresee what the rise of Nazi
sm meant for the Rothschilds in Vienna—the city so inextricably associated in Hitler’s mind with the threat posed by Jewry. When the Duke of Windsor stayed with Eugène at Schloss Enzesfeld immediately after his abdication for the sake of Wallis Simpson, he is said to have discussed with his host the idea of a book about the persecution of the German Jews. Not long after that, Eugène left Austria for England, followed later by his eldest brother Alphonse. Louis elected to stay at the bank; but he took the precaution of transferring ownership of the Witkowitz ironworks to the Alliance Assurance company (in which the London house still had a controlling interest).24 He also transferred rights of disposal over all his Austrian assets to the New York bank of Kuhn, Loeb & Co. This was inadequate insurance. The day after the Austro-German Anschluss of March 11, 1938, as cheering crowds welcomed Hitler’s troops into Vienna, Louis attempted to leave the city. His passport was confiscated, and the next day he was arrested and taken to the Gestapo headquarters at the Hotel Metropol on Morzin-Platz (where he found himself rubbing shoulders with the former Austrian Chancellor, Kurt von Schuschnigg, whose attempts to appease Hitler had so disastrously failed, and the socialist leader Leopold Kuntschak). The process of confiscating Rothschild property began at once. SS men were seen looting artworks from Louis’s palace almost immediately after his arrest. On March 30 the firm of S. M. von Rothschild was placed under compulsory administration by a new Austrian Credit Institute for Public Enterprises and Works at the orders of the Vienna Gauleiter’s economic adviser Walter Rafelsberger, who was charged with the systematic confiscation of all Jewish assets in Austria. It was then put under the temporary control of the German firm of Merck, Finck & Co. and finally sold to them in October 1939.
The House of Rothschild Page 82
