The House of Rothschild

by Ferguson, Niall

19 A different version of the tea story runs: ”When the curtains were drawn, a powdered footman entered the room, followed by an underling with a tea trolley, and would query politely: ’Tea, coffee or a fresh peach, Sir?‘—’Tea, please.‘—’China, Indian or Ceylon, Sir?‘—’China, if you please.‘—’With lemon, milk or cream, Sir?‘—’Milk, please.‘—’Jersey, Hereford or Shorthorn, Sir?‘ “

  20 Ferdinand to Rosebery, undated, c. Sept. 1878: ”[M]y heart is so full that I must pour out some of its contents into your hearing.—Ill as I have been during the whole of my stay with you I assure you to have never felt more happy. I have so often told you that I am devoted to and fond of you that I will not repeat these expressions from fear of annoying and wearying you; but you will allow me to add, that since I have lived under your roof I have learnt to estimate your character more highly still than I did and that I am more devoted to and fonder of you than I ever was ... Pray don’t, as you threatened, withhold your trust from me in the future.—I assure you I am worthy of It.—I have had very few friends in my life, hardly any true ones, and it would grieve me beyond anything if I thought that when we meet there was no longer the free exchange of thought and feeling between us which has existed and on which I pride myself.—I am a lonely, suffering and occasionally a very miserable individual despite the gilded and marble rooms in which I live.—There is but one thing in the world, that I care for; and that is the sympathy and the confidence of the few persons whom I love. Believe me that I am neither low nor morbid nor even sentimental at this moment...“ See also same to same, Feb. 17, 1881: ”You know I love you more than any man in the world“; Nov. 7, 1882: ”I wish Parliament, the Cabinet and Politics at the bottom of the sea, as they have estranged you from me“; May 7, 1884: ”That I am ‘yours’ entirely you are aware of and if I am occasionally ’peculiar’ put it down to my nervous system and not to any other cause.“

  21 Of course, the business of gardening was done by small armies of servants: Nathaniel employed enough at Hohe Warte to start one of Austria’s first football clubs; Haldane joked that Ferdinand employed 208 at Waddesdon—almost certainly an exaggeration. In fact fifty gardeners were employed at Waddesdon and at Ascott, though there were a hundred at Grasse.

  22 The bequest was valued at £400,000.

  23 Interestingly, this was the first time an outsider had been allowed to work in such a capacity; a similar request from the Bleichröders had been turned down.

  24 Since the mid-1860s, the system of shared accounts had more or less broken down, so that balance sheets were being drawn up two years late, if at all.

  25 These withdrawals make it very hard to assess the actual profitability of the partnership in these years; certainly a bald statement of the capital account would understate total earnings.

  26 Ferdinand had no objection to entrusting his share entirely to Albert ”provided only that I don’t suffer any diminution of income.“

  27 On total capital of 359 million marks, the Frankfurt Rothschilds had a total income of just 12 million marks, implying a rate of return of just 3.3 per cent. Max and his sons did not try their hands at banking until after the First World War.

  28 The house in the Neue Mainzer Strasse was sold, the house on the Untermainkai became a library, and the house in the Zeil became an old people’s home.

  29 Fourteen if we include the marriage in 1910 between Edmond’s daughter Miriam and Albert von Goldschmidt-Rothschild, son of Wilhelm Carl’s daughter Minna and Max Goldschmidt.

  30 Inscribed on the wall of the mausoleum in Hebrew and English were the following lines:She opened her lips with wisdom

  And in her speech was the law of kindness

  My darling wife.

  If I ascend up into heaven

  Thou art there

  If I lie down in the grave

  Behold I find thee

  Even where thy hand leads me

  And thy right hand supports me.

  He also donated money to the tuberculosis hospital in Brompton Road and St George’s Hospital at Hyde Park Corner.

  31 A Bischoffsheim, a Cohen or a Morpurgo was considered suitable, but not a Sichel or a Davidson. The latter family’s reputation was badly damaged by the suicide of one of its members, which was evidently occasioned by his own bankruptcy

  32 John Sholto Douglas, the 9th Marquess of Queensberry, is best known as the father of Lord Alfred Douglas, the lover of Oscar Wilde. A “homophobe” avant la lettre and quite mad, Queensberry was convinced that Rosebery was drawing his eldest son Lord Drumlanrig (then Rosebery’s private secretary) into the homosexual milieu. In August 1893 he sought to confront Rosebery with a horsewhip at Bad Homburg, though he was dissuaded by the effectual combination of the police and the Prince of Wales. When Drumlanrig shot himself in October 1894, Queensberry was convinced he had committed suicide to avoid blackmail over his relations with Rosebery, whom he denounced as a “Snob Queer” and “that cur and Jew friend Liar Rosebery.” When Wilde took Queensberry to court for libel, a letter from Queensberry was read out in court which referred to Rosebery (and Gladstone); this made it more or less inevitable that Wilde would be prosecuted for homosexuality after the Queensberry trial, lest the government appeared to be protecting him. According to one account, Rosebery considered trying to help Wilde, but was told by Balfour: “If you do, you will lose the election.” The first trial of Wilde failed to reach a verdict; there would not have been a second, the Solicitor General Sir Frank Lockwood confided, “but for the abominable rumours against Rosebery.”

  33 Another unpleasant fantasist, Billing claimed that Rosebery’s son, along with Evelyn Achille de Rothschild, had encouraged his campaign against the supposed 47,000 “perverts” in the British establishment and, grotesquely, that both men had in fact been killed to silence them.

  34 The weakness of this identification lies in the absence of any allusion to religion.

  35 It was this money which helped finance Lord Carnarvon’s fateful 1922 expedition with Howard Carter to find the tomb of Tutankhamun.

  36 The Empress Elizabeth paid a visit to Ferdinand and Alice at Waddesdon in 1876, riding and dining with them. Ferdinand also held a ball in honour of Crown Prince Rudolf when he visited London two years later.

  37 Interestingly, Mayer Carl suspected Bleichröder of intending to convert to Christianity.

  38 According to the French ambassador George Louis in 1908, William II invited the Rothschilds to re-establish a house in Germany; this seems to have been a figment of the ambassador’s imagination.

  39 These ranged from large balls to routine levees and private games of whist.

  40 For example, Lionel gave a dinner in May 1865 attended by “the Duke of Cambridge and Colonel Mac- donald, Prince and Princess Edward of Saxe-Weimar, the Duke and Duchess of Manchester, the Duchess of Newcastle, Lord and Lady Proby, Lord Hartington, Lord Sefton [and] Lord Hamilton.” To Charlotte’s anger, the Duchess of Manchester did not reciprocate.

  41 Hence the lines in Iolanthe: “The shares are a penny and ever so many are taken by Rothschild and Baring; And just as a few are allotted to you, you awake with a shudder despairing.”

  42 Their friendship was close enough for the Prince to attend Ferdinand’s funeral.

  43 I owe this reference to Professor Stanley Weintraub. When Anthony died, the Queen wrote to her son: “You will be very sorry for poor Sir Anthony Rothschild who was so very kind and loyal and so fond of you and a good man.”

  44 Biddulph was master of the Queen’s household from 1851 and keeper of the privy purse from 1867. He had to withdraw his initial advice that a Jewish peer would be unable to take his seat in the Lords.

  45 Revealingly, she described Natty as “a handsome man, of about 38 or 40, with a fine type of Jewish countenance” when she met him for the first time (in his capacity as one of Disraeli’s executors).

  46 Alexander Baring had been created Baron Ashburton in 1835, Samuel Loyd (of the London and Westminster Bank) had been created
Baron Overstone in 1850 and George Glyn had subsequently been created Baron Wolverton.

  47 In fact the Queen continued to resist, but when Gladstone resubmitted his original list unaltered, she tacitly acquiesced.

  48 According to family legend she was told to get off a newly planted flower-bed. However, the Queen’s journal merely records that “Miss de Rothschild... most kindly purposely had the road widened to enable my donkey chair to go along it.”

  49 In 1835 Thomas Raikes had recorded a similar conversation, though this was probably an apocryphal story: “When Rothschild was at Vienna, and contracted for the last Austrian loan, the Emperor sent for him to express his satisfaction at the manner in which the bargain had been concluded. The Israelite replied: ‘Je peux assurer votre Majesté que la maison de Rothschild sera toujours enchantée de faire tout ce qui pourra être agréable à la maison d’ Autriche’ .”

  EIGHT Jewish Questions

  1 Interestingly, he did this only after Minna’s death.

  2 Gustave’s daughter Zoé married Baron Léon Lambert of the Belgian agency in 1882 and a year later her cousin Béatrice married Maurice Ephrussi, who was involved in the French Rothschilds’ oil business in Russia. In 1892, Gustave’s daughter Bertha Juliette married Baron Emmanuel Leonino; and in 1913 Edmond’s son James Armand (usually known as “Jimmy”) married Dorothy Pinto.

  3 Lionel Louis Cohen, Chairman of the organisation’s Executive Committee, was in practice the more important figure.

  4 Not all these charges went unchallenged. For example, Drumont was sued for alleging that a parliamentary deputy had taken bribes from Rothschild to pass a piece of legislation convenient to Banque de France.

  5 Edouard fought his duel, which was typically French in that neither party was killed. Robert’s challenge was not accepted because his antagonist, the comte de Lubersac, was declared too young to fight by his seconds.

  6 The figure is for all Jewish emigration in the period 1881-1914. On average 5,000 arrived every year in Britain between 1881 and 1905, though the majority did not stay, continuing on to the New World, principally the United States.

  7 It is striking that the Rothschilds specified in their foundation’s charter that “no condition regarding the religious denomination of any nominee for a professorship shall be attached to any of the Chairs, and in accordance with that, religious or confessional status shall not in any instance be grounds for exclusion in filling a Chair or a position in the research institution.” This was as prescient as it was—ultimately—inef- fective.

  8 100,000 francs to be invested to provide dowries for daughters of officials of the Chemin de Fer du Nord; 60,000 francs for the poor of Ferrières, Pontcarre and Lagny; 1,000 francs a year for public works in the same localities (implying a capital sum of around 25,000 francs); 250,000 francs to the Jewish hospital in the rue Picpus; and 200,000 francs to the Jewish Charities Commission.

  9 The “family council” was a typical figment of Herzl’s imagination: in many ways he exaggerated the Rothschilds’ power in much the same way as Drumont and the other anti-Semites. The Address was subsequently published as Der Judenstaat.

  NINE “On the Side of Imperialism” (1874-1885)

  1 The organisation of the Morgan group was indeed somewhat similar to that of the Rothschilds: it was a partnership between three houses, one in New York, one in Philadelphia and one in Paris. After J. P. Morgan’s reorganisation in 1895 these were called: J. P. Morgan, Drexel & Co. and Morgan, Harjes. The London house (J. S. Morgan until 1910 when it became Morgan Grenfell) was always run separately.

  2 There is some reason to doubt them. In 1906 Leo told his Paris cousins: “We ourselves discounted £28,000,000 of bills this year, of which £12,000,000 have been for your account.” That figure would have made Rothschilds by far the biggest bill-broker in the London market.

  3 Gross direct plus portfolio investment in the period 1990-95 was just under 12 per cent of GDP

  4 This total includes a small number (nine) of substantial loans—totalling £526 million—which were issued jointly with other non-Rothschild banks, mainly Barings but also J. S. Morgan and, in one instance, Schröders.

  5 The title of Khedive was purchased from the Sultan by Ismail in 1867 in return for an increase in the Egyptian tribute to Constantinople from around £337,000 to £682,000.

  6 According to the concessions granted in 1854 and 1856, the Khedive Said was given preference shares in Lesseps’s Compagnie Universelle du Canal Maritime de Suez, the interest on which accounted for 15 per cent of its net profits. The Khedive also bought 96,517 ordinary shares in the first subscription, just under a quarter of the total, for which he paid £3.56 million (largely in 10 per cent treasury bills); and his nephew Ismail took up a further 85,606 shares on becoming Khedive in 1863 (though some of the total of 182,123 shares must subsequently have been sold, as only 176,602 were available for sale in 1875). On all these shares, the Khedive was supposedly entitled to a minimum 5 per cent dividend. In return, the Company was given a strip of land rather wider than was needed for the canal itself, exemption from tax and (under a secret annexe to the second concession) free forced labour for the completion of the canal. Moreover, as a result of legal action taken by the Company against the Khedive, he had to pay it a further £3.36 million; to raise the money, he had to mortgage his share coupons for twenty-five years. By 1875 the Egyptian Treasury had paid £16 million for the construction of the canal and had borrowed £35.4 million at rates ranging from 12 to 27 per cent.

  7 It was originally intended that only half the coupons due on external debts would be redeemed in cash, the remainder to be paid in bonds carrying 5 per cent interest that would mature five years later; within three months even this was abandoned.

  8 The figure was slightly less than £4 million because the Khedive’s shareholding turned out to be slightly smaller than stated in the contract (176,602 instead of 177,642). This constituted a 44 per cent shareholding; the remaining 56 per cent was largely in French hands.

  9 This seems unlikely. It is true that no correspondence exists to indicate that Alphonse knew of the transaction before it became public on November 25. But Lionel could not have raised the money without the assistance of the Paris house. The possibility cannot be ruled out that there was telegraphic communication, the records of which have not survived.

  10 In strictly financial terms, that was the moment to sell. However, it was not until 1979 that the government sold the shares, by which time they had fallen in value to £22 million, in real terms rather less than their original purchase price.

  11 Nor could the French complain that they had been wholly excluded from the profits of Egyptian insolvency: the Credit Foncier did acquire the Khedive’s rights to 15 per cent of the Canal’s revenues for 22 million francs in 1880.

  12 It is possible that the French house took a share in this loan; however, Alphonse’s letters make it clear that he supported Disraeli’s policy

  13 In fact, Lionel had intimated to Disraeli that he would not give Russia financial assistance as early as October the year before.

  14 “Turkish as I have always been, I am astonished at the Turkish feeling everywhere.”

  15 The total debt was reduced from 237 million to 142 million Turkish pounds and the annual charges from 15 to just 3 million—i.e. from 6 per cent to just 2 per cent of the capital sum. This was a generous if realistic settlement.

  16 By 1914, Germans held 22 per cent of the Ottoman public debt, compared with figures of 63 per cent for France and 15 per cent for Britain.

  17 Baring had been a member of the board of the Caisse since 1877 and served as one of the Anglo-French Comptrollers in 1879. After a brief tour of duty in India, he had returned to Egypt in 1881 to become consul-general. With the abolition of dual control in 1883. financial power was effectively transferred to him as British Agent, a post he retained until 1907.

  18 The surviving balance sheets indicate substantial holdings of Egyptian paper, e.g. £
144,348 of Suez Canal shares in 1886.

  TEN Party Politics

  1 Disraeli was created Earl of Beaconsfield in 1876, but he will continue to be referred to as “Disraeli” to avoid confusion.

  2 Emma requested that Gladstone send her, by way of “remembrance,” “a little chip when you remove a branch from one of your beautiful trees.”

  3 Most of the documents detailing Disraeli’s financial dealings with the Rothschilds were apparently destroyed when he died, so it may be that they assisted him in more ways than this account suggests.

  4 Other regular visitors included Henry Calcraft (twenty visits), Permanent Secretary to the Board of Trade, the banker Horace Farquhar, the Austrian diplomat Albert Mensdorff and the Russian ambassador Baron de Staal.

  5 Harcourt’s Ground Game Act had given tenants equal rights with landowners to kill ground game and was much resented by dedicated hunters like the Rothschilds.

  6 It is impossible to establish the details of this extraordinary affair because “papers in the case were put away in the drawer of the Secretary’s cupboard.”

  7 As Bouvier notes, the Rothschilds now shared the spoils of government bond issues with an elite of joint-stock banks: the Credit Lyonnais, the Société Générale, the Comptoir d’Escompte and Paribas.

  ELEVEN The Risks and Returns of Empire (1885-1902)

  1 Revelstoke had in fact been a guest at Tring in February 1890: “It is rather amusing to see the heads of the two great rival financial Houses together,” noted Edward Hamilton. “They take stock of each other with jealous eyes, the jealousy being somewhat ill-disguised.”

  2 As usual, the Rothschilds charged a fee and costs amounting to £6,000, though in fact the money does nor even seem to have crossed the Channel.

  3 The other members were Walter Burns of J. S. Morgan, Everard Hambro, Charles Goschen of the Bank of England, Herbert Gibbs; George Drabble of the Bank of London and the River Plate. There was also a French representative (Cahen d‘Anvers) and a German (Hansemann). The committee met regularly until December 1897.