CHAPTER XVI.

Sketch of the Life of Rothschild.—Comes to England.—Introduction of Foreign Loans.—Large Purchases.—Anecdotes concerning Rothschild.—His Difficulties and Annoyances.—His Death and Burial.—Last Crisis on the Stock Exchange.

The eminent abilities of Nathan Meyer Rothschild were inherited from his father, who, educated for the synagogue, distinguished himself as a financier, and, though engaged in the uncongenial sphere of a counting-house, became a learned archæologist. Frankfort, Berlin, Vienna, London, Naples, and Paris, have alike witnessed the prescience of the money-making Rothschilds; and it is reported that the first great success of Meyer Anselm, the father of the house, originated in the possession of the fortune of the Landgrave of Hesse Cassel, which he saved from the grasp of Napoleon, and which must have been to a commercial man of the utmost importance.[7]

By his own report, Nathan Meyer Rothschild came to Manchester because Frankfort was too small for the operations of the brothers, although the immediate cause was some offence to a customer; and it is characteristic of the intrepidity of the man, that, with scarcely any hesitation, and with an absolute ignorance of the English language, he came to the country in which he realized such great results. On Tuesday he told his father he would go to England, and on Thursday he started. With £20,000 he commenced his career; and in a short time his capital was trebled. At Manchester he soon saw there were three profits to be made,—in the raw material, the dyeing, and the manufacturing. It needhardly be added, that his great mind had stomach for them all, and that, having secured the three, he sold goods cheaper than any one else. This was the foundation of that colossal fortune which afterwards passed into a proverb; and, in 1800, finding Manchester too small for the mind which could grapple with three profits, Rothschild came to London. It was the period when such a man was sure to make progress, as, clear and comprehensive in his commercial views, he was also rapid and decisive in working out the ideas which presented themselves. Business was plentiful; the entire Continent formed our customers; and Rothschild reaped a rich reward.

From bargain to bargain, from profit to profit, the Hebrew financier went on, and prospered. Gifted with a fine perception, he never hesitated in action. Having bought some bills of the Duke of Wellington at a discount, to the payment of which the faith of the state was pledged, his next operation was to buy the gold which was necessary to pay them, and when he had purchased it, was, as he expected, informed that “government required it.” Government had it, but doubtless paid for the accommodation. “It was the best business I ever did!” he exclaimed triumphantly; and he added, that, when the government had got it, it was of no service to them until he had undertaken to convey it to Portugal.

In 1812, Meyer Anselm, the head of the house, died at Frankfort. A princely inheritance, unbounded credit, and solemn advice never to separate, were left to his four sons. From this period, Nathan Meyer Rothschild was regarded as the head, though not the elder of the family; and skilfully did he support and spread the credit of the name. Previous to the advent of Mr. Rothschild, foreign loans were somewhat unpopular in England, as the interest was receivable abroad, subject to the rate of exchange liable to foreign caprice, and payable in foreign coin. He introduced the payment of the dividends in England, and fixed it in sterling money, one great cause of the success of these loans in 1825.

Although Mr. Rothschild was commonly termed a merchant, his most important transactions were in connection with the Stock Exchange. It was here that his great decision, his skilful combinations, and his unequalled energy, made him remarkable. At a time when the funds were constantly varying, the temptation was too great for a capitalist like Mr. Rothschild to withstand. His operations were soon noticed; and when the money-market was left without an acknowledged head by the deaths of Sir Francis Baring and Abraham Goldsmid,—for the affairs of the latter were wound up, and the successors of the former did not aim at the autocracy of the money-market,—the name of Nathan Meyer Rothschild was in the mouths of all city men as a prodigy of success. Cautiously, however, did the capitalist proceed, until he had made a fortune as great as his future reputation. He revived all the arts of an older period. He employed brokers to depress or raise the market for his benefit, and is said in one day to have purchased to the extent of four millions.

The name of Rothschild as contractor for an English loan made its first public appearance in 1819. But the twelve millions for which he then became responsible went to a discount; it was said, however, that Mr. Rothschild had relieved himself from all liability before the calamitycould reach him. From this year his transactions pervaded the entire globe. The Old and the New World alike bore witness to his skill; and with the profits on a single loan he purchased an estate which cost £150,000. Minor capitalists, like parasitical plants, clung to him, and were always ready to advance their money in speculations at his bidding. Nothing seemed too gigantic for his grasp; nothing too minute for his notice. His mind was as capable of contracting a loan for millions, as of calculating the lowest possible amount on which a clerk could exist. Like too many great merchants, whose profits were counted by thousands, he paid his assistants the smallest amount for which he could procure them. He became the high-priest of the temple of Janus; and the coupons raised by the capitalist for a despotic state were more than a match for the cannon of the revolutionist.[8]From most of the speculations of 1824 and 1825, Mr. Rothschild kept wisely aloof. The Alliance Life and Fire Assurance Company, which owes its origin to this period, was however, produced under his auspices; and its great success is a proof of his forethought. None of the loans with which he was connected were ever repudiated; and when the crash of that sad period came, the great Hebrew looked coolly and calmly on, and congratulated himself on his caution. At his counting-house a fair price might be procured for any amount of stock which, at a critical time, would have depressed the public market; and it was no uncommon circumstance for brokers to apply at the office of Mr. Rothschild, instead of going in the Stock Exchange.

He was, however, occasionally surpassed in cunning, and, on one occasion, a great banker lent Rothschild a million and a half on the security of consols, the price of which was then eighty-four. The terms on which the money was lent were simple. If the price reached seventy-four, the banker might claim the stock at seventy; but Rothschild felt satisfied that, with so large a sum out of the market, the bargain was tolerably safe. The banker, however, as much a Jew as Rothschild, had a plan of his own. He immediately began selling the consols received from the latter, together with a similar amount in his own possession. The funds dropped; the Stock Exchange grew alarmed; other circumstances tended to depress it; the fatal price of seventy-four was reached; and the Christian banker had the satisfaction of outwitting the Hebrew loan-monger.

But, if sometimes outwitted himself, there is little doubt he made others pay for it; and, on one occasion, it is reported that his finesse proved too great for the authorities of the Bank of England. Mr. Rothschild was in want of bullion, and went to the governor to procure on loan a portion of the superfluous store. His wishes were met, the terms were agreed on, the period was named for its return, and the affair finished for the time. The gold was used by the financier, his end was answered, and the day arrived on which he was to return the borrowed metal. Punctual to the time appointed, Mr. Rothschild entered; and those who remember hispersonal appearance may imagine the cunning twinkle of his small, quick eye, as, ushered into the presence of the governor, he handed the borrowed amount in bank-notes. He was reminded of his agreement, and the necessity for bullion was urged. His reply was worthy a commercial Talleyrand. “Very well, gentlemen. Give me the notes! I dare say your cashier will honor them with gold from your vaults, and then I can return you bullion.” To such a speech the only worthy reply was a scornful silence.

One cause of his success was the secrecy with which he shrouded all his transactions, and the tortuous policy with which he misled those the most who watched him the keenest. If he possessed news calculated to make the funds rise, he would commission the broker who acted on his behalf to sell half a million. The shoal of men who usually follow the movements of others, sold with him. The news soon passed through Capel Court that Rothschild was bearing the market, and the funds fell. Men looked doubtingly at one another, a general panic spread, bad news was looked for, and these united agencies sunk the price two or three per cent. This was the result expected; and other brokers, not usually employed by him, bought all they could at the reduced rate. By the time this was accomplished, the good news had arrived, the pressure ceased, the funds arose instantly, and Mr. Rothschild reaped his reward.[9]

But it was not an unvaried sunshine with this gentleman. There were periods when his gigantic capital seemed likely to be scattered to the four quarters of the globe. He lost half a million in one English operation; when the French entered Spain in 1823, he was also in the utmost jeopardy; but, perhaps, the most perilous position in which he was placed was with the Polignac loan, although his vast intelligence again saved him, and placed the burden on the shoulders of others. With this, however, he suffered greatly, as the price fell thirty per cent.

He had, also, other sources of apprehension. Threats of murder were not unfrequent. On one occasion, he was waited on by a stranger, who informed him that a plot had been formed to take his life; that the loans which he had made to Austria, and his connection with governments adverse to the liberties of Europe, had marked him for assassination; and that the mode by which he was to lose his life was arranged. But though Rothschild smiled outwardly at this and similar threats, they said, who knew him best, that his mind was often troubled by these remembrances, and that they haunted him at moments when he would willingly have forgotten them. Occasionally his fears took a ludicrous form. Two tall, mustachioed men were once shown into his counting-house. Mr. Rothschild bowed, the visitors bowed, and their hands wandered first in one pocket, and then in another. To the anxious eye of the millionnaire, they assumed the form of persons searching for deadly weapons. No time seemed allowed for thought; a leger, without a moment’s warning, was hurled at the intruders; and, in a paroxysm of fear, he called forassistance, to drive out two customers, who were only feeling in their pockets for letters of introduction. There is no doubt that he dreaded assassination greatly. “You must be a happy man, Mr. Rothschild,” said a gentleman who was sharing the hospitality of his splendid home, as he glanced at the superb appointments of the mansion. “Happy! me happy!” was the reply. “What! happy when, just as you are going to dine, you have a letter placed in your hands, saying, ‘If you do not send me £500, I will blow your brains out!’ Happy! me happy!” And the fact, that he frequently slept with loaded pistols by his side, is an indirect evidence of a constant excitement on the subject.

The name of this gentleman, the entertainments given by him, the charities to which he occasionally subscribed, and the amount of his transactions in the money-markets were blazoned abroad. Peers and princes of the blood sat at his table; clergymen and laymen bowed before him; and they who preached loudest against mammon bent lowest before the mammon-worshipper. Gorgeous plate, fine furniture, an establishment such as many a noble of Norman descent would envy, graced his entertainments. Without social refinement, with manners which, offensive in the million, were butbrusquein the millionnaire, he collected around him the fastidious members of the most fastidious aristocracy in the world. He saw the representatives of all the states in Europe proud of his friendship. By the democratic envoy of the New World, by the ambassador of the imperial Russ, was his hospitality alike accepted; while the man who warred with slavery in all its forms and phases was himself slave to the golden reputation of the Hebrew. The language which Mr. Rothschild could use when his anger overbalanced his discretion, was a license allowed to his wealth; and he who, when placed in a position which almost compelled him to subscribe to a pressing charity, could exclaim, “Here, write a check,—I have made one —— fool of myself!” was courted and caressed by the clergy, was fêted and flattered by the peer, was treated as an equal by the first minister of the crown, and more than worshipped by those whose names stood foremost on the roll of a commercial aristocracy. His mode of dictating letters was characteristic of a mind entirely absorbed in money-making; and his ravings, when he found a bill unexpectedly protested, were translated into mercantile language ere they were fit to meet a correspondent’s eye. It is painful to write thus depreciatingly of a man who possessed so large a development of brain; but the golden gods of England have many idolaters, and the voice of truth rarely penetrates the private room of the English merchant. Mr. Rothschild’s was a character which may be serviceably held up as a warning. There was, however, an occasional gleam of humor in him, sternly as his thoughts were devoted to heaping up riches. “I am as much as you,” he said to the Duc de Montmorenci, when his title was granted; “you style yourself the first Christian baron, and I am the first Jew baron.”

He was a mark for the satirists of the day. His huge and somewhat slovenly appearance; the lounging attitude he assumed as he leaned against his pillar in the Royal Exchange; his rough and rugged speech; his foreign accent and idiom,—made caricature mark him as its own;while even caricature lost all power over a subject which defied its utmost skill. His person was made an object of ridicule; but his form and features were from God: his mind and manners were fashioned by circumstances; his acts alone are public property; and by these we have a right to judge. No great benevolence lit up his path; no great charity is related of him. The press, ever ready to chronicle liberal deeds, was almost silent upon the point; and the fine feeling which marked the path of an Abraham Goldsmid, and which brightens the career of many of the same creed, is unrecorded by the power which alone could give it publicity. Dr. Herschel, indeed, said that Mr. Rothschild had placed some thousands in his hands for the benefit of his poorer brethren; but thousands spent in a career of thirty-five years, by one who counted his gains in millions, assume a narrow form. The Jewish code prescribed a tithe; but Jewish laws are often abrogated, when Jewish ceremonies are closely followed.

At last the time arrived which proves a millionnaire to be a man. Mr. Rothschild’s affairs called him to Frankfort, and he was seized with his last illness. The profession there could do nothing for him, and, scarcely even as a last hope, Mr. Travers, the eminent surgeon, made a rapid journey to see if English science could avail the dying Crœsus. The effort was vain, and the inevitable fate was well and worthily met. There appears even a certain degree of dignity in his resignation to the last struggle, and something touchingly manful in the wording of the will which was to surrender to others the gold won by the sweat of his brain. Breathing an almost patriarchal simplicity, it recommends his sons to undertake no great transaction without the advice of their mother, of whom he speaks with tender and even touching affection. “It is my special wish that my sons shall not engage in any transaction of moment, without having previously asked her maternal advice.”

The first intelligence of his death was received by the same method which had so often contributed to his success. Beneath the wings of a pigeon, shot in sport at Brighton, were discovered the words “il est mort.” The intelligence created an intense sensation, as the uninitiated were ignorant that his illness was dangerous, and calculations were plentiful as to the amount of his fortune. A greater tumult than had been produced since the violent death of his predecessor, marked the precincts of the Stock Exchange, as it was impossible to tell the tendency of his speculations, or what effect might be produced by his unexpected demise.[10]

His remains were brought to England. The Austrian, Russian, Prussian, Neapolitan, and Portuguese ambassadors assisted at his funeral; and his sons, who were deeply affected, attended him to his last resting-place. The coffin which contained his massive remains was elaborately carved and gorgeously ornamented, looking like some splendid piece of man’scunning, destined for the boudoir of a lady, rather than the damp of the grave.

His children inherit his business; but they do not inherit his position in the stock-market. They are competitors for government loans; but, though with the name remains a certainprestigeof its former power, they do not appear willing to entertain the extensive and complicated business in the funds in which their father delighted.

The few anecdotes recorded of the gentleman whose life has been so imperfectly sketched, form a portion of many which have been carefully collected. A good life of Nathan Meyer Rothschild would be, to some future Tooke, a complete and perfect key to the financial history of the early portion of the nineteenth century.[11]

The last crisis in the Stock Exchange which it is the writer’s purpose to record was that memorable era, in 1836, when a convulsion—scarcely equalled in degree, though limited in its extent—made bears and bulls alike bankrupts.

For many years previous, the business of Capel Court had been decreasing. The attempts made to excite public feeling were insufficient to produce much result. Consols remained without those great and sudden movements so beneficial to the members; little was done in shares; and it was remarked that the Stock Exchange had become a monetary dead sea; that the carriage seemed likely to be exchanged for the wheelbarrow; the breaking of credit for the breaking of stones; and that, when the eagle eye of the hungry broker and jobber looked round for dupes, all was barren.

At length the spell was broken. The attempt of Don Pedro to seize the crown of Portugal afforded the members an opportunity of exercising their vocation; and it has been confidently said, that, long before a loan was attempted, their money was employed in assisting the above expedition. Every art was used to blacken the character of Don Miguel. Every trick was attempted to excite sympathy for Don Pedro. Private memoirs were published, and anecdotes related. Truths were distorted, and falsehood not unfrequently perpetrated. Paragraphs made their constant appearance, in which “our ancient ally” was represented as suffering from a most intolerable tyranny. Unbearable torture and insufferable trials were the lot of the Portuguese people; darkness and dungeons the doom of the aristocracy. The Tagus was red with the blood of the populace; and the “tower of Belem,” said a writer in Fraser’s Magazine, “emitted more doubtful and indescribable sounds than its predecessor of Babel.”

All these things tended to prepare the mind of the English capitalist. But a further temptation was offered. The revenues of the kingdom were portrayed in glowing colors. It was said that Don Miguel could, but would not, pay the interest of the existing debt, and that Don Pedro could and would. The scheme proved thoroughly successful. The note of expectation being thus sounded, a band of men was engaged, vessels were hired, and, with the aid of English money, English men, and English ships, Oporto was taken. The public mind was now ripe for a loan.The success was magnified, the achievement enlarged on, and £800,000 were demanded on the security of some port-wine. The money was lent; Don Miguel fled to Rome; and the young queen was installed in his place. A further loan of two millions followed; the interest was difficult to pay, the dividends were capitalized, and great excitement pervaded the Stock Exchange at the rumors which were currently circulated.

But another important movement was going on in connection with loans to Spain. The principal powers of Europe had agreed that Spain and Portugal should assist each other in the expulsion from their respective territories of Don Carlos and Don Miguel, and that the other courts should assist the belligerent parties. From this treaty arose an auxiliary force raised in England to assist the youthful queen of Spain, and “The British Legion” is yet named with derision. From the courts and from the alleys of St. Giles’s, from the town jail and from the rural workhouse, came half-clad, wretched, and miserable beings, who preferred being shot to being starved. Efforts to gain commissions were made by as motley a crew. Youths from the counting-house and from the shop were assiduous in endeavouring to attain them. Gentlemen with small incomes and no knowledge of war put forward their pretensions; and the officers were, in their way, a match for the men.

With all these disadvantages, the legion secured the success of the cause for which it fought; and, after a series of battles, Don Carlos was compelled to fly from the territory. A loan of course became advisable; and, although the interest on the previous debt could not be paid, it was proposed to advance an additional four millions. It need scarcely be said that, to procure this, promises were as plentiful as ever. The property of the Church was to be confiscated, and the Church itself to be upset, rather than not remunerate the bondholder. By means of deferred stocks, active stocks, and passive stocks, bargains were concluded, and, for a time, all was excitement in the foreign market. Every kind of security became sought for; however worthless, it had a price; however valueless, it found a buyer; and the debts of states which had never paid one dividend, which were scarcely in existence, and which had not any revenue, advanced 100 per cent.

But the market became overloaded, and holders began to realize. Every packet from abroad bore foreign securities, and the price drooped. During the fever, Spanish Cortes stock, which in 1833 was 16½, was forced to 72. Portuguese was done at 102, and every foreign stock rose in proportion.

By May, 1835, the market became overloaded; all were sellers; the price drooped; and on the 21st the panic commenced. Spanish stock fell at once sixteen per cent.; the scrip went to three discount; and the lower the price, the more anxious were the holders to sell. Every one grew alarmed; and those who had bought as a permanent investment parted with all their interest. Private gentlemen, who had been tempted to buy, hurried with heavy hearts to their brokers; and the Stock Exchange may be said to have groaned beneath the burden.

To add to the distress, the greatest holder turned bear; and it is difficult to describe the confusion with which the market closed on the eveningof the 21st of May. Some were rejoicing at their deliverance, though suffering a large loss, while others were absolutely ruined. In many panics there had been hope. They were known to be alarms which time would rectify; but there was no hope for the holder of foreign stock; it was worthless, and it was known to be worthless. Every one felt assured that no dividend would ever be paid upon it; and when this was remembered, men cursed the fatuity which had led them to buy waste-paper, and execrated the greediness which had lured them to ruin. Those who the week before possessed securities which would have realized hundreds of thousands, were reduced to bankruptcy. Brokers who had kept to their legitimate business were defaulters; most who had bought for time were unable to pay their differences; while respectable men, who had laughed at speculation, and thought themselves too clever to be taken in by companies, had ventured their all on the faith of foreign governments. Establishments were reduced, families were ruined, delicately-nurtured women were compelled to earn their bread. Death ensued to some from the shock, misery was the lot of others, and frantic confusion once more marked the alleys and the neighbourhood of Capel Court. Consternation reigned paramount, and almost every third man was a defaulter. All foreign securities were without a price; the bankers refused to advance money; the brokers’ checks were first doubted, and then rejected; nothing but bank-notes would be taken; and, with a desperation which will never be forgotten, the jobbers closed their books, refused to transact any business, and waited the result in almost abject despair. The stocks bore no price, the brokers ceased to issue their lists, and the blackboard was found inadequate to contain the names. Differences to the amount of ten millions were declared; and the entire wall would have been insufficient to contain the names. The practice was, therefore, dispensed with, and an additional time allowed to settle the accounts.

To mitigate the evil, the principal holders of foreign securities formed themselves into a society to purchase all stock below forty; but it was found inadequate to meet the catastrophe in the house, while out of it the excitement in Spanish, Portuguese, and other foreign funds created evils which never met the public eye, but which are yet felt by innumerable private families.

During this period, the Royal Exchange, previous to the assembling of the merchants, witnessed a curious scene, and beheld a motley group of speculators; and, says Mr. Evans, in his work on the city, such was the rage for shares in companies which had arisen out of the general excitement, that the beadle was obliged to drive them away, as the frequenters of ’Change could not get to their places. In the height of this speculation, some of the dabblers made a price of one farthing per share on a railway now promising to be the first in the kingdom, but of which there were then no buyers.

With the above panic the present chronicle of the Stock Exchange closes. To have brought it to 1849 would have involved living men and their actions, and to some future historian must be left the many whose names assume so important a position in English financial history.

FOOTNOTES:[7]“The prince of Hesse Cassel,” said Rothschild, “gave my father his money. There was no time to be lost; he sent it to me. I had £600,000 arrive unexpectedly by post; and I put it to such good use, that the prince made me a present of all his wine and linen.”[8]In 1824, it was said that public attention was so entirely absorbed by financial operations, that the movements of Mr. Rothschild and a few London capitalists excited an intensity of expectation scarcely inferior to the march of armies.[9]The intelligence of this gentleman was so good, that he was the first to announce the Paris revolution of July to Lord Aberdeen, and the victory of Waterloo was known to him some days before it was made public.[10]Mr. Salomons attributed the difficulties which followed his death to the sudden withdrawal of the dexterity with which he managed the exchanges, as Mr. Rothschild prided himself on distributing his immense resources, so that no operation of his should abstract long the bullion from the Bank.[11]For a Memoir of Rothschild, see the Bankers’ Magazine, Vol. II. p. 473,et seq.

[7]“The prince of Hesse Cassel,” said Rothschild, “gave my father his money. There was no time to be lost; he sent it to me. I had £600,000 arrive unexpectedly by post; and I put it to such good use, that the prince made me a present of all his wine and linen.”

[8]In 1824, it was said that public attention was so entirely absorbed by financial operations, that the movements of Mr. Rothschild and a few London capitalists excited an intensity of expectation scarcely inferior to the march of armies.

[9]The intelligence of this gentleman was so good, that he was the first to announce the Paris revolution of July to Lord Aberdeen, and the victory of Waterloo was known to him some days before it was made public.

[10]Mr. Salomons attributed the difficulties which followed his death to the sudden withdrawal of the dexterity with which he managed the exchanges, as Mr. Rothschild prided himself on distributing his immense resources, so that no operation of his should abstract long the bullion from the Bank.

[11]For a Memoir of Rothschild, see the Bankers’ Magazine, Vol. II. p. 473,et seq.

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