CHAPTER XXXVIII.THE ROTHSCHILDS.
The Beginning of the Financial Career of the Great House of Rothschild.—The Hessian Blood Money was the Great Foundation of their Fortune.—How the Firm of the Five Original Brothers was Constituted.—Nathan the Greatest Speculator of the Family.—His Career in Great Britain, and How He Misrepresented the Result of the “Battle of Waterloo” for Speculative Purposes.—Creating a Panic on the London Stock Exchange—His Terror of Being Assassinated.—His Death Causes a Panic on the London Exchange and the Bourses.
As the Rothschilds have indirectly made an immense amount of money in Wall Street from time to time, a sketch of the famous house and its methods of doing business will be of interest in this volume. The house is represented in America by Mr. August Belmont, than whom there is no banker more widely known and more highly regarded all the world over. It is due to the wise and conservative management of Mr. Belmont that the famous Rothschilds have reaped millions of profits from American sources. The original name of Rothschild was Bauer. The family adopted the name Rothschild (Red Shield) from the sign which the founder of the house kept over his dingy little shop in Frankfort-on-the-Main, in the odoriferous quarter called the Judengasse (Jews’ street). In this little shop Mayer Anselm Rothschild, the founder of the house, discounted bills, changed money, examined the quality of coins, bought cheap and sold dear. “How do you get so rich, Mr. Rothschild?” said a friend of his to old Anselm one day, as he leaned over his dusky little counter. The original head of the great house said: “I buys ‘sheep’ and sells ‘deer.’” His knowledge of the quality of coins was marvellous. He could detect a lightcoin the moment he took it in his hand, and there was no imitation diamond or gem could escape his eye. He had the instinct of genius in detecting everything in the form of money or jewelry that was not genuine. He was a walking directory so far as the financial standing of every commercial man in Frankfort and in several other important cities in Germany was concerned. At the age of seventeen young Rothschild took rank with the best, oldest and ablest financiers of Frankfort. His father, who died when Mayer Anselm was thirteen years of age, had intended to make him a Rabbi, but the coin had such attraction for him, that it quickly drew him from the Talmud, and he established himself in his father’s narrow quarters as a financier.
It is not generally known that Rothschild’s first great start in financial life was given to him by the use of the twenty million dollars which was paid to the Landgrave of Hesse, Frederic II., by George III. of England, for 17,000 Hessians to help to whip George Washington and retain the American Colonies. This blood money was the original basis of the vast fortune of the Rothschilds. It was deposited with Mayer Anselm by William IX., the successor of Frederic, whose example was followed by other great ones of the earth, and in a few years the agents of the kings and princes of Europe were flocking to Frankfort to negotiate loans with Rothschild on behalf of their mighty patrons.
There is a very interesting story related, giving the reason why the Landgrave passed by all the great bankers of Frankfort and entrusted this large amount, together with a similar amount afterwards, to Rothschild. The latter had occasion to visit Prince William at his palace in Cassel, and found him playing a game of chess with Baron Estorff. Rothschild prudently kept quiet and did not interrupt the game, but stepped lightly up and stood behind the prince’s chair, where he could watch every move. The Prince was getting the worst of the game, and was becoming a little excited. Turning around, he said: “Rothschild, do you understand chess?” “Sufficientlywell, your Serene Highness,” replied Rothschild, “to induce me, were the game mine, to castle on the king’s side.” The Prince took the hint, and won the game. Then turning to Rothschild, he said: “You are a wise man. He who can extricate a chess player from such a difficulty as I was in, must have a very clear head for business.”
The Prince afterwards told the Baron that Rothschild was as good a chess player as Frederic the Great, and that a man of such capacity must be able to take good care of money. The forty millions which were obtained on deposit remained with the house of Rothschild for nine years, and when Napoleon invaded Germany in the interim, the money, together with other valuables, was hidden in wine casks in Rothschild’s cellar, but the Conqueror never thought of tapping the casks. After peace was proclaimed, and William, who had been obliged to seek safety in flight, returned home, old Rothschild was dead, but his son Anselm handed over to the Prince every dollar of the forty millions, and tendered him in addition two per cent. interest for the entire time of the deposit. The Prince made him a present of the interest.
The elder Rothschild had five sons, namely: Anselm, who succeeded his father in Frankfort; Solomon, of Vienna; Nathan Mayer, of London; Charles, of Naples; and James, of Paris. According to their father’s will, the five sons were to constitute but one firm, in which they were to enjoy equal profits, and never divide the fortune. The business was to be managed at Frankfort as headquarters, to which great money centre all the profits from the other moneyed capitals were to be raked in. The intention of the old man was to make these five money kings dominate Europe by the power of their wealth, so that the ordinary kings would become their subjects, and in many instances the hopes of the great old chess player have been realized. All the annual settlements were made at Frankfort, and the brothers met there at least once a year for a general conference.This system continues, and though the original five brothers have all passed over to the majority, the last of them, James, having died in Paris in 1868, at the ripe age of 76, yet the representatives of the house in the large cities of Europe sustain the principles of union, harmony and consolidation laid down by old Anselm Mayer Rothschild. Although this union has been the great source of the Rothschilds’ success, it would be hopeless, however, for any other parent outside the Hebrew race to imitate the injunction of old Rothschild. The idea of an equal division of the profits could not be entertained for a moment by an American. The socialistic family tie that enjoined such an arrangement could only be rendered binding through the power of the Hebrew religion. Just imagine how an American would feel if by some lucky turn of fortune, like that of Nathan Rothschild in London, after the battle of Waterloo, he should make six millions in a day, and be requested to divide it with his four brothers! He would sooner spend a million of it to try and break the old man’s will, and employ several of the best sophistical lawyers he could find to prove that his father was demented.
It is supposed that the elder Rothschild died worth 15 or 20 millions, but this is in a great measure merely conjecture, as nobody outside the family ever knew what their real wealth was, this fact having always been kept an inviolate family secret. It must be said, to the credit of the old man, that in his latter days, instead of becoming stingy, as many do, he was quite liberal, and, according to the scriptural injunction, distributed his alms in secret, without even permitting his sons to know anything about the matter. He contributed largely to various charities in the same way. It is said he would go through the poverty-stricken districts of the city after night, giving money to the needy, from whom he would retreat before giving them time to thank him for his beneficence. He had a notion that those who gave without receiving thanks were greater favorites with the Divine Being, who rules the destinies of man.
From Harper’s Magazine. Copyright, 1873, by Harper & Brothers.NATHAN MAYER ROTHSCHILD.(The Financial Hero of Waterloo.)
From Harper’s Magazine. Copyright, 1873, by Harper & Brothers.NATHAN MAYER ROTHSCHILD.(The Financial Hero of Waterloo.)
From Harper’s Magazine. Copyright, 1873, by Harper & Brothers.NATHAN MAYER ROTHSCHILD.(The Financial Hero of Waterloo.)
The greatest speculator of the five brothers was Nathan Mayer Rothschild, the third son of the great old man. He made the grand hit of his life after the battle of Waterloo. He kept watching the movements of the opposing armies on the Continent, and followed Wellington very closely as he approached the famous field. It seems that the Iron Duke was not at all pleased with Nathan’s attention to him, as he took him for either a spy or an assassin, and was on the point of having him arrested several times. But Nathan kept his purpose steadily in view, in spite of the fact that bullets were whizzing around his ears in showers. He sat on his horse on the hill of Hougomont with perfect composure in the teeming rain the whole afternoon, looking upon that terrible struggle that was to decide the destiny of nations, until Blucher arrived and the French were put to route.
As soon as Nathan saw this he put spurs to his steed and made all possible haste to Brussels, where a carriage with swift horses was in waiting to carry him to Ostend. At day light next morning he arrived on the Belgian coast, where he found it exceedingly difficult to obtain a boat, the sea being very rough. At length he obtained a boatman as courageous as himself, who undertook the task for 2,500 francs, and landed him at Dover in the evening. He lost no time, but with relays of the swiftest horses pushed forward to London, and was on the Exchange next morning ready for business, long before the opening of the market. That was the morning of the 20th, only a day and two nights after the battle that decided the fate of nations. Nathan had performed a great feat. He acted his role well. Like the great hero whose political history had just closed, Nathan was “grand, gloomy and peculiar,” in the financial sense of the phrase. He was an embodiment of the latest information from the Continent. In defiance of winds and waves he had, at the risk of his life, outstripped the swiftest couriers and the best special correspondents of thatday. The great operators flocked around him asking, “What is the news?” Nathan sighed heavily and seemed reluctant to tell. Eventually, this important piece of information was extorted from him, in strict confidence: “Blucher, at the head of his vast army of veterans, was defeated by Napoleon at Ligny, on the 16th and 17th (of June), and there can be no hope for Wellington with his comparatively small and undisciplined force.” This statement was substantially true, and it forcibly reminds one of Tennyson’s poetic remarks:
“A lie which is all a lieMay be met and fought with outright,But a lie which is half a truth,Is a harder matter to fight.”
“A lie which is all a lieMay be met and fought with outright,But a lie which is half a truth,Is a harder matter to fight.”
“A lie which is all a lieMay be met and fought with outright,But a lie which is half a truth,Is a harder matter to fight.”
“A lie which is all a lie
May be met and fought with outright,
But a lie which is half a truth,
Is a harder matter to fight.”
True, Blucher had been repulsed at Ligny. The Duke had an awkward squad, with the exception of the English, the Irish, and the Scotch Greys, to marshal in fighting order, but he “got there all the same.” Nathan’s secret point soon oozed out, and in less than an hour after the opening there was a perfect panic on the London Stock Exchange. Nathan had his brokers at work, first selling “short,” and then, when the market reached bed rock, buying on the long side. He bought everything that he could raise, borrow or beg the money for—consols, notes and bills. When the news of Wellington’s victory arrived, forty-eight hours after Nathan had begun to manipulate the market, and when he was “long” of everything that he had money or credit to purchase, securities went up with a boom. Nathan realized six million dollars, and it is said that a large number of the great operators flocked around him to congratulate him. It was lucky for Nathan that the scene of his operations was in London instead of Wall Street, otherwise Judge Lynch might have had something to say before the settlements had been made.
The career of Nathan Rothschild in England was remarkable, and his success from the very start phenomenal. Hebegan his speculations and money-lending operations in Manchester with $500, being the limited amount which he was permitted to draw from the family treasury on taking his departure from Frankfort to seek his fortune in Great Britain. In five years he had augmented the $500 to a million. He then removed to London. There he married a daughter of Levi Cohen, one of the wealthiest Hebrews of the great metropolis, well known by the pseudonym of Pound-Adoring Cohen. His father-in-law was afraid that Nathan would soon ruin himself, so reckless did he seem in his speculations, estimated by the conservative standard of old Cohen.
Nathan was very fortunate in his speculative ventures in the public funds, and managed to get himself introduced so as to do considerable business for the Government in its transactions on the Continent. His first introduction to the Government was through the Duke of Wellington, who during his peninsular campaigns had made drafts that the Treasury of Great Britain was dilatory in meeting. Nathan purchased these drafts at a large discount. He afterwards renewed them to the Government, and they were eventually redeemed at par. This was the means of bringing him into confidential relations with the ministry of Great Britain, and he was entirely trusted as their chief agent in all their financial matters on the Continent. This gave him immense advantage in speculating, and enabled him to give his brothers in the other great capitals of Europe a large amount of valuable and inside information, which put them in a position to speculate with success in the funds of their respective Governments. Nathan had made arrangements to get the very latest information from Frankfort, then the centre of European financiering, by well trained carrier pigeons. He had also several boats of his own by which to send personal messages across the channel in cases where these were requisite, and a boat always in readiness at a moment’s notice in case his presence should be indispensable at the great money centre, and the central counting and clearing house of the family.
Nathan Rothschild was a strange and inconsistent compound of liberality, avariciousness, and penuriousness. He entertained his guests in a princely style, and often princes were mingled with those guests, but he was miserably mean with his clerks and employees generally. Unlike A. T. Stewart, who followed the very opposite rule, and had his place filled with bankrupt dry goods men as employees, the Rothschilds would never engage anybody who had been unfortunate in business. They had a superstitious feeling that misfortune is contagious, and they carefully avoided coming in contact with any of its victims. Nathan was even more precise than Wm. H. Vanderbilt in calculating the pennies in his lunch bill; but while Vanderbilt did this as a mere whim to illustrate his business precision and correctness, Rothschild really loved the pennies with ardent devotion. But Baron Nathan, even when he had accumulated $70,000,000 or $80,000,000, was not happy. He was tortured by the fear of enemies, who, he believed, intended to murder him. Like Vanderbilt, he received many threatening letters; but unlike the New York millionaire, who paid no attention to threats, but walked and drove out defiantly, Rothschild was still in mortal terror, and believed that the threats were intended to be executed. Nathan made one of his biggest piles out of the Almaden quicksilver mines in Spain. The Spanish Government wanted a loan, which he granted, receiving the mines as security for several years. He got up a “corner” in quicksilver, and raised the price 100 per cent. He realized almost $6,000,000 out of this transaction. It was as good for him as the Waterloo deal, only the returns did not come in so quickly. Nathan died in Frankfort, at the age of 59, in 1836. His last words were, “He is trying to kill me. Quick, quick, give me the gold.” His death created a panic on the London Stock Exchange, and the Continental Bourses were greatly embarrassed by the event. The news was conveyed by a carrier pigeon, which was shot by a boy near Brighton. The message was briefly,Il est mort-“He is dead.” The interests of the house of Rothschild are now scattered over the globe, and it is probable that the aggregate wealth of all the branches of the firm, including the possessions of the various members of their families, exceeds $1,000,000,000.
W R Travers
W R Travers
W R Travers