the world of private banking
the world of private banking
the world of private banking
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130<br />
THE WORLD OF PRIVAtE BANKING<br />
Antoine Odier married <strong>the</strong> daughter <strong>of</strong> a businessman from Hamburg descended<br />
from French reformed ancestors, <strong>the</strong>n married his son, James, to <strong>the</strong> daughter <strong>of</strong><br />
an Amsterdam banker. The Hottinguers were allied to Farquhar Jameson, a British<br />
associate <strong>of</strong> <strong>the</strong> house, with <strong>the</strong> Delesserts, whose bank <strong>the</strong>y acquired, and with <strong>the</strong><br />
de Bethmanns, who also belonged to <strong>the</strong> <strong>world</strong> <strong>of</strong> international finance.<br />
These foreign connections were reinforced fur<strong>the</strong>r by travelling, which allowed<br />
<strong>the</strong> same bankers to receive <strong>the</strong>ir parents and ‘friends’ from various countries and<br />
in turn visit <strong>the</strong>m. The members <strong>of</strong> <strong>the</strong>se families moved around considerably,<br />
at least as long as <strong>the</strong>ir age allowed <strong>the</strong>m to. Generally, <strong>the</strong>y sent <strong>the</strong>ir sons on<br />
numerous foreign journeys which were really training to allow <strong>the</strong>m to understand<br />
major international business. Naturally, <strong>the</strong>y <strong>of</strong>ten started in England, close<br />
geographically and ahead in <strong>the</strong> development <strong>of</strong> credit. The majority visited this<br />
destination, but <strong>the</strong>re were also those who made multiple tours abroad, such as<br />
Rodolphe Hottinguer, who left for England at <strong>the</strong> age <strong>of</strong> 18. After returning for<br />
a year in Paris he <strong>the</strong>n spent some time in St Petersburg, <strong>the</strong>n left for <strong>the</strong> United<br />
States, this already being a well-established tradition in <strong>the</strong> family: some years<br />
later he left for a tour <strong>of</strong> <strong>the</strong> Ottoman Empire. Alphonse de Rothschild went to<br />
London at a very early age and made frequent and prolonged stays, notably from<br />
<strong>the</strong> age <strong>of</strong> 19, for experience <strong>of</strong> <strong>the</strong> railroad business. In 1848, at <strong>the</strong> age <strong>of</strong> 21, he<br />
was ready to leave for <strong>the</strong> United States, exploring <strong>the</strong> business <strong>world</strong>s <strong>of</strong> New<br />
York, New Orleans, and, more briefly, Havana. In 1856, he visited <strong>the</strong> Ottoman<br />
Empire, where his fa<strong>the</strong>r had already travelled prior to 1848; he also went as far<br />
as Alexandria in Egypt.<br />
These journeys had <strong>the</strong> fur<strong>the</strong>r objective <strong>of</strong> prospecting for new markets and,<br />
above all, forming a good network <strong>of</strong> agents in order to develop <strong>the</strong>se markets.<br />
The power and prosperity <strong>of</strong> each house <strong>of</strong> <strong>the</strong> Haute Banque in effect depended<br />
for its importance and effectiveness on its appointed (and <strong>of</strong>ten part-time) agents,<br />
especially in foreign countries. Bertrand Gille has shown how <strong>the</strong> house <strong>of</strong><br />
Rothschild formed a particularly close network <strong>of</strong> agents, who could be <strong>private</strong><br />
bankers also working on <strong>the</strong>ir own account, in a large number <strong>of</strong> financial markets.<br />
In <strong>the</strong> countries where Rothschild’s interests were particularly important, <strong>the</strong>y set<br />
up <strong>the</strong>ir own local agents, paid by <strong>the</strong> house, ‘who acted only on orders, or who<br />
generally only acted in very restricted fields’.<br />
In so building up <strong>the</strong>ir network, <strong>the</strong> Rothschilds were not really innovating,<br />
but following a path forged by <strong>the</strong> Protestant bankers in <strong>the</strong> eighteenth century.<br />
The inventories <strong>of</strong> Mallet Bro<strong>the</strong>rs and Co., which was not <strong>the</strong> most powerful<br />
<strong>of</strong> <strong>the</strong> houses but held <strong>the</strong> honour <strong>of</strong> being <strong>the</strong> oldest, give a sufficiently precise<br />
idea <strong>of</strong> <strong>the</strong> geographic distribution <strong>of</strong> its agents at <strong>the</strong> end <strong>of</strong> 1860. At that date<br />
<strong>the</strong> bank listed 1035 holders <strong>of</strong> current accounts, as many debtors as creditors,<br />
and close to 500 <strong>of</strong> <strong>the</strong>se were for agents domiciled outside France: seventyfive<br />
set up in England, as many again in <strong>the</strong> Scandinavian countries, about fifty<br />
in <strong>the</strong> German States, about forty in Switzerland; about thirty <strong>of</strong> <strong>the</strong> accounts<br />
came from Belgium and about twenty from Holland. The house had 35 regular<br />
clients in Spain, similarly in Italy, around ten in Portugal and around ano<strong>the</strong>r ten