the world of private banking
the world of private banking
the world of private banking
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JEwISH PRIVAtE BANKS 217<br />
guaranteed by foreign obligations. The influence which Bisch<strong>of</strong>fsheim acquired<br />
in <strong>the</strong> Belgian financial market led him to play a key role in setting up national<br />
capital. In 1835, he was one <strong>of</strong> <strong>the</strong> founders with James Rothschild and Adolphe<br />
Oppenheim <strong>of</strong> <strong>the</strong> Banque de Belgique whose objective was to counterbalance <strong>the</strong><br />
power <strong>of</strong> <strong>the</strong> Société Générale, supposedly linked to <strong>the</strong> King <strong>of</strong> <strong>the</strong> Ne<strong>the</strong>rlands.<br />
He decisively assisted <strong>the</strong> liberal governments in reforming <strong>the</strong> credit system by<br />
creating a central bank, <strong>the</strong> Banque Nationale de Belgique, in 1850, and o<strong>the</strong>r<br />
public credit institutions several years later.<br />
Negotiations for government loans gave bankers excellent opportunities to<br />
develop close relationships with politicians and royalty. Private bankers were not<br />
necessarily associated with a particular political faction and <strong>the</strong>ir main desire was<br />
to preserve <strong>the</strong>ir financial interests. However, with <strong>the</strong> growing internationalization<br />
<strong>of</strong> <strong>the</strong>ir operations <strong>the</strong>y naturally came to favour <strong>the</strong> balance <strong>of</strong> power in European<br />
politics.<br />
Meanwhile, wars still gave exceptional opportunities to <strong>private</strong> Jewish bankers<br />
to rise to <strong>the</strong> top <strong>of</strong> <strong>the</strong> financial markets, <strong>the</strong>reby following a pattern very close to<br />
that <strong>of</strong> <strong>the</strong>ir ancestors, <strong>the</strong> H<strong>of</strong>juden. This process lasted certainly until <strong>the</strong> 1870s.<br />
Let us recall <strong>the</strong> case <strong>of</strong> Abraham Camondo, ‘<strong>the</strong> Rothschild <strong>of</strong> <strong>the</strong> Orient’. Heir <strong>of</strong><br />
a Sephardic family <strong>of</strong> bankers originating from Spain, who moved to Venice <strong>the</strong>n<br />
to Istanbul, he lived among <strong>the</strong> sarraf, <strong>the</strong> bankers settled in <strong>the</strong> Galata quarter. He<br />
succeeded in becoming <strong>the</strong> banker <strong>of</strong> <strong>the</strong> Ottoman government and made his fortune<br />
by financing <strong>the</strong> Crimean war and supporting <strong>the</strong> Sardinian monarchy during <strong>the</strong><br />
wars for Italian unification. Similarly, <strong>the</strong> rise <strong>of</strong> banker Gerson Bleichröder, later<br />
nicknamed <strong>the</strong> Rothschild <strong>of</strong> Berlin, began with providing Bismarck with <strong>the</strong> funds<br />
to finance <strong>the</strong> war with Austria, after <strong>the</strong> Prussian parliament had refused to oblige.<br />
In 1867 Bismarck switched from <strong>the</strong> Frankfurt Rothschilds to Bleichröder for <strong>the</strong><br />
management <strong>of</strong> his personal finances. At <strong>the</strong> same time, <strong>the</strong> Berlin banker became<br />
his close associate for <strong>the</strong> building <strong>of</strong> <strong>the</strong> German empire. Thanks to his close<br />
relationship with <strong>the</strong> Rothschilds <strong>of</strong> Paris and Vienna, Bleichröder capitalized on<br />
his position as one <strong>of</strong> <strong>the</strong> best-informed persons in Berlin.<br />
With <strong>the</strong> early specialization <strong>of</strong> <strong>the</strong> British <strong>banking</strong> system, <strong>the</strong> main task <strong>of</strong><br />
<strong>the</strong> London Jewish merchant bankers was financing international trade through<br />
acceptance and floating foreign loans. As a consequence, <strong>the</strong> prominent position<br />
<strong>of</strong> <strong>private</strong> bankers in <strong>the</strong> City lasted longer than on <strong>the</strong> continent, and <strong>the</strong>y<br />
maintained <strong>the</strong>ir influence by sitting on <strong>the</strong> boards <strong>of</strong> <strong>the</strong> big joint-stock banks<br />
which developed at <strong>the</strong> end <strong>of</strong> <strong>the</strong> century. Yet Alfred de Rothschild was <strong>the</strong> only<br />
Jewish <strong>private</strong> banker who was admitted to sit on <strong>the</strong> board <strong>of</strong> <strong>the</strong> Bank <strong>of</strong> England<br />
before World War I.<br />
On <strong>the</strong> continent, where bankers were involved early in financing railway<br />
building and industrialization, Jewish <strong>private</strong> bankers were very active. Although<br />
<strong>the</strong>y belonged to a religious and more or less discriminated minority, <strong>the</strong>y did not<br />
escape harsh rivalries with each o<strong>the</strong>r. At <strong>the</strong> core <strong>of</strong> that competition was <strong>the</strong><br />
wish <strong>of</strong> some bankers to free <strong>the</strong>mselves from <strong>the</strong> leadership <strong>of</strong> <strong>the</strong> Rothschilds.<br />
None<strong>the</strong>less, it was not until <strong>the</strong> 1870s that <strong>the</strong>y really succeeded.