the world of private banking

JEwISH PRIVAtE BANKS 217
guaranteed by foreign obligations. The influence which Bischoffsheim acquired
in the Belgian financial market led him to play a key role in setting up national
capital. In 1835, he was one of the founders with James Rothschild and Adolphe
Oppenheim of the Banque de Belgique whose objective was to counterbalance the
power of the Société Générale, supposedly linked to the King of the Netherlands.
He decisively assisted the liberal governments in reforming the credit system by
creating a central bank, the Banque Nationale de Belgique, in 1850, and other
public credit institutions several years later.
Negotiations for government loans gave bankers excellent opportunities to
develop close relationships with politicians and royalty. Private bankers were not
necessarily associated with a particular political faction and their main desire was
to preserve their financial interests. However, with the growing internationalization
of their operations they naturally came to favour the balance of power in European
politics.
Meanwhile, wars still gave exceptional opportunities to private Jewish bankers
to rise to the top of the financial markets, thereby following a pattern very close to
that of their ancestors, the Hofjuden. This process lasted certainly until the 1870s.
Let us recall the case of Abraham Camondo, ‘the Rothschild of the Orient’. Heir of
a Sephardic family of bankers originating from Spain, who moved to Venice then
to Istanbul, he lived among the sarraf, the bankers settled in the Galata quarter. He
succeeded in becoming the banker of the Ottoman government and made his fortune
by financing the Crimean war and supporting the Sardinian monarchy during the
wars for Italian unification. Similarly, the rise of banker Gerson Bleichröder, later
nicknamed the Rothschild of Berlin, began with providing Bismarck with the funds
to finance the war with Austria, after the Prussian parliament had refused to oblige.
In 1867 Bismarck switched from the Frankfurt Rothschilds to Bleichröder for the
management of his personal finances. At the same time, the Berlin banker became
his close associate for the building of the German empire. Thanks to his close
relationship with the Rothschilds of Paris and Vienna, Bleichröder capitalized on
his position as one of the best-informed persons in Berlin.
With the early specialization of the British banking system, the main task of
the London Jewish merchant bankers was financing international trade through
acceptance and floating foreign loans. As a consequence, the prominent position
of private bankers in the City lasted longer than on the continent, and they
maintained their influence by sitting on the boards of the big joint-stock banks
which developed at the end of the century. Yet Alfred de Rothschild was the only
Jewish private banker who was admitted to sit on the board of the Bank of England
before World War I.
On the continent, where bankers were involved early in financing railway
building and industrialization, Jewish private bankers were very active. Although
they belonged to a religious and more or less discriminated minority, they did not
escape harsh rivalries with each other. At the core of that competition was the
wish of some bankers to free themselves from the leadership of the Rothschilds.
Nonetheless, it was not until the 1870s that they really succeeded.