the world of private banking
the world of private banking
the world of private banking
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THE RISE OF tHE ROtHScHILDS 11<br />
but this accolade properly belonged to Barings. 33 In 1825, Nathan’s acceptances<br />
totalled £300,000, compared with £520,000 for Barings. Twenty-five years later,<br />
acceptances at New Court had risen to £540,000, but <strong>the</strong> figure for Barings was<br />
£1.9 million; and <strong>the</strong> gap widened still fur<strong>the</strong>r in <strong>the</strong> second half <strong>of</strong> <strong>the</strong> century,<br />
when newcomers like Kleinworts also overtook Rothschilds. 34 Apart from <strong>the</strong><br />
obvious fact that <strong>the</strong> Rothschilds put government finance first, this reflected <strong>the</strong><br />
fact that <strong>the</strong> greater part <strong>of</strong> <strong>the</strong> bills business was generated by transatlantic trade,<br />
ra<strong>the</strong>r than by trade between Britain and continental Europe, which <strong>the</strong> Rothschilds<br />
were better placed to finance.<br />
Ano<strong>the</strong>r related field <strong>of</strong> activity was direct involvement in commodity trade<br />
itself. 35 Buying and selling goods ra<strong>the</strong>r than paper had been an integral part <strong>of</strong><br />
Mayer Amschel’s original business in Frankfurt, and Nathan himself had begun<br />
his career in Britain as a textile merchant, later branching out into ‘colonial goods’.<br />
However, <strong>the</strong> Rothschilds’ interest in such business appears to have dwindled in<br />
<strong>the</strong> 1820s, and it was not until after 1830 that <strong>the</strong>y took it up again. Unlike Barings,<br />
who took an interest in a wide range <strong>of</strong> traded goods, <strong>the</strong> Rothschilds preferred to<br />
specialize, aiming to establish a dominant role in a select number <strong>of</strong> markets. The<br />
commodities which attracted <strong>the</strong>ir attention were cotton, tobacco, sugar (primarily<br />
from America and <strong>the</strong> Caribbean), copper (from Russia), and, most importantly,<br />
mercury (from Spain). 36<br />
Of more importance was bullion broking. This was presumably what Nathan<br />
alluded to when he l<strong>of</strong>tily told a Hamburg house in 1817: ‘My business . . .<br />
consists entirely in Government transactions & Bank operations’. 37 In practice,<br />
that generally meant doing business with major note-issuing banks like <strong>the</strong> Bank<br />
<strong>of</strong> England and <strong>the</strong> Banque de France. Transfers <strong>of</strong> gold from England to <strong>the</strong><br />
continent had been a vital stepping stone towards direct involvement in English<br />
war finance before 1815, and <strong>the</strong> bro<strong>the</strong>rs never lost <strong>the</strong>ir interest in <strong>the</strong> bullion<br />
business. Here, too, complex calculations were involved, especially when coins<br />
were being melted down into bars to be reminted in ano<strong>the</strong>r market. 38 ‘The van<br />
loaded with silver ingots’ which blocked Prince Pückler-Muskau’s access to New<br />
Court in 1826 was no rare sight: to judge by <strong>the</strong> bro<strong>the</strong>rs’ letters, consignments<br />
<strong>of</strong> bullion worth tens <strong>of</strong> thousands <strong>of</strong> pounds regularly passed between Paris<br />
and London. There is an old anecdote which describes Nathan threatening to<br />
exhaust <strong>the</strong> Bank <strong>of</strong> England’s reserve by bringing an immense number <strong>of</strong> smalldenomination<br />
notes to its counter and demanding gold. 39 Few Rothschild myths<br />
33<br />
Ziegler, Sixth Great Power, pp. 127ff.<br />
34<br />
Chapman, Merchant Banking, p. 17; Kynaston, City, vol. I, pp. 308f.<br />
35<br />
Gille, Maison Rothschild, vol. I, pp. 401ff., 415–18, 420; vol. II, pp. 546–55.<br />
36<br />
Count E. Corti, The Rise <strong>of</strong> <strong>the</strong> House <strong>of</strong> Rothschild (London, 1928), p. 75f.<br />
37<br />
New York, Leo Baeck Institute, Nathan to Behrend Bro<strong>the</strong>rs, 14 March 1817.<br />
38<br />
See e.g., RAL, XI/109J/J/33, James, Paris, to Nathan, London, 10 March 1833.<br />
39<br />
See e.g., J. Reeves, The Rothschilds: The Financial Rulers <strong>of</strong> Nations (London,<br />
1887), pp. 181ff.