the world of private banking

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