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THE RISE OF tHE ROtHScHILDS 15
thereabouts’, but most of this (around two-thirds) was Nathan’s. 49 In order to adjust
for this preponderance, the contract sought to redefine the brothers’ collective
assets by excluding certain items (presumably real estate), and redistributing some
£200,000 in the form of promissory notes of £50,000 each from Nathan to his four
brothers. The resulting shares of a total notional capital of £336,000 were Nathan,
27 per cent; Amschel and Salomon, 20 per cent each; Carl and James, 16 per cent
each. Moreover, it was agreed to defray all expenses from the London house’s
revenues and to share net profits at the end of each year equally. 50 In the three years
during which this contract ran, the brothers’ capital grew at a phenomenal rate, as
we have seen. So much of this increase was due to Nathan’s speculations in consols
that, although the proportions of the total capital were more or less unchanged,
his brothers now agreed to weight the distribution of profits in his favour. There
were now technically ‘three joint mercantile establishments [conducted] under
their the . . . five partners’ mutual responsibility’: N.M. Rothschild in London,
M.A. von Rothschild & Söhne in Frankfurt, and James’s new house in Paris, de
Rothschild Frères. Henceforth, half of all the profits of the London house would go
to Nathan, while his brothers would receive an eighth each; he would also receive
four-sixteenths of the profits of the other two houses, while his brothers received
three-sixteenths apiece. The 1818 agreement also introduced a new system
whereby each of the partners received four per cent of their individual capital
share per annum by way of an income (there were no dividends or any other kind
of profit-distribution); while any lump sums spent on legacies for children, houses
or landed estates were to be deducted from the individual’s capital. In addition, ‘to
preserve regularity in the books and accounts’ it was agreed ‘that in the running
transactions of the three joint establishments although they form but one general
joint concern each respectively is to charge exchange, brokerage, postages, stamps
and interest pro and contra at the rate of 5 per cent’. 51 To reinforce the sense of
collective identity it was now specified that each House had to inform the others
of the transactions it carried out on a weekly basis.
Although initially intended to run for just three years, this agreement was in fact
renewed until 1825. 52 Significantly, the agreement of that year restored the 1815
system whereby profits were shared equally, reflecting the fact that the capital of
49
CPHDCM, 637/1/6/5, Articles of Partnership between Messrs Rothschild, 21 March
1815. Cf. Gille, Maison Rothschild, vol. I, p. 447f. It is not entirely clear from this document
what the total value of the firm’s capital was. The preamble states it to be around £500,000,
but the stated shares amount to just £136,000. From comments made in correspondence in
late 1815, the former figure seems more probable, though it may include valuations of real
estate as well as more liquid capital. See RAL, XI/109/2/2/124, James, Paris, to Nathan,
London, 2 Oct.; RAL, XI/109/2/2/126, Carl, Amsterdam, to Nathan, London, 3 Oct.
50
CPHDCM, 637/1/6/5, Articles of Partnership between Messrs Rothschild, 21
March 1815.
51
CPHDCM, 637/1/6/7/7–14, Articles of Partnership, 2 June 1818. Emphasis added.
52
CPHDCM, 637/1/6/27–28, Indenture, 25 Aug. 1824.