the world of private banking

22
THE WORLD OF PRIVAtE BANKING
The most striking point about James’s outpouring is the way he equated ‘religion’
with endogamy: ‘pride in religion’ meant, in practice, intermarriage within the
Rothschild family ‘so that the fortune would stay inside the family’.
It is not enough to explain the Rothschilds’ success purely in terms of their overdeveloped
sense of familial solidarity, of course. Other Jewish banking families
established themselves in multiple locations; but none came close to enjoying the
Rothschilds’ financial success. One further explanation is that the Rothschilds
evolved a peculiarly effective set of business ‘rules’ and practices; the essence of
the familial structure of the firm was that these were then passed from generation
to generation. Indeed, it is possible to find examples of Mayer Amschel’s greatgrandchildren
repeating his precepts in their correspondence with one another.
Conspicuous by its absence, it should be noted right away, was any regard for
systematic accounting, despite Mayer Amschel’s repeated admonitions on this
subject. For example, in August 1814 – a critical moment in the firm’s history
– Salomon and Amschel had to confess that they were ‘completely confused and
do not know where the money is’. ‘Together we are all rich and if all the five of us
are taken into consideration we are worth quite a lot’, wrote Salomon anxiously to
Nathan. ‘But where is the money?’ 79 ‘The payments we have to make are big, far
too big’, lamented Salomon the following year. ‘Dear Nathan, you write that you
have one million or two million over there. Well you really must have, because
our brother Amschel is bust. We are bust. Carl is bust. So one of us must have the
money.’ In fact, the continental Rothschilds only averted ‘bankruptcy’ at this time
by means of short-term borrowing. 80 As Salomon said, too much of their accounting
was being done ‘in the head’ instead of on paper. 81 In fact, it was not until February
1816 that Nathan remitted sufficient funds to Frankfurt ‘to pay all our debts’. 82
Matters only improved gradually. Double-entry book-keeping was introduced
in Paris and Frankfurt between 1816 and 1818. 83 Profit-and-loss accounts
apparently began to be kept in London in 1828, and prior to 1873 balance sheets
79
RAL, T29/173, XI/109/0/7/13, Amschel to James, 22 Aug. 1814; RAL, T29/181,
XI/109/0/8/7, Salomon to Nathan, London, 31 Aug.
80
RAL, XI/109/2/2/97, Amschel to his brothers, 21 Sept. 1815; RAL, XI/109/2/2/115,
Amschel to his brothers, 28 Sept.; RAL, XI/109/2/2/116, Amschel to Carl and Nathan,
28 Sept.; RAL, XI/109/2/2/120, James and Salomon to Nathan, London, Sept.; RAL,
XI/109/2/2/119, Salomon, Paris, to Nathan, London, 30 Sept.; RAL, XI/109/2/1/58,
Salomon to Nathan, undated fragment, c. Oct.
81
RAL, XI/109/2/2/129, Salomon, Paris, to Nathan, London, 4 Oct. 1815; RAL,
T30, XI/109/2/2/167, Salomon and James, Paris, to Nathan, London, 11 Nov.; RAL,
XI/109/2/2/175, Carl, Amsterdam, to Nathan, London, 20 Nov.
82
RAL, T31, XI/109/4/1/7, Amschel, Frankfurt, to Nathan, London, 5 Jan. 1816;
RAL, T31/87/2, XI/109/4, Amschel, Frankfurt, to James, Paris, 1 Feb.
83
RAL, T32/49/1, XI/109/5A, Amschel, Berlin, to Carl, 19 July 1816; RAL, T33/22,
XI/109/5B, James, Paris, to Nathan, London, 14 Oct.; RAL, T33/283/1, XI/109/5B, same to
same, 18 Oct.; RAL, T64 /212/3, Carl, Frankfurt, to Salomon, April 1818.