The House of Rothschild: The World's Banker, 1849-1999 by Niall Ferguson, Nial Ferguson

From the Publisher

Niall Ferguson's House of Rothschild: Money's Prophets 1798-1848 was hailed as a "great biography" by Time magazine and named one of the ten best books of 1998 by Business Week. Now, with all the depth, clarity, and drama with which he traced their ascent, Ferguson -- the first historian with access to long-lost Rothschild family archives -- continues and concludes his myth-breaking portrait of one of the most fascinating and powerful families of modern times.

From Crimea to World War II, wars repeatedly threatened the stability of the Rothschilds' worldwide empire. Despite these many global upheavals, theirs remained the biggest bank in the world up until the First World War, their interests extending far beyond the realm of finance. Yet the Rothschilds' failure to establish themselves successfully in the United States proved fateful, and as financial power shifted from London to New York after 1914, their power waned. At once a classic family saga and a major work of economic, social, and political history, The House of Rothschild is the definitive biography of one of the most powerful firms of the nineteenth century and the riveting story of an exceptional family.

Publishers Weekly

Ferguson is not only publishing massive works of history at an astonishing rate; he is publishing well-written and controversial books. The Pity of War (Forecasts, Mar. 8) caused a stir by arguing that Britain bore the brunt of the blame for WWI. The completion of his two-volume history of the Rothschild banking empire begins at a high point of wealth, power and civic involvement, with Benjamin Disraeli a close family friend and Lionel Rothschild playing a leading role in gaining Jews the right to sit in Parliament. The book ends with the post-WWII rebuilding of the Rothschilds into a far-flung "mini-multinational." Drawing on thousands of letters from private Rothschild archives, Ferguson does a masterful job of showing how the Rothschild financial empire interacted with the governments of Europe. His account is peppered with countless refutations of previous interpretations and analyses. Yet the larger historical picture is often blurred as Ferguson furnishes blow-by-blow accounts of, for example, the French Rothschilds' ultimately successful decades-long battle against the Cr dit Mobilier. Readers will be left wanting more analysis of the larger sea change that consigned the Rothschild style of private banking to its current secondary status. And while he follows the senior partners in Britain and France (other houses, in Naples, Vienna and Frankfurt, either closed or simply receded from Ferguson's view), Ferguson sticks to their public deeds and roles, rarely venturing into the personal or the psychological. Still, this history is teeming with soundly argued expositions on the role of a singularly important family. Illus., charts, tables, appendices. (Nov.) FYI: In November, Penguin will publish The House of Rothschild: Money's Prophets 1798-1848 in paperback. Copyright 1999 Cahners Business Information.

Jonathan Steinberg

The richness of the social reality which he conveys has the charm of a novel, perhaps one of those Russian novels with so many characters that the reaker needs a guide to keep them straight...He also paints wonderful pictures of the Rothschild women...

The London Review of Books

The New York Times Book Review - Sylvia Nasar

Niall Ferguson's brilliant and altogether enthralling two-volume family saga of the Rothschilds proves that academic historians can still tell great stories that the rest of us want to read. Despite its rigorous and sophisticated treatment of the intricacies of finance, economics and diplomacy, ''The House of Rothschild: The World's Banker, 1849-1999,'' the second volume of Ferguson's history, has all the grandeur and sweep of a 19th-century three-decker novel....What a pleasure to read a book in which adroit turns of phrase and witty asides -- as well as the unfolding drama -- make one want to turn the page. But more than a tasting menu, this is a substantial repast. An Alan Greenspan can feast on artfully presented data on bonds and episodes of financial contagion. A connoisseur of politics can savor the machinations of a Neville Chamberlain or Winston Churchill.

Kirkus Reviews

Once upon a time, the Rothschilds were the wealthiest people on earth. In a thorough, diligent study, Ferguson (History/Oxford) completes his grand chronicle of the family that achieved history's greatest economic hegemony (The House of Rothschild: Money's Prophets, 1798-1848, 1998). Access to family records, hitherto unavailable, was facilitated by the English branch of the clan for this monumental authorized history. Ferguson makes their engrossing story an advanced seminar on the financial history of Europe. In their heyday, the Rothschilds practiced geopolitics on a grand scale. They arranged the tricky reparations following the Franco-Prussian conflict, were active in securing Suez for Victoria, and managed assets for the Vatican. Contrary to myth, they were generally pacifists. (War tended to disrupt markets as well as harm people)., "While others unified nations, the Rothschilds were quietly unifying Europe," using railroads as a binding factor. They demolished social barriers erected against Jews, hobnobbing easily with aristocracy and royalty, dealing with the likes of Disraeli and Gladstone, Lloyd George and Cecil Rhodes, Napoleon III and Bismarck. They ultimately joined the nobility themselves, purchasing castles and art in prodigious quantities. By the turn of the last century and the advent of the fifth generation, however, there was a decline in the Rothschilds' fortunes. They had neglected to establish a foothold in the New World. Power was dispersed among numerous, often effete, cousins. There were marriages outside the endogamous family, eventually even outside its religion. Some partners cashed out to go their own ways. Virulent anti-Semitism and two world warsleft the family enterprises no more important than those of their numerous competitors. The text has a pronounced British accent, as the English house is given primacy. (Values are uniformly reported in pounds sterling). Not History for Dummies. Copious financial accounts are combined with political and social narrative to produce a formidable chronicle. It is an extraordinary tale of the unique commercial underwriters of European history, told with impressive scholarship.

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Chapter One

Charlotte's Dream
(1849-1858)

I went to sleep at 5 and woke against 6; I had dreamt that a huge vampire was greedily sucking my blood... Apparently, when the result of the vote was declared, a loud, enthusiastic roar of approval resounded ... throughout the House [of Lords]. Surely we do not deserve so much hatred.

CHARLOTTE DE ROTHSCHILD, MAY 1849

Though they had managed to weather its storms financially, 1848 might still have proved a fatal turning point for the Rothschilds—but for reasons unrelated to economics and politics. For in the years immediately after the revolution the very structure of the family and the firm was called into question. It is easy to forget as one reads their letters that the four remaining sons of Mayer Amschel were by now old men. Amschel was seventy-seven in 1850, Salomon seventy-six and Carl an ailing sixty-two. Only James was still indefatigable at fifty-six.

    Longevity, on the other hand, was a family trait: though their father had died aged sixty-eight, their mother, born in 1753, lasted long enough to see the crown of a united Germany offered to a Prussian king by a national assembly gathered in her own home town. Indeed, Gutle Rothschild had become something of a by-word by the 1840s, as The Times reported:

The venerable Madame Rothschild, of Frankfort, now fast approaching to her hundredth year, being a little indisposed last week, remonstrated in a friendly way with her physician on the inefficiency of hisprescriptions. "Que voulez-vous Madame?" said he, "unfortunately we cannot make you younger." "You mistake, doctor," replied the witty lady, "I do not ask you to make me younger. It is older I desire to become."

    Cartoons were published on the subject: one, entitled Grandmother's 99th Birthday, depicted James, with Gutle in the background, telling a group of well-wishers: "When she reaches par, gentlemen, I will donate to the state a little capital of 100,000 gulden" (see illustration 1.i). A different version of the same joke has a doctor assuring her she will "live to be a hundred." "What are you talking about?" snaps Gutle. "If God can get me for 81, He won't take me at a hundred!"

    Her dogged refusal to quit the old house "zum grünen Schild" in the former Judengasse appealed to contemporaries, suggesting as it did that the Rothschilds' phenomenal economic success was rooted in a kind of Jewish asceticism. Ludwig Börne had sung her praises on this score as early as 1827: "Look, there she lives, in that little house ... and has no wish, despite the world-wide sovereignty exercised by her royal sons, to leave her hereditary little castle in the Jewish quarter." When he visited Frankfurt sixteen years later, Charles Greville was amazed to behold "the old mother of the Rothschilds" emerging from her "same dark and decayed mansion ... not a bit better than any of the others" in the "Jews' street":

In this narrow gloomy street, and before this wretched tenement, a smart calèche was standing, fitted with blue silk, and a footman in blue livery was at the door. Presently the door opened, and the old woman was seen descending a dark, narrow staircase, supported by her granddaughter, the Baroness Charles Rothschild, whose carriage was also in waiting at the end of the street. Two footmen and some maids were in attendance to help the old lady into the carriage, and a number of inhabitants collected opposite to see her get in. A more curious and striking contrast I never saw than the dress of the ladies, both the old and the young one, and their equipages and liveries, with the dilapidated locality in which the old woman persists in remaining.

    But on May 7, 1849, in her ninety-sixth year and with her surviving sons at her bedside, Gutle finally died.

    It was one of a spate of deaths in the family. The year before, Amschel's wife Eva had died. In 1850, so did Nathan's widow Hannah as well as—to the great distress of the Paris Rothschilds—her youngest grandson, Nat's second son Mayer Albert. Carl's wife Adelheid died in 1853, followed a year later by Salomon's wife, Caroline. The effect of these events on the older members of the second generation may easily be imagined. Mayer Carl noticed how "deeply affected" Amschel had been by the death of his mother. "It is a great loss to [him] ... & I cannot tell you how many wretched hours we have spent lately ... Uncle A. is confined to his room but feels rather better after the first shock which was really fearful." He was only slightly "calmer" when the family gathered in Frankfurt for Gutle's funeral. Indeed, he and his brother Salomon cut rather forlorn figures in their twilight years, spending less and less time in the counting house and more and more time in Amschel's garden.

    To the new Prussian delegate to the Diet of the restored German Confederation—a mercurial and ultra-conservative Junker named Otto von Bismarck—Amschel seemed a pathetic old man. "[I]n monetary terms," Rothschild was of course the "most distinguished" man in Frankfurt society, Bismarck reported to his wife shortly after arriving in the town. But "take their money and salaries away from the lot of them, and you would see how undistinguished" he and the other citizens of Frankfurt really were. The newcomer was characteristically rebarbative when Amschel invited him to dinner ten days in advance (to be sure of an acceptance), replying that he would come "if he was still alive." This answer "alarmed him so much that he repeated it to everybody: `What, why shouldn't he live, why should he die, the man is young and strong!'" With his limited private means and meagre stipend, the Junker diplomat was bound to be impressed as much as he was repelled by the "hundredweight of silverware, golden forks and spoons, fresh peaches and grapes, and excellent wines" which were laid before him on Amschel's dinner table. But he could not conceal his disdain when the old man proudly showed off his beloved garden after their meal:

I like him because he's a real old wheeling and dealing Jew, and does not pretend to be anything else; he is strictly Orthodox with it, and refuses to touch anything but kosher food at his dinners. "Johann, take some pread vit you for the deer," he said to his servant, as he went out to show me his garden, in which he keeps tame deer. "Herr Paron, this plant cost me two tousand gulden, honestly, two tousand gulden cesh. You can hef it for a tousand; or if you'd like it es a present, he'll pring it to your house. Gott knows I regard you highly, Paron, you're a hendsome man, a fine man." He is a short, thin, little man, and quite grey. The eldest of his line, but a poor man in his palace, a childless widower, cheated by his servants and despised by smart Frenchified and Anglicised nephews and nieces who will inherit his wealth without any love or gratitude.

    As Bismarck shrewdly divined, it was this last question—who should inherit their wealth—which most preoccupied the old Rothschilds, who accordingly spent long hours tinkering with their wills. Years before—in 1814—Amschel had joked that the difference between a rich German Jew and a rich Polish Jew was that the latter would "die just when he was losing, whilst the rich German Jew only dies when he has a great deal of money." Forty years later, Amschel was living up to his own stereotype, with a share in the family firm worth nearly £2 million. But who should inherit this fortune? Denied the son he had so long prayed for, Amschel brooded on the merits of his twelve nephews, particularly those (principally Carl's sons Mayer Carl and Wilhelm Carl) who had settled in Frankfurt. In the end, his share of the business was divided in such a way that James got a quarter, Anselm a quarter, Nathan's four sons a quarter between them and Carl's three sons the last quarter.

    Salomon had an heir, of course, and a daughter well provided-for in Paris; but—perhaps because of the harsh words they had exchanged in Vienna at the height of the revolutionary crisis—he sought to avoid making Anselm his sole heir. Instead, he devised complicated provisions designed to transmit most of his personal wealth directly to his grandchildren. At first he seems to have considered leaving almost all of it (£1.75 million) to his daughter Betty's children (£425,000 apiece for the boys and just £50,000 for Charlotte, whom he had already given £50,000 on the occasion of her marriage to Nat), leaving only his three houses to Anselm and his sons, and just £8,000 for their married sister Hannah Mathilde. Even his Paris hôtel, he told Anselm, would go to "you and your sons ... I repeat it is for you and your sons. I have thought about it and put in a clause [to ensure it remains their property for] over a hundred years. No sons-in-law or daughters can have any claim on it." This was partly a self-conscious strategy to exert the maximum posthumous influence, rather as Mayer Amschel had done in 1812; indeed, the exclusion of the female line was an idea he had inherited from his father. But, unlike his father, Salomon decided that only one of his grandsons would ultimately inherit his share of the family business from Anselm—a new development in a family which had hitherto treated all male heirs more or less equally. In a final codicil to his will dated 1853, he scrapped the clause which left the choice of successor to Anselm, specifying (unsuccessfully, as it turned out) his eldest grandson Nathaniel. Ultimately, all Salomon's schemes came to naught; in practice, it was Anselm who inherited his fortune and who decided which of his sons should succeed him. Bismarck was right too that the younger Rothschilds ridiculed their old uncles. Visits to the invariably "sad and morose" Uncle Carl were especially dreaded. If there was great grief in 1855 when Salomon, Carl and Amschel one after another expired in the space of just nine months, no record of it has come to light.

    This wave of mortality came in the wake of a dramatic upheaval in the Rothschilds' financial affairs. As we have seen, the huge sums which had to be written off in the wake of the Vienna house's effective collapse were not easily forgotten, especially by the London partners, whose worst fears about their uncles' reckless business methods appeared to have been confirmed. Unfortunately, the structure of the firm meant that losses of the sort sustained by Salomon had to be borne collectively; his personal share of the firm's total capital was not proportionately reduced. This explains why, in the period immediately after the revolution, unprecedented centrifugal forces threatened to break the links which Mayer Amschel had forged nearly forty years before to bind his sons and grandsons together. In particular, the London partners sought to "liberate" themselves from the commitments to the four continental houses which had cost them so dear in the wake of the revolution. As Nat put it in July 1848, he and his brothers wished to "come to some sort of an arrangement so that each house may be in an independent position." Small wonder the prospect of a "commercial and financial congress" had filled Charlotte with such dread when it was first proposed in August 1848: "Uncle A. is weakened and depressed by the loss of his wife, Uncle Salomon by the loss of his money, Uncle James by the uncertain situation in France, my father [Carl] is nervous, my husband, though splendid, is stubborn when he is in the right."

    When James set off to see his brothers and nephews in Frankfurt in January 1849, Betty fully expected the congress to "alter the bases of our Houses, and following the London house, [to] grant mutual freedom from a solidarity which is incompatible with the movements in politics ..." Characteristic of the strained relations between Paris and London was the row later that year when James heard that Mayer had "ordered" one of the Davidson brothers "not to send any gold to France"—an assertion of English paramountcy he found intolerable. In Paris itself, there was constant friction between Nat and James. The former had always been a good deal more cautious than his uncle, but the revolution, as we have seen, all but broke his nerve as a businessman. "I advise you to be doubly cautious in business generally," he exhorted his brothers in a typical letter at the height of the crisis:

As for me I have taken such a disgust to business that I should particularly like to have no more of any sort or description to transact ... What with the state of things all over the world, the revolutions that spring up in a minute & when least expected I think it downright madness to go & plunge oneself up to one's neck into hot water for the chance of making a little money. Our good Uncles are so ridiculously fond of business for business' sake and because they cannot bear the idea of anybody else doing anything that they can't let anything go if they fancy another person wishes for it. For my part I am quite sure there is no risk of Baring advancing much [on Spanish mercury] & if he chooses so to do let him do it, be satisfied and take things easy.

    Betty saw the force of this. As she commented, "Our good Uncle [Amschel] can't tolerate a lessening of our fortune, and in his desire to restore it along previous lines, he wouldn't think twice about throwing us back into the disturbance of hazardous affairs." But James was increasingly impatient with Nat's pusillanimity. Charlotte suspected that James would positively welcome his nephew's withdrawing from the business as it would allow him to increase the involvement of his elder sons Alphonse and Gustave (who first begin to figure in the correspondence in 1846). As Betty put it, the "old ties of fraternal union" for a time seemed "pretty close to falling apart."

    Nor were these the only sources of familial disunity. Even before the 1848 revolution, there had been complaints from Frankfurt about the attitude of the London house. It was, complained Anselm, "very unpleasant to be the most humble servant, to execute your order without even knowing by the Spanish correspondence what is going forward. Very true it is that we do not merit any consideration, & that since a long time ago [sic] we are ranged in a secondary line in the Community of the different houses." As this implies, Anselm was assuming that he, as the eldest of the next generation, would be Amschel's successor in Frankfurt. Yet the collapse of the Vienna house changed everything, as it put pressure on him to take over permanently his father's place in Austria. In the same way, Carl wished his eldest son Mayer Carl to succeed him in Italy. However, the childless Amschel was even more determined that Mayer Carl should take over from him in Frankfurt, leaving his younger and less able brother Adolph to go to Naples. As James observed, such arguments were not only between the elderly brothers but also between their sons and nephews, who were all evidently vying for control of the Frankfurt house, since it continued to be dominant over its Vienna and Naples branches: "Anselm is at odds with Mayer Carl. Mayer Carl is at odds with Adolph." Although notably partisan in her eldest brother's favour, Charlotte's diary details some of the ill-feeling this rivalry generated:

Mayer Carl ... is mature; a man of the world and an international citizen. He is in his prime and at the height of his by no means inconsiderable powers. He has certainly earned himself a greater degree of popularity than Anselm through his engaging manner, his vivacious personality and witty conversation. Indeed he is a welcome and well liked figure in Frankfurt, far more so than my brother-in-law ever was, is or could be. I rather doubt that he possesses the solid breadth and depth of knowledge that Anselm has gained and I am in no position to assess whether he is an experienced businessman, or whether his judgement on important matters is sound and whether he is a good writer and speaker. But ... Anselm is utterly condescending towards my brother, which is quite unjustifiable for one would have to scour whole kingdoms to find such a gifted young man. Perhaps he does not have the aptitude for thorough research and lengthy study required for the pursuit of the scientific branches of intellectual thought. Yet, as a banker and a man of the world, as a refined and educated member of European Society (for he is at ease with all nationalities and classes), it seems to me he is without equal. It is unjust and unworthy of Anselm to treat him with such disdain.

     Finally, it is important to bear in mind the anger felt in London and Paris towards the Vienna house after the dèbâcle of 1848. At times, James talked as if even he would not be sorry to sever his links with Vienna. "I have no interest in Vienna," he wrote to New Court in December 1849. "While others speculate against the government there, our people in Vienna are not so smart and are unfortunately poor businessmen. They always think they are doing business for the good of the state."

     Yet in the end the partnership was renewed in 1852 with relatively limited alterations to the 1844 system and continued to function with as much success as ever in the following two decades. Why was this? The best explanation for the survival of the Rothschild houses as a multinational partnership lies in the vital role played by James in bridging the generation gap and binding the increasingly divergent branches of the family together again. As Charlotte remarked when she saw her uncle in Frankfurt in 1849, James had emerged from the crisis of 1848 with his lust for life and business undiminished:

I have seldom seen such a practically shrewd man, so worldly and canny, so mentally and physically active and indefatigable. When I reflect that he grew up in the Frankfurt Judengasse and never enjoyed the advantages of high culture in his childhood and youth, I am amazed and admire him beyond words. He has fun and takes pleasure in everything. Every day he writes two or three letters and dictates at least six, reads all the French, German and English newspapers, bathes, has a one-hour morning nap, and plays whist for three or four hours.

    And this was James's routine when he was away from Paris. The James whom the young stockbroker Feydeau encountered in the rue Laffitte was as much a force of nature as he had been in Heine's heyday; if anything, age made James only the more formidable.

    For all his youthful vigour, James nevertheless remained deeply imbued with the familial ethos of his father's day. Even before 1848, he had been worried by the signs of dissension between the five houses. Disagreements about the accounts, he warned Lionel in April 1847, were leading "to a state of affairs that in the end everyone deals for himself and this then creates a great deal of unpleasantness." "It is only the reputation, the happiness and the unity of the family which lies close to my heart," he wrote, echoing the familiar admonitions of Mayer Amschel, "and it is as a result of our business dealings that we remain united. If one shares and receives the accounts every day, then everything will stay united God willing." It was to this theme that James returned with passionate urgency in the summer of 1850—a letter of such importance that it deserves to be quoted at length:

It is easier to break up a thing than to put it back together again. We have children enough to carry on the business for a hundred years and so we must not go against one another ... We must not delude ourselves: the day when a [single] company no longer exists — when we lose that unity and co-operation in business which in the eyes of the world gives us our true strength—the day that ceases to exist and each of us goes his own way, then good old Amschel will say, "I have £2 million in the business [but now] I am withdrawing it," and what can we do to stop him? As soon as there is no longer majority [decision-making] he can marry himself to a Goldschmidt and say, "I am investing my money wherever I like," and we shall never stop reproaching ourselves. I also believe, dear Lionel, that we two, who are the only ones with influence in Frankfurt, must really aim to restore peace between all [the partners] ... What will happen if we are not careful is that capital amounting to £3 million will fall into the hands of outsiders, instead of being passed on to our children. I ask you, have we gone mad? You will say that I am getting old and that I just want to increase the interest on my capital. But, firstly, all our reserves are, thank God, much stronger than when we made our last partnership contract, and secondly, as I said to you on the day I arrived here, you will find in me a faithful uncle who will do everything in his power to achieve the necessary compromise. I therefore believe that we must follow these lines of argument and do everything possible—make every sacrifice on both sides—to maintain this unity which, thanks be to the Almighty, has protected us from all the recent misfortunes, and each of us must try to see what he can do in order to achieve this objective.

    These were themes James harped on throughout 1850 and 1851. "I assure you," he told Lionel's wife Charlotte (whom he had identified as an ally), "the family is everything: it is the only source of the happiness which with God's help we possess, it is our attachment [to one another], it is our unity."

    It is in the light of James's campaign for unity that the partnership contract of 1852 should therefore be understood—not as weakening the ties between the houses, but as preserving them through a compromise whereby the English partners dropped their demands for full independence in exchange for higher rates of return on their capital. As early as 1850, James had outlined the terms of this compromise: in Nat's words, he proposed "that the rate of interest on the capital for us should be raised," provided always that the London house was more profitable than the others. This was also the thrust of his letter to Lionel quoted above; and it was the system finally agreed to in 1852. The British partners received a variety of sweeteners: not only were they permitted to withdraw £260,250 from their share of the firm's capital, but the interest on their share (now 20 per cent of the total) was increased to 3.5 per cent, compared with 3 per cent for James, 2.625 per cent for Carl and 2.5 for Amschel and Salomon. In addition, the rules governing the joint conduct of business were relaxed: henceforth, no partner could be obliged by the majority to go on business trips, while investments in real estate were no longer to be financed from the collective funds. In return for these concessions, the English partners accepted a new system of collaboration. Clause 12 of the agreement stated that "to secure an open and brotherly co-operation and the advancement of their general, reciprocal business interests" the partners would keep one another informed of any transactions worth more than 10 million gulden (c. £830,000), and offer participations of up to 10 per cent on a reciprocal basis. Otherwise, the terms of all previous agreements not specifically altered by the new contract remained in force including, for example, the procedures for common accounting. This undoubtedly represented a measure of decentralisation. But considering that the alternative (seriously discussed the following year) was the complete liquidation of the collective enterprise, it represented a victory for James.

    What the 1852 agreement did not do was to decide the succession in Frankfurt (other than to rule out Adolph): henceforth, Anselm, Mayer Carl and Wilhelm Carl were all to sign for the Frankfurt house. (It also gave Alphonse and Gustave the right to sign for the Paris house.) Only after the deaths of James's brothers in 1855 did the new structure of the firm emerge (see table 1a). Despite the provisions of his will, all Salomon's share of the collective capital passed to Anselm (an outcome which, for reasons which are obscure, James challenged only half-heartedly on his wife's behalf). Carl's share was divided equally between his sons after the deduction of a seventh, which went to his daughter Charlotte. Finally, and decisively, Amschel's share was divided up in such a way that James and Anselm each received a quarter, as did the sons of Nathan and the sons of Carl. The net effect of all this was to give close to equal power to Anselm, James and the English-born partners, while reducing the influence of Carl's sons. Their influence was further reduced by the decision to put Adolph in charge of the Naples house, and leave Frankfurt to Mayer Carl and his pious brother Wilhelm Carl.

    It was a compromise which worked in practice. After 1852, James was prepared to show a much greater degree of deference to his nephews' wishes than in the past. New Court no longer took orders from James—as can easily be inferred from the diminished length of his letters to London after 1848. Increasingly, he scribbled no more than a postscript to Nat's despatch and often concluded his suggestions about business—as if to remind himself that there was no longer a primus inter pares—with the telling phrase: "Do, dear nephews, what you wish." This was doubtless gratifying to Lionel. Yet the compromise of 1852 meant that the pre-1848 system of co-operation between the five houses was in fact resumed with only a modest degree of decentralisation. The balance sheets of the Paris and London houses reveal a rate of interdependence which was less than had been the case in the 1820s, but it was still substantial. To give just one example, 17.4 per cent of the Paris house's assets in December 1851 were monies owed to it by other Rothschild houses, principally London.

    Moreover, the London partners' assumption that their house would be more profitable than the others proved over-confident. Although the Naples and Frankfurt houses tended to stagnate (for reasons largely beyond the control of Adolph and Mayer Carl), it was James who made much of the running after 1852, expanding his continental railway interests so successfully that by the end of his life the capital of the Paris house far exceeded that of its partners. Anselm too proved unexpectedly adept at restoring the vitality of the shattered Vienna house. It turned out to be far from disadvantageous for the London partners to share in these continental successes. The new system thus inaugurated a new era of equality of status between the London and Paris houses, with Vienna reviving while Frankfurt and Naples declined in their influence.

    As in the past, it was not only through partnership agreements and wills that the Rothschilds maintained the integrity of the family firm. Endogamy continued to play a crucial role. The period between 1848 and 1877 saw no fewer than nine marriages within the family, the manifest purpose of which was to strengthen the links between the different branches. In 1849 Carl's third son Wilhelm Carl married his cousin Anselm's second daughter Hannah Mathilde; a year later, his brother Adolph married her sister Julie; and in 1857 James's eldest son Alphonse married his cousin Lionel's daughter Leonora at Gunnersbury. To list the rest here would be tedious. With a single exception in the years before 1873, those who did not marry other Rothschilds did not stray far from the Jewish "cousinhood." In 1850 Mayer married Juliana Cohen—defeating a rival suit from Joseph Montefiore—while his nephew Gustave married Cécile Anspach in 1859. If Wilhelm Carl had not married a Rothschild, he would have married a Schnapper—a member of his grandmother Gutle's family.

    The brokering of these alliances was, as it had been for nearly two generations, a major preoccupation of the female members of the family. Charlotte made no bones about their rationale. As she enthused on hearing of her brother Wilhelm Carl's engagement to Hannah Mathilde, "My good parents will certainly be pleased that he has not chosen a stranger. For us Jews, and particularly for us Rothschilds, it is better not to come into contact with other families, as it always leads to unpleasantness and costs money." The idea that either the pious groom or the musical bride was making a spontaneous choice was, in this case, nonsense. Charlotte's cousin Betty saw the match in a very different light, reporting to her son that "poor Mathilde only determined regretfully to marry Willy." Now she was "preparing herself with a truly angelic resignation for the sacrifice of her young heart's dearest illusions. It has to be said that the prospect of being Willy's lifelong companion wouldn't entice a young woman brought up as she has been and blessed with a cultivated mind." The question which remained to be resolved was whom Betty's sons Alphonse and Gustave should marry. It seems that Hannah Mathilde had in fact set her heart on the latter, while her sister Julie had hoped to marry Alphonse. But, after teasing her son on the subject, Betty reported that:

Papa, frank and honest man that he is ... brought up the subject without beating about the bush. He expressed all his regrets to the poor mother ... and he undeceived her of illusions that the desire for success might encourage wrongly, and he asked her in her own interest and for the happiness of her daughter to look elsewhere.

    This was good news for Charlotte, who was planning a similar double match between Betty's sons and her daughters Leonora and Evelina. In her diary, she coolly weighed up the respective merits of the two putative sons-in-law:

Gustave is an excellent young man. He has the best and warmest heart and is deeply devoted to his parents, brothers and sisters and relatives. He has a strongly developed sense of duty and his obedience could serve as an example to all young people of his generation. Whether he is talented or not, I could not in all honesty say. He has enjoyed the great benefits and advantages of a good education, but is, he claims, stupid, easily intimidated and unable to string ten words together in the company of strangers. They say he has acquired considerable skill in mathematics but I am ignorant of that subject and cannot pass judgement.

His brother, Alphonse, combines the extraordinary energy and vitality of our uncle [James] with Betty's facility for languages. He is a good reader, listener and observer and he remembers everything he absorbs. He can converse on the topics of the day with an easy manner, without pedantry, but always in a direct, penetrating and amusing way, touching upon every subject in the most agreeable fashion. He cannot be relied upon for an opinion, since he never voices one, indeed, perhaps does not have opinions; but it is a pleasure to hear him, for he speaks without emotion in the most engaging and lively tone.

Mrs Disraeli calls Gustave handsome; I do not know whether I agree with her. He is the only one of the Jacobean line who can boast this advantage with his large, soft, blue-green eyes. In his early years they were apparently weak like all the Rothschild eyes, but now there is no trace of the childhood trouble, except a certain quality which one might almost call languishing. His eyebrows are finely drawn; his brow well formed, fair and clear; he has a full head of dark brown, silky hair; his nose is not oriental; he has a large mouth which, however, cannot be praised on account of its expression which is good natured at best and reveals neither understanding nor depth of feeling. Gustave is slim, his bearing is easy and his manners those of the highest society. I should like to see his profile at the altar.

    She was only half-successful: nine years later it was Alphonse's profile she saw at the altar, alongside her daughter Leonora. By that time, moreover, she had revised her opinion of the bridegroom. Now he seemed "a man, who perhaps for ten of fifteen years has run the round of the world—is completely blasé, can neither admire nor love—and yet demands the entire devotion of his bride, her slavish devotion." Still, she concluded, it was "better so—the man whose passions are dead, whose feelings have lost all freshness, all depth, is likely to prove a safe husband, and the wife will probably find happiness in the discharge, in the fulfilment of her duties. Her disenchantment will be bitter but not lasting." In any case, her daughter attached "much importance to a certain position in the world, and would not like to descend from what she fancies to be the throne of the R's to be the bride of a humbler man." Such sentiments were doubtless based on Charlotte's own experience, and tell us much about the distinctive quality of such arranged marriages.

    The extent to which parental choice was decisive should not, of course, be exaggerated. The fact that Charlotte failed to secure Alphonse's brother for her other daughter suggests that parents were less able to impose their choices of spouse on their children than had previously been the case. Anselm's daughter Julie also successfully repelled the advances of her cousin Wilhelm Carl, as well as those of a more distant relation, Nathaniel Montefiore. On the other hand, her final "choice" of Adolph was strictly governed by her father and future father-in-law, who spent months drawing up the marriage contract; and although such negotiations often involved sums of money being settled individually on the bride-to-be to give her a measure of financial independence, this should not be mistaken for some sort of proto-feminism. There were limits to what the Rothschilds were prepared to inflict on their daughters, as became apparent when old Amschel announced shortly after his wife's death that he wished to remarry none other than his own grand-niece, the much sought-after Julie (who was not yet twenty). The rest of the family—backed up by his doctors—closed ranks against this idea. But it is not known how far their opposition was actuated by fears for his health as opposed to the happiness of the young lady in question: James for one appears to have worried that, if Amschel's proposal were rejected too abruptly, he might withdraw his capital from the firm and marry a stranger.

The Orthodox and the Rearmed

As Charlotte emphasised, endogamy continued to be partly a function of the Rothschilds' Judaism: the family policy remained that sons and daughters could not marry outside their faith (even if they were socially so superior to their co-religionists that they could not marry outside the family either). The extent of Rothschild religious commitment in this period should not be underestimated: if anything, it was greater than had been the case in the 1820s and 1830s, and this was another important source of familial unity in the period after 1848. James continued to be the least strict in his observance. "Well, I wish you a hearty good Sabbath," he wrote to his nephews and son in 1847. "I hope you are having a good time and a good hunt. Are you eating well, drinking well and sleeping well as is the wish of your loving uncle and father?" As the existence of such a letter itself testifies, he saw nothing wrong with being at his desk on the Sabbath. He and Carl also were conspicuously erratic in their attendance at synagogue (unlike their wives).

    Yet James remained as firmly convinced of the functional importance of the family's Jewish identity as he had been in the days of Hannah Mayer's apostasy. Although he very nearly forgot the date of Passover in 1850, he was nevertheless willing to cancel a business trip to London in order to read the Haggadah. He was happy to receive the Frankfurt rabbi Leopold Stein's new book in 1860 (though the size of the donation he sent Stein is not recorded). His wife Betty was as secular-minded as her husband, but she too had a strong sense that observance was a social if not a spiritual imperative. When she heard that her son Alphonse had attended the synagogue in New York, she declared herself "over the moon," adding:

It's good thing, my good son, not only out of religious feeling, but out of patriotism, which in our high position is a stimulus to those who might forget it and encouraging to those who remain firmly attached to it. That way you reconcile those who might blame us even while they think as we do, and make sure you have the high esteem of those who hold different beliefs.

That said, it was evidently something of a surprise to her that Alphonse had gone to the synagogue of his own volition.

    Wilhelm Carl meanwhile remained the only Orthodox member of the younger generation. Continuing his uncle Amschel's campaign against the Reformist tendencies of the Frankfurt community, he supported the creation of a new Israelite Religious Community for Orthodox believers, donating the lion's share of the funds to build a new synagogue in the Schützenstrasse. Yet he opposed the outright schism advocated by the new community's rabbi, Samson Raphael Hirsch, who wished his followers to withdraw altogether from the main Frankfurt community. Orthodox though he was, Wilhelm Carl shared the Rothschild view that diversity of practice should not compromise Jewish communal unity.

    His English cousins also continued to consider themselves "good Israelites," observing holy days and avoiding work on the Sabbath. James once teased Anthony when he was visiting Paris that he liked to pick up his prayer books, an impression of piety confirmed when his nephew dutifully fasted at Yom Kippur in 1849, despite fearing (wrongly) that it was medically inadvisable given the outbreak of cholera then sweeping Paris. It was typical that he and Lionel had to supply not with matzot when he was in Paris during Passover. Even when on holiday in Brighton, Lionel and his family celebrated Yom Kippur, fasting and praying on the Day of Atonement. But the four London-born brothers were not Orthodox in the way that Wilhelm Carl was. In 1851 Disraeli unthinkingly sent Charlotte and Lionel a large joint of venison he had been given by the Duke of Portland:

Not knowing what to do with it, with our establishment breaking up, I thought I had made a happy hit & sent it to Madame Rothschild (as we have dined there so often, & they never with us) it never striking me for an instant that it was an unclean meat, wh[ich] I fear it is. How[ever] as I mentioned the donor & they love Lords... I think they will swallow it.

He seems to have been right, though it seems unlikely that this was a reflection of love for the aristocracy; the fact was that Lionel's family, like James's, did not keep strict kosher. Indeed, Mayer was such an enthusiast for venison that he defended stag hunting in a political speech at Folkestone in 1866!

   On broader religious questions, the English brothers inclined towards the Reform movement, such as it was in England. When an attempt was made (in 1853) to exclude representatives of the Reform-inclined West London Synagogue from their places on the Board of Deputies because they had fallen foul of the conservative Chief Rabbi, Lionel spoke out against what he called "popery." "He had every respect for the ecclesiastical authorities," he declared, "but he was not going to be led by them as by a Catholic priest. They might be, and no doubt were, very learned men but they had no right to enquire of him whether he kept one day or two days of the festivals"—an important distinction between Reform and Orthodox practice. Such views may explain why the Reform community in Frankfurt had appealed to Lionel for help in their struggle against the dominant Orthodoxy the previous year.

(Continues...)