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Nathan Mayer Rothschild and the Creation of a Dynasty

STANFORD UNIVERSITY PRESS

Contents

List of Figures and Tables.........................................................ixList of Abbreviations..............................................................xiList of Weights and Measures.......................................................xviiBy Way of a Preface................................................................xixAcknowledgments....................................................................xxiiiPART ONE | THE COHENS AND THE ROTHSCHILDS1. A Marriage of Merchants.........................................................32. From Manchester to London.......................................................21PART TWO | GOLD AND SILVER3. Nathan Mayer Rothschild's Trading Network: 1808-1812............................474. Nathan Mayer Rothschild and Wellington: 1812-1814...............................73PART THREE | BRITISH SUBSIDIES TO THE ALLIED POWERS: 1814-18165. Herries, the Rothschilds, and the Russian.......................................996. Herries, the Rothschilds, and the Royal Mint....................................135By Way of a Conclusion.............................................................175Bibliography.......................................................................179Index..............................................................................187

Chapter One

I have learnt with pleasure that the Arrangements of your connection with the family of Mr. L. B. Cohen are in the hands of the Attornies [sic] which I hope will now be duly arranged.

I beg you to send me without delay a Copie [sic] of all what you and Mr. Cohen agreed together.

-MAYER AMSCHEL ROTHSCHILD to NATHAN MAYER ROTHSCHILD. 10 January 1806.

In the late eighteenth century, Frankfurt am Main had become a significant trade and financial center in northern Europe, owing to external political events and "from a creative entrepreneurial achievement," to which Mayer Amschel Rothschild contributed.

Mayer Amschel Rothschild (1743-1812) was a well-known wealthy Jewish general merchant, dealer in coins, and aspiring banker, who lived most of his adult life in Frankfurt, although he traveled frequently throughout northern Germany to recruit and serve clients. In 1769, the year before his marriage to Gutle, the daughter of Wolf Salomon Schnapper, the Saxony-Meiningen court factor, Rothschild became the court agent [Hoffaktor] to Crown Prince Wilhelm of Hesse-Hanau, the future Elector Wilhelm IX of Hesse-Kassel, who became his most lucrative and illustrious client. The Rothschilds had ten children: five daughters, all of whom made good marriages, and five sons, who together made history.

The most famous was Nathan Mayer Rothschild, the third son, who was born in 1777 in the Judengasse, the Jewish ghetto of Frankfurt. Nothing is known about Nathan's early years in Frankfurt. There are no existing records relating to his rearing, education, or business activities that he may have undertaken with his father. All that is known is that in 1798 he traveled to England and in 1799 he established a mercantile firm in Manchester where he also acted as agent for his father's mercantile house in Frankfurt.

And, during his early years in Manchester, not much is known about Nathan and his business activities. Nathan's "Manchester days between 1799 and 1809 are perhaps the least documented of any phase of his life," according to Bill Williams, an authority on the Jews of Manchester: "Letter and account books provide some evidence of his economic activities as a major cotton merchant on the Manchester Exchange, but apart from a few chance references in the local press little is known of his relationship either to what was then the world's most rapidly expanding industrial city or to its nascent Jewish community."

The most important quality for a merchant to possess in the eighteenth and nineteenth centuries was "character." It meant that he was honest, punctual, responsible, and ethical. It also meant that he could be trusted to make the best, the right, or the most appropriate decision, when confronted with an unexpected circumstance in his business affairs. The evidence is both explicit and implicit that Nathan was not a merchant of character.

The surviving correspondence between Nathan and his father makes it stridently clear that their business methods and ethics were strikingly different. It might be argued that, during those early years, Nathan was disadvantaged because he was not skilled in the English language, the sine qua non for doing business. But clients, friends, and especially his father repeatedly criticized him not simply for his inadequacy in English, which they believed could be remedied by self-education and the employment of a native Englishman, but also for his brusque personal style, his irresponsible bookkeeping practices, and his lack of ethics. Merchants viewed Nathan as a sharp practitioner and did not like dealing with him.

It must have been embarrassing for Mayer Amschel Rothschild to learn that Harman & Co., a distinguished London merchant-banking house with worldwide connections that rivaled Baring Brothers & Co. (London) and Hope & Co. (Amsterdam), would not extend his credit because payment on his account was in arrears owing to his son's laxity. Nathan had regular business dealings with Harman & Co. and from time to time he mixed his father's account with his own. When Nathan failed to balance his father's account with Harman & Co., his father was forced to sell the British securities he had with the firm to pay off his account.

To protect his son and his business investments, Mayer Amschel Rothschild frequently interceded with clients who complained that Nathan had not marked cargo chests/cases correctly; had not sent invoices promptly; had shipped goods not ordered; had sent poor quality merchandise; and had not informed them about when and where they could expect delivery of their orders. The elder Rothschild repeatedly cautioned his son: "all of your correspondents complain, dear Nathan, that you are so disorderly," and "I beg you in the future to take better notice & care to serve your customer [sic], lest you may lose them all."

When clients balked at his practices, Nathan frequently responded as the aggrieved party and accused them of unfair treatment. His relationship with Lyon de Symons, a well-known London general merchant and international diamond trader, who accepted bills of exchange and arranged insurance for his clients, was never smooth. They frequently exchanged testy letters about receipts, bills, and even more serious concerns. De Symons was taken aback when Nathan accused him of speculating in the exchange and for showing "so little confidence" in Nathan by giving him "a credit for 3000 only." On another occasion, Nathan charged that de Symons's Account Current with him had errors. De Symons angrily replied that he would adjust the account only "when You favor me with the particulars," something that was de rigueur in such matters. De Symons declared that, henceforth, he would only carry Rothschild accounts provided: "your good Father & Yourself will mutually guarantee...