The Rothschilds

by John Reeves

"What's in a name?" asks Shakespeare. The answer, when the name is such as Rothschild, is not difficult. There is a volume of meaning in its mere sound. It is a name which conjures up in the imagination visions of untold wealth and unrivalled power, which appear so startling and amazing aa to be more appropriate to romance than real life. It haa become a household word synonymous with unbounded riches, and is as familiar to the ears of the struggling artizan as to those of the banker or trader. No name has, indeed, was so prominently before the public during the late 19th century, as that of this great financial firm. Its origin was so shrouded in humble obscurity, and the rapidity with which it sprang forward to prosperity and fame was alike so extraordinary and so remarkable, that the public gaze has been kept by a species of fascination upon the movements of the well-known financiers. From one corner of the world to the other the success of the Rothschilds has been the subject of universal wonder and envy.

When we recollect the poor beginnings of this eminent firm, and contrast them with the exalted position it now holds, there is good reason to be surprised. History does not record another instance of such unparalleled success, of such immense fortunes won in such a short time by sheer force of intellect rising superior to all adverse circumstances. The firm startled the world like the flash of a meteor, but the brilliance of its first successes was soon eclipsed by its subsequent achievements. The more one considers the marvellous manner in which it won its way to fame and fortune, and how it rose within the short space of ten or fifteen years from the filthy confines of the Judengasse to take its station at the foot of a royal throne, the more incredible the story seems. But facts are stubborn things. There is no denying the fact that at the beginning of the 18th century the Rothschild family was unknown beyond the limits of Frankfort; neither can it be gainsaid that before Napoleon's downfall the firm had rendered immense service both to the Emperor and to the Allied Princes by its advice and its financial aid. Ere a quarter of a century had elapsed the firm which had commenced business in an unpretending shop in the Judengasse was courted and favoured by all the reigning families of Europe. From being dealers in old coins, the founder of the family and his sons rose by their skill and financial abilities to be the trusted and valued friends of the governments of every European nation. And well indeed might they be trusted, seeing that, in more than one instance, their aid was indispensable to ward off impending bankruptcy and disaster. Great, however, as is their fame as skilful financiers, the Rothschilds enjoy a reputation for liberal and unstinted benevolence which does them far greater honour.

Mayer Amschel Rothschild
Anselm Mayer von Rothschild
Nathan Mayer Rothschild
Lionel de Rothschild
About the Jews

The Franfort Firm

Amschel Moses Rothschild

Here, then, in the Judengasse, in the house numbered 152, but better known as the House of the Red Shield (Rothschild)—afterwards adopted as a surname,—lived Amschel Moses Rothschild, earning a livelihood as a dealer in curiosities and old coins. In the course of his business he was in the habit of travelling about the country, hawking his wares and keeping his eyes open in search of curiosities, and an anecdote is related of him tending to show on what a thread the destiny of the family at one time hung. In reproducing this anecdote, we wish it to be understood that we do not attach any value to it ourselves, our object only being to make the narrative as complete as possible. Many of the stories related of the Rothschilds are pure myths, for lively imaginations have placed a halo of romance about their history, as about that of every other person of notoriety, so that implicit credit cannot always be attached to the anecdotes told of the different members of the firm. The story in question is to the effect that Rothschild was one day walking along a country road, when he was overtaken by a brother pedlar in more flourishing circumstances than he himself, seeing that he had an ass to carry his wares. In the course of conversation, Rothschild was invited to relieve himself of his load by placing it on the ass's back: an offer he was glad to accept. On coining to a narrow ravine where the bridge across was formed by a single plank, Rothschild prudently removed his sack from the ass's back to his own shoulders, remarking as he did so:—“Accidents sometimes happen at places like this, and, as this sack contains all my fortune, it is well to be on the safe side.” His comrade laughed at his fears, but Rothschild's prudence was fully justified by events, for no sooner had the ass, followed by his master, reached the middle of the bridge than the plank gave way, and both were precipitated down the chasm. Thus by a miracle Rothschild saved both his life and his money.


The dying injunctions of Mayer Amschel to his five sons were faithfully observed with the filial obedience so characteristic of the Jews. ...After their father's death, [they] started business in five of the European capitals, each brother managing his own, but always acting on important occasions in concert with the others. The result of this union of aims and action was that they all rose simultaneously to fame and fortune, rising, too, with a rapidity which appears incredible. There is one drawback to this principle of combined action for their general benefit—the impossibility of writing a lucid and accurate description of the career of each of the brothers, owing to the impossibility of ascertaining what part each played in the many gigantic operations undertaken and carried out conjointly by all. The business of the Rothschilds since 1812 has been so immense, and the bonds linking the different members of the family together so interwoven, that to unravel them appears well-nigh hopeless. The best course for us to pursue under these circumstances is to give in the first place a clear and concise account of the family, and then to deal with the career of each individual member. By the adoption of this plan we hope to avoid confusing the reader by frequent reference to other portions of the narrative.

The second period in the firm's history dates from 1812 to 1826. On the death of their father, four sons out of the five started each a business of his own, in Paris, Vienna, Naples, and London respectively. The branch in London had, however, existed some time previously, having been founded by Nathan Mayer Rothschild, who saw that Frankfort was too small to afford scope for the operations of himself and his brothers. With his characteristic decision, he resolved to repair to England and win his way to fortune by his own unaided efforts. In subsequent pages we shall detail the business he conducted, and will content ourselves by stating here that the financial ability he displayed was so marvellous that he gained an unprecedented success in the country of his adoption. He contributed largely to the prosperity of the parent firm in Frankfort by inducing the English Government to entrust his father with the payment of its subsidies to its foreign allies. That this was a profitable business may be inferred from the fact that in one year the subsidies amounted to no less than £11,000,000, which must have left a handsome commission in the coffers of the firm. On the death of Mayer Amschel, an exception was made to the rule always since observed by the firm, that the eldest member should be regarded as its head and ruling spirit. The brothers, fully cognizant of his superior intellectual capacity, willingly acknowledged Nathan Mayer as the most fit to direct all their most important transactions. That they acted wisely in doing so, results have proved, as their business began from the year 1812 to assume cosmopolitan proportions, and to pervade all parts of the world. Its operations were of a most gigantic nature, whilst the success it achieved was correspondingly rapid. Its success was indeed so remarkable that the only explanation of it seems to be in the extraordinary vicissitudes and excitement through which many of the European States passed during that period, and of which the Rothschilds took advantage. From 1812 the firm quitted the old conventional paths and struck out a new line of business, which it has made peculiarly its own. Its fortunes and its resources had then grown so large that the old banking operations were no longer worthy of its attention. Government business, such aa issuing State loans and the emission of Government funds, proved more congenial, and no doubt more profitable, so that we find the firm between 1812 and 1830 engaged in the transaction of a series of vast operations, which raised it to a position of power no other firm has ever attained. Its influence was so all-powerful that it was a saying, no war could be undertaken without the assistance of the Rothschilds, since the control exercised by them on the money markets was such that they could effectually withhold or procure the requisite funds.

The inauguration of this new business opened up a new field of industry, if we may so call it, which possessed such attractions in the shape of facilities for making and losing money, that it soon became popular. Every year the business in Government funds increased in value and importance, for the advantages the funds possessed were so many and so great that merchants and persons of every rank and station hastened to invest in them. By the purchase of Government securities the buyer knows he holds the best security for his money, since the credit and solvency of the country are pledged to him, and, as it is of the greatest public importance to preserve these uninjured, so his security is practically safe from destruction. No other way of investing money with equal safety exists, for in private enterprises, in which the security may be goods or landed property, the whole capital may suddenly be lost by fraud, fire, or other accidental causes. Then, again, an investor can rely with certainty on regularly receiving a fixed interest on his capital, whereas, were he to invest his money otherwise, the interest would be dependent on contingencies beyond his control. Another advantage, and a very great one, is that anyone can purchase what amount of Government stock he pleases, and in this way make use of all the money he can command. He is not limited to a round sum, as would be the case if he lent his capital on mortgage, which might demand either a larger or smaller amount than that at his disposal for the time being, but in Government stock he can invest the amount down to the last shilling. Most Government stocks are negotiable in all the leading European markets, so that their popularity may be due in no small measure to their portable and saleable qualities. It is scarcely to be wondered at that the demand for these stocks was for ever increasing, and that the business done in them became in a few years of the greatest importance. In addition to the intrinsic value of the stocks, an additional value was derived from the speculation which took place in them. By the exercise of a certain amount of shrewdness, and aided by good fortune in the choice of the moment for buying or selling, it was possible to make hitherto unheard-of gains. This possibility naturally caussd a general desire to share in such easily-earned profits, and iu this way speculation went on increasing. In the course of time, when the public appetite for investing was no longer appeased by Government funds, stocks and shares of every description were issued and snatched up with avidity. Year after year speculation grew, and gradually degenerated into one vast system of gambling. No objection can be raised to legitimate purchases or sales of stocks, but since the bulk of Stock Exchange business has been based on speculation there can be no doubt that the effects are far from beneficial. When it is possible to make enormous and fabulous gains, with comparatively no exertion, by operations on the Stock Exchange, it would be surprising if many business men were not found to quit the old paths in which their fathers made their fortunes by steady persevering industry, to enter upon one surrounded with such rosy allurements, where failure appears out of the question. The commerce of a country must be affected by this endless speculation, as the. amount of capital sunk in keeping stocks up at fictitious prices must at times be immense. To make matters worse, everything imaginable is done to encourage this speculation. The disclosures recently made in connection with the managers of several of the London banks prove with what ease unscrupulous persons might without means embark in speculations amounting to hundreds of thousands of pounds. How largely chance enters into Stock Exchange operations is shown by the custom of buying or selling stocks for delivery at some future day. A man may perhaps sell an amount of stock now at a certain price to be delivered to the purchaser say a month hence, in which case he trusts to Providence to be able to buy the same amount of stock himself at a lower price before the time expires, and so clear a profit without having really risked any money. Should he buy, then the opposite principle guides his action. As a proof to what extent gambling of this kind is carried, we may mention that in the corn market crops are frequently sold before the seed has even been planted. The facilities offered are so great that speculators enter into operations out of all proportion to their means, for, being anxious to make as large a profit as they can, they are forced to engage in transactions on a gigantic scale. Should their calculations turn out wrong, or the fickle goddess not be amiable, the result is that ruin stares them in the face. But they seldom yield without making a violent effort to turn the tables in their favour. This they try to do in one of two ways: they either plunge deeper into the speculation, trusting by this plan to obtain a control of the market, or they resort to the fabrication of false news, hoping that the effect produced will be such as to once more make prices favourable to their operations. Rumours, lying, and every possible artifice are adopted by those who speculate on the Exchange, and it is certainly not beneficial to public morality that those should frequently succeed best who prove themselves the greatest adepts in this species of mano3uvring. These few explanatory remarks, though perhaps out of place, will enable the reader to understand how practicable it is to acquire rapidly by speculation an enormous fortune, which in the ordinary course of business could be gained only after a life of persevering activity and industry.

The greater part of the Government loans which press so heavily upon the leading European States have been issued through the agency of the great financial and banking houses, at whose head stands the family of Rothschild. Being to a certain extent the originators of this description of business, and possessing such influence on the different European markets, in all of which they had branches or correspondents, it was only natural that the five brothers should manage to secure the goodwill and patronage of the various Governments. We have seen that they issued a series of loans for Denmark between 1804 and 1812, but it was not till tranquillity was restored to Europe in 1815 that the firm was called upon to show the great things of which it was capable. With that year the brothers began a period, lasting for fifteen years, during which they were incessantly engaged in the issue of Government loans. Unvarying success followed them in all their undertakings, and the firm rose to a position of such power and repute in the political and commercial world that they were the dictators of Europe. To give the reader an idea of their power, we may mention that Ferdinand I. of Italy was compelled to accept the condition named by them as the only means of obtaining their aid— the recall and reinstallation in office as Finance Minister of their friend the Chevalier de Medici. And this is no exceptional case; other Governments in their extremity have been forced to agree to the terms dictated by the great financial house. We do not intend to follow and analyze each individual step the Rothschilds made on their road to fame and fortune, but will content ourselves with giving a summary of the leading operations undertaken by them in the course of the second period of their history. According to the Chevalier von Gentz, the annual business of the firm during the twelve years preceding 1826 amounted to no less than eleven or twelve hundred thousand thalers, mostly loans, but partly subsidies. This period was undoubtedly the most prosperous, and at the same time most brilliant, through which the firm has passed. The explanation of this extraordinary activity is easy. The long struggle in which all the European States had been engaged for a quarter of a century, either as the friends or the enemies of Napoleon, had drained the State treasuries of their supplies, whilst the countries were impoverished by the excessive war contributions levied to meet the expenses incidental to the prosecution of the campaigns. When the efforts of the Allies to forcibly shake off the heavy yoke of the Emperor were rewarded with success, and Napoleon placed in a position where he was powerless to threaten the peace of Europe, it was possible to form an estimate of the enormous sacrifices and expense the struggle had cost. Every State, without exception, found itself burdened with debts which seemed to crush its energies and to defy any attempt that might be made to remove them. However, all this was set once more in order and prosperity restored between the years 1815 and 1830; thanks chiefly to the assistance lent by the Rothschilds. According to a careful estimate, the loans negotiated by them during this period for the five great European States, England, Russia, Austria, France, and Prussia, amounted to very nearly one thousand million thalers. Hitherto we have spoken in very general terms of the business of the firm, but it is almost impossible for the reader to form a just conception of the magnitude of the firm's operations without some details being given. We shall therefore proceed to describe a few of the principal loans brought out under the auspices of the Rothschilds. One of the earliest loans contracted for by the Rothschilds was that issued in 1818 for the benefit of the Prussian Government. This loan, better known as the English loan, was for £5,000,000 sterling. The terms on which it was issued were far from favourable to the Government, and gave a good idea of the low state of credit prevailing at the time. The Government guaranteed interest on the loan at the rate of 5 percent. They found, however, that they were utterly unable to obtain a better price than 70 percent. on the first half. The other half was issued, in two portions, at the price of 72i. and 75 respectively, but the whole amount was not applied for. That everything was done to gain the favour of the public is clear, as provision was made to pay off 3 percent. of the loan in the first year, 2^ percent. in the second, 2 in the third, li in the fourth, and 1 percent. in the fifth. In 1830 the remainder of the amount was converted into a Four percent., to redeem which a sinking fund of 1 percent. and the interest accruing from bonds drawn after 1835 were set aside. In 1822 a second English loan of three and a half millions at 5 percent was concluded, and was followed in 1830 by the third Prussian-English loan at 4 percent, of which mention was made above.

Austria found herself compelled, like Prussia, to issue several loans, partly through the agency of the Rothschilds, and partly through them and other banking firms. The first loan was the lottery loan of 1820 for 20,800,000 guldens, contracted for by S.M. von Rothschild, in conjunction with David Parisch. The second followed in 1821, and was for 37i million guldens, in shares of 250 guldens, bearing 5 percent interest. In 1834 Austria negotiated a third loan for 25 million guldens at 4 percent, in shares of 500 guldens, with the firms of Rothschild, Arnstein, Eskeles, Sina, and Gey-miiller and Co. The same firms issued a fourth loan in 1839, amounting to 30 million guldens, in bonds of 250 guldens each.

Russia in 1822 raised a loan of 3| millions sterling through the Rothschilds, and in 1847 France followed suit with a loan of 250 million francs, issued at 75. In 1834 a Greek loan of 66 million francs was issued at 94 percent, whilst in 1831 Belgium floated one for 50 million francs. The operations of the firm were not confined to Europe, as on several occasions the Empire of Brazil sought its assistance—to the extent of £3,200,000 in 1824, and £800,000 in 1829.

In addition to these Government loans, others were issued in large numbers on behalf of the different German principalities. It was thus the Grand Duchy of Hesse obtained in 1825 6| million guldens, and 2,375,000 guldens in 1834. The Duchy of Nassau in 1837 placed a loan of 2,600,000 guldens. Besides these the following loans were issued at different periods. In 1821, for the kingdom of Naples, 16 million ducats, 20 millions in 1822, and £2,500,000 sterling in 1824. The Papal States, 16 million francs in 1831, followed by 2,160,000 francs in 1845. Hesse-Homburg, 1| million guldens, 1829; Hohenzollern-Hechingen, 260,000 guldens in 1829; Sachsen-Coburg-Gotha, 3| million guldens; the Duchy of Lucca, 1,050,000 guldens in 1840, and 1,120,000 in 1843. Baden, in 1840, 1845, 1848, 1849, and 1850, issued loans for 5, 14, 2|, 1|, and If million guldens respectively. Hanover in 1847 had a loan of 3,600,000 thalers; Bavaria, in 1848, 22 million guldens; Hesse, four loans from 1848 to 1851, amounting to 6| million guldens; and Nassau, 1,200,000 guldens in 1849.

The above list is far from complete, but it will suiSce, we think, to convey some impression of the vast proportions and unlimited extent of the business transacted by the Rothschilds since the commencement of their remarkable career. During this second period the reputation and influence of the firm may be said to have reached its zenith. Honours and decorations were showered by grateful Governments upon their benefactors, who were everywhere treated with a deferential consideration a monarch might well envy. In 1815 they were nominated private financial advisers to the Elector of Hesse, and in 1818 appointed members of the aulic commercial council of Prussia. In 1815 the Emperor Francis of Austria conferred upon them an hereditary title of nobility, and in 1822 raised them to the rank of barons. In addition to this the brother in London was appointed at first Consul and then Consul-General for Austria, an honour which his brother likewise enjoyed in Paris. In 1823 Baron James of Paris received the cross of Chevalier of the Legion of Honour, and was afterwards created a Commander of that order. Sir Anthony de Rothschild received his baronetage in 1846, and the title has now descended to Sir Nathaniel de Rothschild (Lord Rothschild), the present head of the London firm.

The third period of the firm's history dates from 1830 to the present time. During the latter part of the second period there occurred in the financial and commercial world that memorable crisis, even now recollected by many as if it were but of yesterday, so terrible was the panic it created. Owing to the abundance of money in the years immediately preceding, some difficulty was experienced in investing capital in good paying undertakings, and by degrees a speculative mania, which reached its climax in 1825, took possession of the public. A collapse ensued, and in 1826 its effects began to be felt, as one by one firms and banks of hitherto undoubted credit and solvability failed. The ruin and distress caused by these failures were widespread, the whole country being more or less affected; and, as is usual in such cases, the evil was felt most by persons who had been led away by the plausibility and specious promises of designing rogues. So great was the blow given to credit, that many firms were brought to the verge of ruin owing to the support of the banks being suddenly withheld. The Bank of England even came in for a share of suspicion, or at least the confidence of its customers was so shaken that a run upon its coffers took place, and threatened at one time to make it close its doors. That this was prevented was, as is well known, largely due to the loyal support rendered the bank by Nathan Mayer Rothschild. Scarcely had credit recovered from this shock, and commerce once more regained its prosperity, than an unexpected blow was struck, and again shook the financial world to its very foundations. In 1830 the French Revolution of July took everyone by surprise, and brought about a period of great uncertainty and anxiety. On this occasion, as in 1826, the Rothschilds rendered great and inestimable services to the public by aiding, with their immense means and credit, many houses threatened with ruin through no fault of their own. There can be no doubt that this bold and public-spirited course of action went far to restore confidence, whilst it certainly added greatly to the repute and honour of the firm. For the next eighteen years after this subversion of things in France, matters remained undisturbed under Louis Philippe, the head and founder of the new dynasty, and Europe enjoyed a period of unbroken repose. And never did the star of the Rothschilds shine with such unrivalled brilliance as during these eighteen years, when their advice was sought for by those in power.

But at the expiration of that time events occurred with equal suddenness, and as little anticipated as those of 1830, which have had a prejudicial effect on the business of the great financial firm. During the period of undisturbed tranquillity through which France passed after the Restoration, time was found to attend to the introduction of much-needed reforms in the Government and Constitution. Necessarily the finances were the first subject to come under review, and in 1848, after a great deal of debating, a reform was made in the system by which the Government had been wont to raise what money it required to borrow, and the hitherto all potent influence of the Rothschilds received a blow from which it has never since recovered. From the beginning of this century the credit of the European Governments had risen steadily. In the early part of the century it was impossible for them to obtain even at 6 percent the money they required, whereas in 1848 no Government would have experienced any difficulty in borrowing what sum they pleased at 4 percent. After the revolution of 1848 the French Government felt convinced they could obtain the money required by the State on easier terms than those previously accepted; they were confident they could procure first hand, without the intervention of any banker, the funds of which they stood in need; they addressed themselves frankly and directly to the people, and the people fully justified the faith reposed in their liberality by placing at the disposal of the Government sums frequently ten times the amount demanded. The quite unexpected success that attended the Government's action has had an immense bearing on the mode in which State finances have since been conducted, and has proved highly beneficial to the State itself, as well as to individual persons. Since that time the immense preliminary profits, in the way of commission, which always went into the banker's pockets, have been abolished, and, whilst the business is conducted far more economically, the intervention of bankers and others is done away with, and the State and its subjects brought into closer contact. The result of the new measures was that all the great banking firms who had been accustomed to undertake loan business for the Government were unable to secure for themselves any advantages not enjoyed by every private person, by every citizen; the old connections with the Government were severed, and thenceforth financiers, banking houses, and citizens were equal. The gilt having been so roughly taken off the gingerbread, the great houses were forced to seek the profits they had been wont to make out of Government business in enterprises of another description. Gradually we find commercial under-

takings engaging the attention of the leading capitalists and bankers.

The new arrangements of the Government were a severe blow to the Rothschilds, who had issued for many years the majority of the loans needed by the different States. From that time forward, from that “mad year 1848,” so detrimental to their interests, the great firm have pursued an entirely new path. They have, for instance, aided in the formation and establishment of every description of industrial enterprises, in railways, mining, and such-like companies, but more especially in banking and credit institutions, all of which formed admirable foundations for speculation. It cannot be denied that the immense and preponderating influence possessed by the Rothschilds up till that time, began to wane when they lost the business which had been regarded as peculiarly their own, and could no longer sway the money market by their nod as of old. They were forced to put themselves on a level with many other great banking and financial firms. In writing thus it must be distinctly understood that we do not mean to say that the pecuniary resources of the firm were in the least affected by the change; their financial position was as strong as ever, but naturally their having been for so long the trusted and favoured agents of the Government had lent their name a certain pomp and splendour which disappeared when the Government determined to act in future without their aid. Backed up as the Eoth- schilds are by the enormous wealth of the whole family, and the immense credit attached to their name, they are able still to make large profits in their enterprises, as they are able to wait until a favourable moment occurs for securing the success of their operations. Nothing proves more strongly the energy and vigour of the firm and their capability of still engaging single-handed in colossal enterprises, than the assistance they have of late years lent the English Government. In 1876, as is well known, they advanced the sum of four million pounds sterling to the British Government, to enable the latter to complete the purchase of Suez Canal shares from the Khedive, and in 1884 they once more responded to an appeal for pecuniary aid, by lending the Egyptian Government a sum amounting to one million sterling. Though perhaps more sedate in its movements than in its earlier years, the great firm shows no sign of decay or weakening of its powers.

The first, and head establishment of the firm, was that founded by Mayer Amschel Rothschild in Frankfort-on-the-Main. It was the only one till 1798, when a second establishment was formed in London, to be followed, in 1812, by that in Paris. These two establishments belong to the first period of the firm's history. In the second period falls the creation of the other great houses, namely, that of the Vienna house, about 1816, and that of the house in Naples, in 1820. At the head of these five houses were the five sons of Mayer Amschel. The eldest, Anselm, directed the affairs of the Frankfort house until his death on the 3rd December, 1855; the third brother, Nathan, guided the fortunes of the London firm until 1836, in which year he died. James de Rothschild, the youngest of the five sons, presided over the destinies of the Paris house; he outlived all his brothers by some ten or twelve years, dying on the 15th November, 1868. Salomon von Rothschild of Vienna, died on the 27th July, 1855, and Carl Mayer de Rothschild, the head of the Naples firm, on the 10th March of the same year. The Naples firm has since ceased to exist, but at the head of the remaining four firms are the descendants of the five brothers. In addition to these great establishments managed by members of the family, there are, in every great capital, agents and representatives who watch vigilantly over its interests, and execute the orders given them.

The political events of this century have had so important a bearing on the fortunes of the Rothschilds that we may be allowed to give a brief summary of the leading incidents which have been so instrumental in promoting the success of the millionaire family. In the first period of the firm's history there occurred a succession of remarkable events which threatened the welfare of many European States. The first to attract attention was the outbreak of the War of Independence in America, a war which terminated so disastrously for the honour of England. But, disastrous as was the end of this outbreak to England, it was not to be compared with the evil and ruinous consequences the first French Revolution entailed upon Prance. Yet, harmful as these episodes were to the countries concerned, they were far from being so prejudicial to the interests of individual persons. To the Rothschilds nothing could have occurred more propitiously than the outbreak of the American revolt, and that of the French Revolution, as the two enabled them by their intimate relations with the Landgrave to lay the foundation of the immense wealth they have since acquired. To this same period belongs the gradual rise of Napoleon, and his elevation to the throne of France, followed at length by hia overthrow and abdication, but not .until he had forced all Europe to acknowledge and tremble beneath his despotic sway. As Napoleon's star sank and disappeared, that of the Rothschilds rose and increased in brilliance. When Napoleon was finally crushed at Waterloo, his star vanished for ever, whilst that of the Rothschilds seemed to grow every day in power and to dwarf all others. The Rothschilds belong to no one nationality, they are cosmopolitan, and, whilst on the one hand they provided supplies for the armies of Napoleon, on the other, they raised loans for his foes, who used the funds thus obtained in defraying the cost of their campaigns against him; they belonged to no party, they were ready to grow rich at the expense of friends and foes alike. The fall of Napoleon was the rise of Rothschild. By means of couriers and expresses who brought the great firm news of Napoleon's defeat long before the world generally was in possession of the joyful intelligence, the Rothschilds were able to purchase on a gigantic scale, so that when the news became known and the funds in response to the public joy rose with a bound, the gains accruing from the transactions were unprecedentedly large. From that time forward the house occupied a prominent position in the political world; it was regarded as a power whose opinions must be consulted before any great financial operation was undertaken. From that time forward the co-operation of the firm was sought by all the leading States whenever a loan was required, and to receive such assistance was regarded by the recipients very much as a favour not granted at random. With the French July Revolution the firm entered upon its third period, a period during which the influence and position of the several houses attained a height which would have vastly surprised the old banker, Mayer Amschel. History does not record another instance of any one private firm holding so prominent a position, or exercising such a powerful control over the destinies of nations, as is furnished by the Rothschild family. It is almost impossible to describe their influence upon the history of the last fifty years, for the effect of their actions and advice upon the policies of the different Cabinets is not easily seen, owing to the unobtrusive and undemonstrative way in which they always bore themselves in public affairs. They never held any official Cabinet rank, consequently their opinions were seldom publicly ventilated; but, notwithstanding this, they always enjoyed the full confidence of the different Governments who were forced on more than one occasion to seek the counsel of the powerful financiers. No firm or family has ever figured so prominently in history, and yet no family has been so uniformly quiet and unassuming in its demeanour. It never tries to force the public to adopt its opinions, but is content to bring the weight of its influence to bear privately, in a manner which cannot fail to secure careful consideration to whatever plans or suggestions it may think fit to propose. In France it is well known that Baron James was one of the most trusted and esteemed counsellors of the Bourbons and of the Emperor Napoleon, and it is the same in England, Germany, and Austria. The late Baron Lionel de Rothschild was for many years a member of Parliament, and sat on many of the Committees, where his opinions always commanded respect and attention. Nothing demonstrated so clearly the immense power exercised by the firm aa the guarantee given by Baron Lionel at the conclusion of the Franco-German War to the German Government to maintain the stability of the foreign exchanges—a guarantee which greatly facilitated the payment of the indemnity.

The Rothschilds are not content to allow their influence to rest merely on the possession of boundless wealth; they seek to extend and increase it still further by becoming owners of land on a large scale—a course by which their interests and those of the nation are more closely linked together. In England, France, Germany, and Austria they possess immense estates, and there can be no doubt that the fact of their possessing such an important stake in the continued prosperity of the different countries, leads the public to attach greater weight to their opinions, and greater importance to their proceedings, than would otherwise be the case. One of the largest estates belonging to the family was that acquired by the purchase, in 1844, of the manors of Schillersdorf, Oderberg, and Hultschin, in Ober-Schlesien, near the Austrian frontiers. Schillersdorf was at one time in the hands of the Jesuits, and afterwards passed into those of the von Eichendorff family. This extensive property, which included a number of villages, was at first laid out for agricultural purposes by its new owner, and supplied the beetroot and turnips for the sugar manufactories which were erected on it. Owing to lower taxes and State subsidies, the manufacture of sugar could be carried on much more profitably in Austria than in the Zollverein, and the profits were still further increased by a little artifice which cheated the Government out of part of the duty. A large proportion of the sugar manufactured was for Russian consumption, and, as the manufactory was close to the frontier, the beetroots were brought across in a dried state, as produce for which the duty was a mere trifle. The weight being considerably reduced by this means, a large saving was effected in the duty. The profits derived from the estate were, however, not large enough to please its owner, and it was afterwards split up amongst a number of tenants. In France the Rothschilds have several very large estates and vineyards. Baron Alphonse's chateau at Ferrieres is famed for the brilliant hunting parties that frequently assemble there, and has been the scene of more than one historic meeting. During the siege of Paris it was chosen as the headquarters of Prince Frederick William of Prussia and Prince Bismarck. It was there that Ferry went to negotiate for an armistice, and that the terms of the capitulation were finally arranged. In England the Rothschilds are amongst the largest landowners, and own between them a large part of Buckinghamshire and Hertfordshire, in which counties there is quite a cluster of their estates. Sir Nathaniel de Rothschild owns a fine property at Tring; Mr Leopold de Rothschild has an estate at Ascott, near Leighton Buzzard; Mr Alfred de Rothschild, one at Alton; Lady Anthony de Rothschild, one at Aston Clinton; Baron Ferdinand, from Vienna, one at Waddesden. In addition to these country estates, they each have a palatial town residence, where the most brilliant receptions and most sumptuous dinners are given. There is still to be mentioned the grand old Gun- nersbury House, with its magnificent grounds, where the late Baron Lionel de Rothschild used to reside.

“How has the house of Rothschild amassed such untold wealth?” is a question one is continually striving to answer, but to answer it fully and completely would necessitate our examining and analyzing all the manipulations and undertakings of the great firm from its commencement. It is indeed remarkable that this one firm should have so speculated as not only to have enriched and strengthened itself, but to have risen steadily to a position exalted far above all rivals. The ways and means employed by its members were open to all, and all were at liberty to make what use they pleased of them; but the Rothschilds were ever masters in the art of speculation, and soon outstripped all competitors, and left them far in the rear. Their speculations were at once simple and clear. These masters of finance first laid down the lines of the speculation, and fixed the aim and object of their efforts clearly in their minds, keeping their whole attention fixed on the main points, and never troubling themselves about the details. The manifold and apparently often contradictory manoeuvres effected by the firm were always dictated by an unswerving regard to the object they had in view. Nothing, indeed, was more simple than the mode in which they won their enormous profits. For instance, they issued a loan at a certain price— already, perhaps, 2 or 3 percent. above the contract price. This of itself was a handsome profit to start with, and one which can seldom be secured now, when nearly all first-class loans are brought out on commission. Competition was less keen then, whilst joint-stock banks and kindred institutions were in their infancy. But the public had confidence in the loan, the Stock Exchange was in its favour, and it at once rose to a good premium on its issue price. An ordinary speculator would perhaps have been content with profits such as these, but not so the Rothschilds. They still further multiplied their gains by selling, buying, and reselling continuously the same stocks, until the profits reached, in many cases, an almost incredible figure. Through operations calculated to bring about a fall or a rise, as the case might be, in the prices of particular stocks, the Rothschilds went on unceasingly amassing their millions, and these operations, by the violent fluctuations they produced, formed the basis on which the fortunes of the firm were laid. In order to render these great speculative operations successful, every means at their command was employed. Every method that could be devised was resorted to; every Stock Exchange manoeuvre and artifice called into requisition; every sort of rumour and false news promulgated; and money in large and small sums sacrificed to secure the success of their achemes. This, then, was how the earlier Rothschilds amassed their millions, which the present representatives strive to keep and augment steadily and cautiously, without grasping at the handsome, old-fashioned profits of by-gone days.

The greatest gains are made during times of great excitement, when war is imminent, or when a political crisis paralyzes trade and fills the public with anxiety and doubt. To obtain early and previous warning of such weighty occurrences is of the most vital importance to speculators, because, possessed of such information, they are often enabled to steal a march on their rivals and turn their knowledge to profitable account. To gain a start of a few minutes is of immense consequence, making a difference of perhaps thousands of pounds, and, certainly, in this sense, time is unquestionably money, for the fortune or ruin of many on the Stock Exchange is decided in a few moments. Knowing this, it has always been the first care of the Rothschilds to secure the earliest information possible of all such weighty events, more particularly of those in the sphere of politics, and it is especially their interest to discover and favour persons who, owing to their position in official or business circles, are likely to receive the earliest news of occurrences of that description. In addition to their agents and informants in political and official circles, they had in every great capital throughout the world representatives whose duty it was to hunt up and report all that was going on of a nature likely to affect the money market directly or indirectly. The excellence of their system of obtaining early information of passing events has been proved on many occasions, and they have been the first to furnish the Governments with details of more than one occurrence long before the reports reached them through official and privileged channels. The expresses and couriers of the Rothschilds tore along at break-neck speed, as if on a matter of life and death, whilst the Government couriers were content with journeying by comparatively short and easy stages. The news of Napoleon's defeat at Waterloo was, as already stated, known to the Rothschilds several days before the public learned the joyful tidings, and Lord Aberdeen was indebted to them for the first information re-

garding the outbreak of the French July Revolu- tion. Then, again, the position they held with respect to the Continental railways was greatly in their favour. They were the “Hudsons” of the Continent; all the leading lines were of their creation, and at their disposal. This gave them an immense advantage, and it was nothing unusual when important news reached them to despatch a special locomotive with a courier to communicate the news as speedily as possible to their other houses. After the invention of the telegraph the capabilities and advantages of the new means of communication were readily appreciated by them, and most extensively employed to promote the success of their operations. It is indeed scarcely surprising, when the odds were so much in their favour, that their career should have been an almost unbroken success. It happened, of course, at times that their anticipations were disappointed, that their information proved incorrect, and that their calculations were upset; but such an occurrence was rare and exceptional.

The success of the Rothschild family is ascribed by the Chevalier von Gentz, an intimate personal friend of Baron Salomon von Rothschild, of Vienna,, and consequently well qualified to form an opinion, to two causes, which he specifies in the following terms:—" The question how the house of Roth* schild has been able to undertake and carry through in so short a time all that it has really accomplished has exercised the brains of many a business and political head. Perhaps, however, the answer is not so difficult as it is generally thought to be. He who, without waiting upon chance, has sufficient sense to perceive that the issue of all great transactions depends not alone on the choice and use of a favourable moment, but also, and even more, on the rigid adherence to once-recognized fundamental principles, will readily acknowledge that there were two principles especially, of which this firm never lost sight, and to which, combined with prudent management and profitable conjunctures, it is certainly indebted for the greatest share of its present prosperity.

" The first of these principles was that which led the five brothers to conduct all their businesses in a long and unbroken unanimity of aims and interests. This was the injunction left them by their father on his death-bed, and, if a lucky star has stood over them, they have ever remained firm in


their resolve never to prove forgetful of that injunction. Since their father's death, every proposition, no matter from what quarter it came, has been the subject of their united consideration and discussion.


Every operation, even if of only comparative importance, was carried out on a concerted plan, and with the united efforts of all, and all were equal participators in the profits. Though their places of abode have for some years been far apart, even this circumstance failed to destroy the close understanding which exists between the brothers, but rather worked to their advantage, since each, being more thoroughly informed of the state of affairs in the different capitals, was able to prepare and manage so much more effectively the businesses that were to be undertaken by the firm as a body.“In this view the writer is backed by the author of” Society in London,“who is evidently intimately acquainted with the family, and well qualified to express an opinion.” The family genius of the Rothschilds,“says he,” shows itself equally in the understanding they maintain amongst themselves and the relations they establish with all those who can be useful to them. It is only natural that a house divided, as the Rothschilds are, into branches, each branch being a separate dynasty, should have its own little jealousies. There could be no more solid monument to their shrewdness and sagacity than that they should not suffer these jealousies to hold them apart at critical moments when union is strength. Nor do they choose their friends and agents outside themselves with less discrimination, or treat them with less of wise generosity and forbearance. They know exactly whom to select for their purposes, and, once having made their choice, they are loyal to it. Many men are indebted to the Rothschilds for their fortune. No one who has once placed his trust in them, and whom they have found it worth their while to trust, can reproach them with having deserted him."

“The other principle,” continues Von Gentz, " which demands notice, is that which guided them never to strive after extravagant profits in any of their undertakings, but to set limits to their operations, and to render themselves independent, as far as human foresight and wisdom could do so, of the freaks of chance. In the maxim Servare modum, jinemque tenere, lies one of the great secrets of their strength. There can be no doubt that with the means at their command they could, in this or that operation, have raised their profits to a much higher figure. Even if, however, the safety of their undertakings would not have suffered thereby, they would in the long run have gained less than by extending their forces to a larger number of businesses, ever requiring renewal under all kinds of circumstances. To fail in their undertakings was out of the question, for they staked not merely their wealth and their credit, but also the confidence with which the fairness of their demands, the punctuality of their payments, the clearness and simplicity of their plans, together with the clever way in which those plans were carried out, had inspired the various Governments and all the great business firms. What others sought to gain by so-called decisive strokes, which lead to victory on the field of business as on the field of battle, but which also often lead to great reverses, the Rothschilds have won by the happy use of the best principles of commercial strategy; not through boldness, but by prudence and perseverance.

" The personal and moral characters of the five brothers have contributed in no small measure to the success of their enterprises. If he is powerful enough it is not difficult for a man to secure a numerous following on his side, but in the present instance the voices of all parties unite, and the Rothschilds are, as the phrase goes, respected by great and small, not merely on account of their wealth, but for qualities of heart and soul not invariably associated with riches and power. To be always extending their sphere of kindness, to withhold their hand from none in distress, to advance readily to the assistance of all who solicited their aid, no matter to what class they might belong, and ever to bestow their most substantial favour in the kindest and most feeling manner,—these were the ways by which the Rothschilds won the real and well-merited popularity that is theirs, as many thousands of witnesses and whole families will testify. And this beneficence springs from their innate good-nature and humane disposition, and not from calculation. Moreover, they have been so fortunate as not to have raised up a host of enemies along with their host of friends, which is rarely the case with persons who have risen suddenly to wealth and celebrity. It may be truly said that they have disarmed envy itself, and rendered harmless the tongue of slander."

“There is but one power in Europe" said the French writer Weill,” and that is Rothschild. His satellites are a dozen other banking firms; his soldiers, his squires, all respectable men of business and merchants; and his sword is speculation. Rothschild is a consequence that was bound to appear; and, if it had not been a Rothschild, it would have been someone else. He is, however, by no means an accidental consequence, but a primary consequence, called into existence by the principles which have guided the European States since 1813. Rothschild had need of the States to become a Rothschild, while the States on their side required Rothschild. Now, however, he no longer needs the State, but the State still has want of him."

Chapter IV.


HAT the considerations were which guided Mayer Amschel Rothschild when he turned his back upon Hanover to select Frankfort as the place for starting in business on his own account, and for laying the foundations of a fortune which was to eventually attain such colossal proportions, are of course unknown to us, but we may reasonably suppose that his choice was influenced by early associations. Frankfort was his birthplace, and it may be to this circumstance that it is indebted for the immense benefits it derived from the subsequent career of the great family within its walls. There can be no doubt that to the Rothschilds the city of Frankfort owes not only its present importance, but much of its commercial prosperity. In settling in his native town and in starting business there, Mayer Amschel increased the chances in his favour, as he was intimately acquainted with the neighbourhood and the opportunities of making money that were likely to present themselves. But, whatever may have been his motives for returning to and settling in Frankfort, we know that he did, in or about 1770, set up there in a humble way of business as a dealer in old coins, &c., with a capital derived from his savings, and that his industry and honesty were such as to enable him to extend his sphere of action by dealing in works of art, old gold and silver, and, in course of time, to add to these pursuits bullion and bill-broking. Gradually, as he strengthened his position, his business assumed more the nature of an ordinary banking business, which continued to raise the name and repute of the founder as a skilful and fair-dealing financier, in whom every confidence could be safely reposed. Little could Mayer Amschel have anticipated that the humble shop was destined to ultimately grow into one of the largest and most renowned banking firms of the world, and that his sons would in after years come to exercise such an unbounded sway that the peace of nations would depend upon their nod; that the powerful control they exercised on the European money markets would enable them to pose as the arbiters of peace and war, since they could at their pleasure .withhold or furnish the pecuniary means required to carry on a campaign. But this, incredible as it may seem, was what their vast influence, combined with their enormous wealth and unlimited credit, enabled them to do, for no firms existed strong enough to oppose them for any length of time, or rash enough to take up a business which the Rothschilds had refused. To reach this exalted position Mayer Amschel and his sons required the co-operation of the States, but, when once he had climbed over their backs and reached the height of his ambition, he was independent of all aid and could act with the greatest freedom, whilst the States remained in a suppliant attitude at his feet.

The house of Rothschild when at the summit of its might was the ruling power in Europe, for all the political powers were willing to acknowledge the sway of the great financial despot, and, like obedient vassals, to pay their tribute without a murmur.

Frankfort, the birthplace of this great firm, derives its name from a fort built by the Romans on the banks of the Main, to guard the frontiers and to resist the incursions of the Goths, on the opposite bank, who, though daring enough in hand-to-hand contests, shrank from attacking an enemy hidden in a fort surrounded by high ramparts and deep ditches. By what Roman general Frankfort was built is not, we believe, known, but during the reign of Charlemagne the place acquired additional importance from the palace constructed there by that great warrior, who brought quite a colony in his train. The Romer, or town-hall, is probably part of this palace, which was erected on the same plans as that at Aix-la-Chapelle. The natural advantages which Frankfort possessed, from its favourable situation on the banks of the navigable Main, and the fruitfulness of the neighbourhood, were all conducive from an early date to the growth of its trade. The whole of the commerce of Germany was at that time of the smallest, and Frankfort was but a poor place, with an inconsiderable traffic, until the bright thought struck Charlemagne of uniting the Main with the Donau by a canal, thus enabling merchandise to be brought from Constantinople and the East directly into the heart of Germany. In order to attract thither people from other parts of Germany, and foreigners from other countries, he instituted yearly markets which afterwards gave rise to the famous fairs. In the midst of endless feuds between rapacious neighbours and rieving knights, and in spite of the disturbed times, Frankfort continued to grow in prosperity and importance, which were still further favoured and fostered by several laws, passed with a view to providing escorts and protection to all visitors and traders—for the emperors saw and recognized of what vast moment trade was to the public welfare. Warehouses, granaries, and shops were built in large numbers, and Frederick II. showed how greatly he appreciated the advantages of trade by granting the city a charter fof its autumn fair, a privilege still further extended by Ludovic II., who contributed largely to the prosperity and consequence of Frankfort by the many diets he held there. There are numerous proofs existing to show that the power and influence of Frankfort during the Middle Ages was considerable. Cologne and Strasburg were its only business rivals. These three towns were by far the greatest centres of trade in that part of Germany. In wealth Frankfort was inferior to few, whilst its dignity cannot have been small when it took precedence of stately Nuremberg at the coronation of Maximilian I. The Golden Bulls of the Pope declared that the Roman elections should always be held in Frankfort, and this cannot have failed to favour the fortunes of the city, necessitating as it did splendid pageants and sumptuous banquets which made money flow freely into the pockets of the worthy citizens. In the course of time patents and privileges of all kinds tending to foster and encourage trade were conferred upon the city, and in 1510 the right of coining money was conceded to it by the emperor. The powerful Hanseatic League had broken down, and the fetters which it had kept on commercial activity in Germany were removed. Frankfort was immediately sensible of the beneficial effects of the change, as Nuremberg began to send thither part of its manufactures, Augsburg its cloth and silk goods, and Ulm its linen and cotton goods. Even Aix-la-Chapelle and Dortmund entered into business relations with their young rival, who soon outstripped them in the race for first place, and continued to grow in consideration and wealth. The discovery of America was turned to profitable account, as the merchants and traders of Frankfort were among the first who endeavoured to extend their business relations to the New World. Trade in Frankfort during the early part of the seventeenth century had been severely affected by the war, but towards the latter part it began to make rapid progress towards recovery, owing, no doubt, in a great measure to the famous fairs which attracted men of business from all parts of Europe. The rapid revival of its trade was still further promoted by the disappearance of the Hanseatic League, which had till then enjoyed a monopoly of the English cloth trade. This, however, now passed out of the hands of its traders, as a direct market was found for English goods in Frankfort. The wine trade wa“s equally flourishing, for Rhenish wines were highly esteemed in all parts of Europe. At this period a new branch of industry was started and rapidly extended by the enterprising traders—the trade in books. In a comparatively short time, owing to the extensive printing works which were erected, the book trade of Frankfort assumed enormous proportions. The great autumn fair soon came to be recognized as the lagest book fair on the Continent, for it was the rendezvous of booksellers and dealers from all parts of Europe. The concourse of persons attracted by the fair is said to have numbered as many as 400,000, so that the advantages derived from these monster gatherings must have been of the utmost value to the prosperity of the city. The rapid rise of Frankfort had been watched with bitter jealousy by many of its older rivals, who tried to injure and destroy its trade by all means at their command. How intense was the animosity they cherished against their younger rival is seen from the fact that Nuremberg carried its hatred and envy so far as to forbid its citizens under pain of death from attending the Frankfort fairs. Frankfort, however, shrank from no sacrifice and spared no exertion to secure the safety of its trade. In all its leagues with its neighbours the main condition of its co-operation was the support and protection to be given to the fairs. Everything was done to insure the safety of visitors and their goods, escorts even being provided for that purpose. These famous fairs have evoked the wonder and surprise of many writers, who have borne testimony to their importance by the lavish praise they have bestowed upon them.” The Frankfort fair,“said one,” is the chief of the yearly markets of the world,“whilst another concisely described it as” the world in a nutshell; or the magazine of the Germans.“To the fairs Frankfort is indebted for its first newspaper, the” Messrelationen," which was in existence for some two hundred years. The fairs likewise called into prominence a branch of business, namely, bills of exchange, which has tended greatly to facilitate and develop commercial transactions all over the world. Instead of the inconvenient and cumbrous method of settling every transaction by a money payment, recourse was had to the far more convenient and reasonable plan of paying by the medium of bills of exchange. If some such plan as this had not been adopted the trade of Frankfort could never have gone on increasing as it has done. When dealings had to be settled by a payment in money, they were necessarily on a very restricted scale owing to the immense weight of the coin, to say nothing of the risks that a person would run who was in the habit of carrying about with him large sums in cash. With bills of exchange the risk is greatly reduced, whilst the advantages they offer in transferability and portability are such as to need no demonstration. The fairs, as we have said, brought a vast business to Frankfort, which was moreover a sort of half-way house for the rest of Germany, a large portion of the imports and exports passing through the hands of its merchants. Being then the centre of trade, and doing an immense business in bills of exchange, the Frankfort prices came to be watched and studied with as much care as those of other great commercial centres such as Rotterdam or Antwerp. The importance of the Frankfort Exchange after the Rothschilds had founded their extensive business was vastly increased owing to the intimate connections and vast influence possessed by the firm in the other large cities of Europe. In every large town they have either branches of their own, or active agents who are ever seeking to promote their interests, and ever faithfully reporting to them all that occurs in financial or commercial circles. This goes far to explain the problem how they have been able to amass their immense fortune so rapidly, for it must not be forgotten that the members of the family, while carrying on their respective businesses independently of each other, on all momentous occasions unite their forces for the common benefit, and temporarily poncentrate all their thoughts and energies on achieving the success of the operations in hand. It is hardly strange, therefore, to find that the wheel of fortune, when the family bring their collective wealth and influence to bear in this fashion upon it, should yield to their persuasive efforts and take the direction they desire. On the death of Mayer Amschel, the founder of the firm, the management of the affairs of the Frankfort house naturally passed into the hands of his eldest son, Anselm Mayer, who retained it until his death, which took place on the 6th December, 1855. Anselm Mayer was above all things a man of business, in which his inmost soul seemed concentrated. These words sum up his whole character. But, able and clever as he was, the individuality of his third brother Nathan, the head of the London house, was even more striking in regard to business matters, for he distinguished himself from his elder brother by his unrivalled financial skill and daring, by his greater shrewdness, and by his intuitive power of forecasting the course of either the money market or of politics, all of which gifts he turned to the utmost profit. In a word, Nathan Mayer was a greater financier, a greater speculator and manipulator, and, although self-taught, of more solid and useful acquirements. To the house this was, however, of secondary importance, seeing that the more weighty operations were planned and carried out by all the brothers in concert, whilst the times in which they lived were so eminently favourable to the success of their enterprises that to them they are as much indebted for the sudden growth of their immense wealth and power as to their own abilities and energies. It is here, indeed, that we must seek the explanation of the problem how they have been able in so short a time to extend and develop their business so amazingly. Circumstances, or, in other words, luck was on their side. Not that they trusted blindly to their luck, for they contributed in no small measure to their success by the prudent caution which marked all their dealings, and by the observance of maxims which had been carefully learnt and as carefully practised by all members of the family, and of these maxims the most important was: to seize upon the right moment in all political or commercial crises and turn it to profitable account.




TALY once consisted, like Germany, of a number of separately governed States, which, however, were not as in Germany associated in a general “Bund” or confederation for the protection and support of their common interests. The language was the only link that joined the various Italian States together. In all else they were separated by long-standing hatreds and jealousies, which were the greatest obstacles to the progress and prosperity of the nation. It was these continued feuds and the enmity of Austria that so long barred the way to the formation or development of a united Italy worthy to take a leading part in the affairs of Europe. To establish a branch of their business in the leading State of Naples, when the political condition of the country was so disturbed and uncertain, may at first sight appear to have been a somewhat rash and ill-advised move on the part of the Rothschilds, but a little consideration will show that this step was the result of mature deliberation and shrewd calculation. The very feuds and jealousies so prejudicial to the welfare of the land proved the source of much of the profitable business which the firm afterwards secured. The States were always in need of funds to carry on their wars, and, being well-nigh bankrupt from past campaigns, were forced to seek from other quarters the assistance they required. Besides, the system on which the administration of the finances of most of the States was conducted was so thoroughly rotten that borrowing was perhaps the only way left open to them of meeting the current expenses. The extent of the business transacted by the Naples branch was small compared with that transacted by the houses in Paris and Frankfort, still it was in proportion, perhaps, more lucrative. The number of its clients was limited, but these few clients were regular and frequent applicants for assistance. In addition to this, trade and commerce, favoured by the situation of the country so surrounded by the sea, through the extensive bill business they created, proved no unimportant source of profit to the banker, and over this business Rothschild by virtue of his peculiar relations with the Bourse and the State, held undisputed sway.

During the present century a wonderful transformation has been brought about in the political condition of Italy. Formerly, as we have already said, the numerous states and principalities were divided from each other by continual hostilities and old-established family feuds; to look upon themselves as forming one great people never entered their thoughts, for from their birth all the great princes had been taught that it should be their first duty and absorbing ambition to avenge the insults their family had suffered through the instrumentality of their traditional enemies. To shake hands with their hated rivals, and, for the good of the nation, to live in brotherly amity together, would in their opinion have been dishonourable and infamous. With time, however, these bitter feelings have passed away, for the misfortunes which the various States all suffered in common gradually drew them together, and year by year Italians grew more willing to recognize that they all belonged to one great fatherland, and insensibly yielded to the more elevating inspiration, that one invisible bond of union linked them all together. At length an ardent longing to see the nation rise from its ashes, and like a giant refreshed open out for itself a new path of honour and fame, took possession of many energetic minds, who strove, and ultimately with success, to create a “United Italy.” The story of Mazzini and Garibaldi, and of the association of “Young Italy,” hardly belongs to these pages, and is, after all, too well known to require repetition.

The social conditions ruling in Italy offer the student many an agreeable picture, which he in vain seeks elsewhere. The line which marks the distinction between the nobility and the less favoured orders is not so sharply drawn as in other countries. This is indeed clearly shown by the history of many of the noble Italian houses who rose to their rank from having won wealth and fame as energetic and enterprising merchants; and it is undeniable that the commoners were always highly esteemed, and enjoyed an aristocratic importance which no doubt fostered the opinion, so prevalent in Italy, that it was no disgrace, but rather an honour, for a noble to increase his own wealth and the prosperity of his dependents by commercial enterprises. The nobles and the commoners in Italy were not separated from each other by the haughty pride and the overbearing manners which have in other lands kept the two orders so far apart. This, perhaps, is the reason why the nobility of Italy have furnished so many talented writers and poets, for they were not kept by false pride from the pursuit of knowledge, but displayed a praiseworthy zeal to place themselves on a level with their rivals, of whatever rank, in science or art.

The finances of the Papal State form one of the darkest and most unattractive pages in the history of the country. We shall not carry our review further back than to the period of the first French Revolution. In the year 1790 a small detachment of French troops marched against Rome. Willing or unwilling, the Romans were forced to accept the revolution; the Republic was proclaimed in the Forum, and the French constitution introduced. To the French commander-in-chief at that time the power of a dictator was given. Bills for large amounts were issued upon the richest of the Romans, on whose behalf the French general was kind enough to accept them, and afterwards to compel their payment on penalty of death. Under the extravagant rule of Pius VI. the finances of Rome were in the most deplorable confusion, and the paper money fell to an unusually low value. The French Government entered into a contract with Torlonia, the banker, by which the latter undertook to purchase some millions of such money, which he could issue afterwards at his own risk. The paper was sometimes quoted at ten percent., often only at five, but the public had taken it up at almost double this price in silver, so that Torlonia was not only able to carry out his engagement, but to make an immense profit by the transaction. The Roman system of finances was based on the law of the 19th March, 1801, and the mode of carrying it out on the principles borrowed from France was so utterly bad, that it can be safely affirmed that the financial administration could not well have been worse. The cost of collecting the taxes was enormous, but the peculation and fraud prevailing were indescribable. The treasuries should have been full to overflowing, nevertheless they were empty; the State expected to obtain money at a low interest, but could with difiiculty obtain it even on the most usurious terms. No budget was drawn up, nor were the accounts examined; no one concerned himself with the financial balance-sheet.

Under Sextus V, the income of the Papal Chamber was infinitely less than that contributed by the faithful Catholics all over the world to the Roman spiritual tribunal. The taxes, with the .exception of the direct taxes, were all increased, as the falling off in the revenue became evident; the price of salt was raised, and the lottery established. Loans were called into requisition, the interest on them being gradually reduced from six to three percent., and paper money, which had been so extravagantly issued by the unscrupulous Government of Pius VI, was again put into circulation. When Pius VII. ascended the Papal chair, the people had been drained to their last drop of blood, and, as the paper money had become almost worthless and the credit of the State was gone, it was difficult to see any way out of the impending ruin and bankruptcy. When matters were in this most distressing condition, the financial decree of Cardinal Lante of the 19th March, 1801, was issued. By this the land- tax was fixed according to the register of 1777, and all the other old taxes abolished. A house-tax was imposed, as was one on all loanable capital: foreigners and travellers were also affected by the new regulations, and a succession duty was made law. In addition there were salt and malt-taxes, whilst the same law decreed the reduction of the interest on all the loans to three percent, and the realization of all common lands.

After the abolition of the Roman States in 1809, the French system of taxation was introduced, with some necessary modifications, on this side of the Apennines, the Italian system remaining in force in the provinces on the further side; for instance, the meal-tax was retained in place of the droits reunis, the land-tax was augmented, and registration adopted. When the Papal Government regained possession of their land in 1814, the earlier system of taxation was restored. The motu proprio of the 6th July, 1816, lowered the land-tax about 400,000 scudi, and, after various gradual modifications, the old system was practically restored. The gross receipts were estimated at nine million scudi, though in all probability they did not exceed seven millions.

Previous to the first French Revolution, almost two and a half million Roman florins in Churchdues found their way from the faithful Catholics to the Papal coffers in Homo. To this large sum Spain contributed 640,000 florins, Germany and the Netherlands, 488,800; France, 357,000; Portugal, 260,000; Poland, 180,700; the two Sicilies, 136,170; the other Italian States, 170,000; and Switzerland, 87,000; while about the same amount was received from Northern Europe. These subscriptions in aid of the Head of the Church afterwards showed a great falling off, consequently the financial situation of the State changed gradually for the worse. Since the incorporation of the Papal States by Victor Emmanuel in the kingdom of Italy, they have ceased to have a separate financial system of their own, as the taxes imposed on the rest of the country are enforced in what was formerly the Pope's material dominions.

The expenditure of the Duchy of Parma was estimated, in the year 1854, at two and a half million lire, and its debt at fourteen millions. The latter had been increased in 1827 by a new loan of twelve million lire, which the Duchess arranged through the mediation of the Rothschilds and the firm of Mirabaud and Co., in Milan. In addition to the compulsory loan, issued in 1849, of 2,700,000 lire, Parma was saddled in 1854 with another five percent. loan, voluntary in this case, of 2,470,000 lire, in obligations of 500 and 1,000 lire each. This last loan was secured upon the State property and the private possessions of the ruling family.

The expenditure of the Grand Duchy of Tuscany with Lucca was estimated at five million florins, the receipts at about the same sum, and the bank-note and paper circulation at two million florins. Their joint debt dated first of all from a loan of thirty million Tuscan lire, which was issued in bonds of 1,000 lire, bearing five percent. interest. An additional loan of twelve million lire, in bonds of the same amount, and bearing the same interest as the above, was made in the course of the year 1851, through the intervention of the firm of M. A. Bastogi and Son in Leghorn. As security for this loan the iron mines and foundries belonging to the State were hypothecated. The small three percent. loan, of three millions, concluded towards the end of 1852, in bonds of 2,000 lire, can hardly be reckoned as forming part of the State debt, as it partook more of the nature of a compulsory loan, issued only to meet immediate and pressing wants. We should have passed it over in silence had not the firm of Rothschild taken part in its issue, as they did in both the loans for the Duchy of Lucca in 1836 and 1843, which, after the union of that Duchy to Tuscany, were added to the public debt of the latter State.

The kingdom of Sardinia, with over five million inhabitants, had an old standing debt on which 5,336,393 francs rente were annually paid, and this debt was increased in 1848 and 1849 by the addition of 13,771,680 francs rente, so that at the commencement of 1850 the total debt amounted to 382

*> million francs, costing the State annually 19,108,073

in the way of interest at five percent. In 1850 a loan of 140 millions and a premium loan of 18 millions were found necessary, and were followed in 1851 by one for 3,600,000 francs, all being required by the share Italy took in the campaign of the Western Powers against Russia. The State expenditure in 1847 amounted to 90 million francs; in 1856 it had risen to 139,157,335 francs. Between 1848 and 1856 no less than thirteen new loans were brought out, amounting in the aggregate to 553 millions, and swallowing up yearly thirty million francs in interest. What comparatively little profit the State derived from the loans is seen by the loan of the 12th July, 1850, for eighty millions, which, however, only brought in sixty-four and a half millions. So great was the drain upon the resources of the kingdom, caused by the cost of the army in the Crimean war, that a further loan of thirty millions was found unavoidable and necessary. The Sardinians might well adopt for their motto the well-known saying of the Prussian finance minister, Hansemann: “Freedom costs money,” for the debt by which the State was burdened was out of all proportion to its population. Sardinia, however, was self-reliant and patriotic, and always showed itself ready and willing to respond to the calls made upon it by its rulers. In the case of the loans which were brought out the Sardinians displayed extraordinary unanimity in supporting the Government, for they themselves not unfrequently covered these loans several times over, thus rendering any appeal to the assistance of foreign bankers and nations unnecessary. For instance, in 1849 and 1850, besides providing the annual interest on the large debt already existing, the Sardinians subscribed an additional loan of eighteen millions, and in 1851, when a further loan of eighteen millions was asked for, more than double the amount required was sub-

scribed in a very short time by the native bankers and capitalists alone. Of the many loans brought out by the Rothschild house, only that for eighty millions in 1850, and a second for rather more than sixty-seven millions in 1853, were for the kingdom of Sardinia, whose usual agents for this sort of business were the firms of Barbarous and Tron, Migone in Turin, C. J. Hambro and Sons in London, and the Gebruder Bethmann in Frankfort. The kingdom of Naples, or the Two Sicilies, suffered for a number of years from the evil influence of a bad financial system, combined with the calamities and trials through which it passed. Measures of every sort—from the introduction of new taxes to the sale of the State domains, from the raising of the taxes to compulsory loans—were all tried to effect some alleviation of the State's difficulties after Joachim Murat was deposed and Ferdinand I. ascended the throne. In order to pay the interest on the State debt, loans were repeatedly found necessary. In January, 1821, the yearly rente payable on the debt amounted to three millions eight hundred and eighty-two thousand Neapolitan ducats. In 1822 the Government contracted a loan of sixteen million ducats with the

Rothschilds. This was followed by three successive loans, which Baron Carl von Rothschild, the head of the Naples house, refused positively to undertake, unless his friend the Chevalier Medici, who had been banished to Florence, was recalled and reinstated as Minister of Finance. On this condition, and this only, would Baron Carl assist the Government, as that would be the sole guarantee he could, he said, possibly accept of their fidelity and good intentions. There being no other person at that time capable of assisting the Government, it is almost superfluous to add that his terms were accepted, though not with a very good grace. Medici was once more restored to the favour of the King, and the three loans were issued. The first of these so-called English loans concluded with the Naples house of the Rothschilds, was that of 1821, amounting to sixteen million ducats capital, bearing eight hundred thousand ducats interest; the second loan, bearing interest at five percent., was for twenty million ducats, costing yearly one million rente; the third was that known on several of the European markets under the name of “Rothschild's Bonds,” and was for two million five hundred pounds sterling.

By a decree of the 26th May, 1821, the King. separated the finances of Sicily from those of the kingdom of Naples, and concluded a loan for the benefit of the former for 1,500,000 ounces (4,500,000 ducats), in bonds of 400 ounces to bearer. The interest on this loan was paid through the Rothschilds in Paris.

In 1834 the Papal Government proposed to convert the Papal five percent. debt into a three percent. debt, for which the opportunity seemed highly favourable, seeing that the five percents. were quoted at 102 to 104. To carry out this scheme, Cardinal Tosti, the Papal treasurer, started off to Paris, in order to arrange for a concerted plan of action with several banking firms in that city. At that time the Parisian financial world stood in peculiar relations with the Rothschilds. The notorious omnipotence the latter exercised in all government loan business, not only of France but of other countries, was an intolerable burden to the notabilities of finance, the other bankers, who resolved at length to make an effort to cast it off. Six of the leading houses, namely, J. Hagermann, Andre and Cottier, B. A. Fould and Oppenheim, J. A. Blanc, Colin and Co., Gabr. Odier and Co., and Wells and Co., accordingly combined to form a syndicate to challenge the Rothschilds, enter into spirited competition with them, and if possible shatter the fetters by which the financial world in Paris was bound.

In the first loan, a Sardinian one, arranged on the plan of the Paris State lottery, the syndicate obtained some success, as they managed to wrest this business out of the hands of the Rothschilds. J. Hagermann personally contributed greatly to the success achieved, as, having formerly been established in Genoa, where his firm was acknowledged to be the first and largest, he was on terms of intimacy with the Sardinian minister Caccia, and through him with the firm of Caccia in Paris. The latter, having neither means nor influence enough to carry out the business entrusted to him by his brother, placed it in Hagermann's hands.

The Rothschilds, who were never so forgiving as to allow a rival quietly to outbid them, felt, aa might be expected, annoyed and vexed by this unexpected blow, and were not long before they let the weight of their wrath fall upon the presumptuous confederates by ruining what might under other circumstances have been a profitable transaction, and rendering it a costly and expensive one. The second time the syndicate tried to compete with the despots of the money market, they found that they had challenged a rival whose forces were so immeasurably superior that victory a second time was out of the question.

The fall manipulated by the Rothschilds in the value of French securities reacted upon and affected the prices of the Sardinian stocks, which continued to sink steadily until they reached a heavy discount. This was enough to render the six allies somewhat timid and nervous; still Andre and Cottier saw so clear a profit to be derived from the conversion of the five percents. into three percents., that they at length, after some consultation with their colleagues, declared themselves prepared to despatch an agent to the Papal exchequer to secure the business and ratify the contract. When the agent was admitted to an interview with the secretary of Monsignore Tosti, one of the first questions put to him was the weighty one—What guarantee will the Papal Government have for the due fulfilment of the contract about to be made? To this the agent replied, “The names of the allied Paris bankers,” adding that he was for the moment forbidden to give their names, but that the secret would be divulged after the conclusion of the contract, and in the event of the names not being satisfactory that the contract could bo considered null and void. After the agent had had several conversations with the Cardinal, the matter seemed to be nearing its conclusion. Inviolable secrecy was promised on both sides, but the Papal officials are not remarkable for their discretion or for their fidelity in business matters. Scarcely had the agent quitted Rome than the matter was publicly rumoured about. The Rothschilds, too, through the many influential friends they have among the officials of every government, are always sure to hear of such negotiations, so in this case the Naples house got wind of the proposed financial operation, and at once sent one of the younger partners to Rome. No sooner did he learn the exact position of affairs, than he produced the contract entered into by the Papal Government, when the five percent. loan was undertaken by Rothschild in conjunction with the firm of Torlonia. This contract contained a clause, till then forgotten, by which the Papal chair engaged to enter into no definite treaty for any subsequent loan without giving the Rothschilds previous notice, and also to accord them the preference when their terms were not higher than those offered by other firms.

The earlier loan had been concluded before Tosti had assumed the management of the finance department , consequently he was quite in the dark aa to this important condition in the contract. He and the agent accordingly determined to draw up the conditions of the proposed conversion and leave the Rothschilds and the allied bankers to settle the rest. It was of course to be foreseen that, if the business proposed was lucrative, the Rothschilds would never let it slip from them, and whether it was likely to prove a profitable undertaking they were as well qualified to judge as their adversaries. On the other hand, the only chance left the latter was to undertake the business on much less favourable terms, should the Rothschilds see fit to place themselves in their way. Still, the coalition of the Paris bankers was not to be ignored by the Rothschilds, who might have experienced much annoyance and trouble from the opposition they would have called forth if they had made full use of their privileges and influence to secure the business for themselves. Finally matters were settled in an amicable fashion and a common understanding arranged between all parties with reference to the matter in dispute. Rothschild certainly did not lose by his forbearance, whilst the rivals learnt that their strength was still far too weak to damage the sway of the millionaire financier.

It is unnecessary almost to add that Baron Carl von Rothschild, for the many valuable services rendered to the Italian States and Princes, both by loans or by advances of money, was honoured with titles and orders of every description. He died on the llth March, 1855. The business was for some years continued by his son, Baron Adolphe de Rothschild, who, however, soon tired of the anxiety and responsibility attaching to the management of so large a concern. Being of a nervous disposition, he could not hear without fear and alarm the rumours of the internal troubles which threatened Italy, and like a wise man, blessed with a handsome fortune, he retired from public affairs to enjoy the comforts and repose of private life.

The Rothschilds: the financial rulers of nations

Chapter VIII.



HE importance Vienna enjoyed from its being the capital of the Empire and the residence of the Emperor and his Court, as well as from the large commerce carried on there, was no doubt the reason which led to the establishment of a separate house of the Rothschilds in the Austrian dominions.

The Jews for centuries played a very distinguished part in the affairs of Austria, and in Vienna especially were to be found in the highest circles of society, possessing not only large influence, but holding also prominent positions among the leading public men. The great consideration and authority they commanded were due simply to their money,, for the finances of the country and the Court had.

got so dreadfully embarrassed and confused that the money of the Jews was as a consequence eagerly sought for and demanded. In spite of the wealth of the aristocracy, the assistance of the accommodating Israelites was continually found necessary, and borrowing and lending were the order of the day. Even in the time of Ferdinand II. the Jews were on intimate relations with the Imperial Court, although they were at that time subject to a poll-tax, and compelled to wear pointed hats and a yellow patch on their left arm, that they might be at once distinguished from the Christian citizens. They were not even allowed to live where they pleased, but were cut off from the Christians and forced to dwell in a particular part of the city, the Leopolds- vorstadt. None the less they were readily tolerated, for they were extremely useful, not to say indispensable, to the Court. They also enjoyed very considerable privileges, and were under the direct protection of the Government. They knew how to amass fortunes by evil as well as honest means, for in the Frankfort Relationen of 1667 it was stated that " Hirschel Mayer had been arrested for having defrauded the Emperor during a period of twenty- three years of no less a sum than two million two

hundred thousand guldens, contributions of his coreligionists.“He was sentenced to life banishment from Vienna, and to the payment of a penalty of seventy thousand guldens. In 1670 the Jews and the students of Vienna had a collision, which terminated in rioting and other excesses, causing the Jews to be driven out and compelled to quit the Judenstadt, or, as it is now called, the Leopoldstadt, whilst their synagogue was converted into a Catholic church. However, it was not long ere the President of the Chamber, Von Sinzendorf, granted them permission to return to their homes. All the financial business with the Court was placed in the hands of the” Court-Factor," Samuel Oppenheimer, a privilege which secured him the deadly hatred of the whole commercial body. This bitter feeling vented itself in 1700, and again in 1706, in a violent tumult, during which his house was attacked and sacked, money and valuables stolen, letters and account-books torn to pieces. The rich Israelite had even some difficulty in escaping alive with his family. Still the lucrative relations he had held with the Court were resumed as before, notwithstanding that his firm became bankrupt in the interval between the two riots. In 1706, however, his affairs were again reviving, as he had secured the contract for supplying the army in Italy during the war of the Spanish succession.

Joseph II., in 1783, astonished, if he did not scandalize, the Christian world, by creating the first Jewish Baron in the person of the banker Joseph Michael Arnstein, whose wife, Fanny Itzig, of Berlin, was a special favourite of the Emperor. During the Congress of Vienna the families of the sovereigns of the money market, Arnstein and Eskeles, were conspicuous above all in the festivals and carnivals which then took place. The wives of both these financiers were natives of Berlin, being daughters of the rich Jewish banker Itzig, a well-known personage during the reign of Frederick the Great. The Austrian Government, not only before, but after the Congress, arranged many important financial operations with these two firms, as well as with several others.

The house of Rothschild, however, after establishing a house of business in Vienna to co-operate with those already existing in Frankfort and London, soon eclipsed all competitors by their enormous wealth and magnificent receptions. With the formation of this new establishment a fresh page opens in the history of the finances and money market of the Austrian empire, owing to the influence and sway exercised by Baron Salomon von Rothschild.

The Austrian empire, consisting as it does of a union of numerous and varied kingdoms and provinces, is one of the greatest confederations of people and nationalities in the world. Under the rule of its distinguished sovereigns Maria Theresa and Joseph II., its importance and power grew in all directions; its revenues and tax-paying capabilities increased and its finances assumed a flourishing aspect. Many of its loans were arranged through the Dutch bankers, Hope and Goll, and through the well-known firm of Bethmann Brothers, in Frankfort. The Austrian funds were in great favour with the public, and generally saleable at par. It was only when the political sky of Austria became overclouded, and when its financial schemes were exhausted that these foreign banking houses withdrew, and in their places appeared the Vienna firms of Fries and Co., Arnstein and Eskeles, Geymiiller and Co., and Steiner and Co. By the agency of these four firms Austria, during the period of the war of the French revolution, and her struggle with Napoleon, contracted a number of loans on terms far less

favourable than formerly. So low indeed had the credit of the empire been brought by the misfortunes and the sufferings incidental to its protracted efforts to oppose the ambition of the French, that the syndicate of the four bankers above named would consent to take up the five percent. loan of 1809 only at a discount of forty percent., and with the State domains pledged to them as security. After having amassed millions by their participation in the various Government loans, as well as through large and lucrative bill business on Augsburg for the Government account, the firm of Steiner and Co. were content to rest on their laurels, and withdrew from the syndicate. Little did Steiner, the head of the firm, a discreet and shrewd man, anticipate that within a few years of his death the millions he had bequeathed his heirs would be all lost or squandered away.

The place formerly occupied in the syndicate by Steiner and Co. was now filled by the firm of Roth- schild, who brought with them new schemes on which to conduct the Government loans. The scheme adopted was the lottery plan, which at once became popular with the public. The amount produced by the loans was soon exhausted, owing to the yearly drawings which formed the leading feature of the innovation. The consequence was that the loans brought out on this plan were constantly being renewed. This the contractors by no means regretted, seeing that their profits were necessarily multiplied, and Stock Exchange speculation promoted. After the overthrow of Napoleon, the Rothschilds acted on principles directly opposed to those on which they had always hitherto proceeded. Their object was apparently to reverse all that they had previously done, and so, whereas they had formerly striven to depreciate the Government funds, they now did their best to force them up in the market. Steadily and by degrees the prices recovered, so that the five percent. loan, which we have said was issued at a loss of forty percent., was eventually redeemed at 106 to 109. The difference between these two prices was not at all a bad profit for the Rothschilds to realize as the result of their operations. Not so fortunate was the firm of Fries and Co. in its association with the Government loans. Although the only son, Count Fries, inherited some six or eight million guldens and through his bill business gained a hundred thousand annually, he was nevertheless forced in 1824 to abandon the Court and Vienna, and fly to Paris, where he soon afterwards died. By this catastrophe the remaining members of the syndicate were reduced to the firms of Geymiiller, Arnstein and Eskeles, and Rothschild. Later on they admitted into their ranks the Vienna millionaire and banker Baron Simon George Sina, and these four firms continued to undertake the frequent and endless loans which the Government were forced to solicit from its subjects. The two brothers Geymiiller, by whom the business was founded, had already retired and were living on the fortunes they had gained. The sole head of the firm after their retirement was their nephew Falkner, who subsequently assumed the name Von Geymuller, and whom they had brought up and adopted as a son. He possessed a capital of one million thalers, which, however, he soon ran through, and then made off one night without leaving any clue as to his destination. On the 12th February, 1843, nineteen months after the failure of the firm, a warrant was issued and published for the arrest of the fugitive on a charge of embezzlement. In like manner the brothers Schickh, Steiner's heirs, were advertised, arrested, and brought to trial. At that time nearly all the business firms were imperilled, and shaken to their foundations. The Rothschilds alone met the shock unmoved, deriving additional power and strength from the trials they had so successfully encountered.

Besides this Government business, the Vienna house of the Rothschilds, at the head of which was Baron Salomon von Rothschild, the second son of old Mayer Amschel, was ever ready to embark in enterprise of any sort which promised to prove lucrative. For Prince Esterhazy and many other members of the high Austrian nobility he issued in conjunction with the house in Frankfort many loans, of which we gave particulars in a previous page. He also established a Fire Insurance Company, the shares of which he was able to sell at a handsome premium. In addition to all these enterprises he had his immense bill business, which brought him in a regular and unfailing profit.

In 1836 the firm took over from the Austrian Government the contract for the construction of the railway from Vienna to Bochnia, and before even a sod had been turned or a shovel used the whole of the tw«lve million shares were sold at a premium of fifteen percent. The shares in 1841 had already fallen from 115 to 62, and the Government were compelled to assist the undertaking by an advance


of five millions, but before the end of the year they took into their own hands the completion of the line.

As in all other countries where the Rothschilds were domiciled, so in Vienna, the money market was. completely under the control of the house established there. The prices of the funds and other securities rose or fell according to the pressure or support they received at the hands of Baron Salomon. Every day, from the opening of the Bourse at twelve o'clock to its close at four, he was besieged by brokers and stockjobbers anxious to give him reports of the tendency of the market, and eager to receive a.nd execute his commissions. Speculation in stocks was, however, far from confined to these hours, as long before and long after the Bourse was open the speculators were in the habit of congregating in the well-known caf£ in the Griinangergasse, which establishment was rented by the Stock Exchange folk, and free to the public. Here the dealings and speculations in stocks were carried on without intermission till late at night, for the prices of the funds and shares of every sort were quoted and dealt in as regularly as on the Bourse itself. The transactions were indeed far larger on this unofficial market than on the privileged and recognized Bourse. Rothschild had in his service a stockjobber at a fixed salary of 12,000 guldens, irrespective of his immense commissions. This person used to wait upon Rothschild early every morning, when together they concerted the plans for the day's operations. The stockjobber had his clients and customers not only on the Bourse but also in the “Panduren-Lager,” with whom he concluded his purchases and sales. He kept a number of runners in his employ, whose sole duty it was to run backwards and forwards from him to Rothschild's with reports of all the fluctuations in prices and the disposition of the markets, and to return with orders to be carried out for the purpose of raising or depressing prices as circumstances or convenience dictated. Naturally those speculators and gamblers who were not initiated into his plans fared badly, and were frequently ruined by Rothschild's manipulations. This factotum of Baron Salomon was a poor man when he first became acquainted with the great financier, but it was not long ere he also joined the ranks of the millionaires. So strong were the faith and confidence placed in him, that he was entrusted with the control of affairs and the procuration signature whenever Baron Salomon left Vienna on business or pleasure.

The house of Rothschild played a prominent part in nearly all the great Austrian financial operations. Most of the loans have passed through its hands, and on more than one occasion was the head of the firm consulted with respect to the private fortune of the Imperial family. He was a trusted counsellor with whom family secrets were perfectly safe, and he had always free access to the ministerial Cabinet. Councillor Brentano, of the Finance Department, had indeed formerly been the agent in Trieste of the Frankfort house for its money transactions with the East, but its present agents there are Messrs. Morpurgo and Parente. The energies and influence of the firm were not by any means confined to purely financial matters, for it was known to have been interested in the success of several mining and industrial adventures. It is no secret that the large quicksilver mines of Almaden in Spain are mortgaged to the Rothschilds. These mines are the only rivals worthy of the name with which the Austrian mines in Idria, producing some 3,000 centners annually, have to contend. To prevent any injurious competition between the Spanish and the Austrian mines, an understanding was effected through the all-powerful influence of the Rothschilds. By this understanding the price of both quicksilver and cinnabar was kept up at a certain figure, which was not to be altered unless both parties consented to the change. The agreement, however, has for some years past been null and ineffective, owing to the discovery of immense quicksilver deposits in America—a discovery which has put an end to a uniform price being maintained for any length of time in Europe.

The city of Vienna derived many direct and indirect benefits from the presence of Baron Salomon, as, independently of his noble beneficence and liberality, its general prosperity must have been increased by the immense business introduced by his firm. A very pleasing recognition of his great services was made him in 1843, when the Mayor of Vienna, accompanied by the Austrian ministers von Kolowrat and Hardegg, handed him as a New Year's gift the diploma or deed stating that he had been elected an honorary freeman of the city, as he was prevented by his nationality and religious persuasion from ever becoming a free citizen. This document stated that he had been elected an honorary freeman not only “on account of his services to the monarchy in general, but more especially in recognition of his great and praiseworthy exertions on behalf of the welfare of the city, by means of his quiet and unobtrusive charity, which had won him universal respect and esteem.”

An amusing tale is related of Baron Salomon with reference to a certain Cabby, who it is to be presumed was generally employed by his son,—a great patronizer of cabs, and a very liberal man with his money. It was nothing unusual for him to give the drivers four or five times the amount of their legal fare. On one occasion Baron Salomon after alighting paid the man the legal faro, not a penny more nor less. The Jehu regarded the coin in his open palm with a significant glance, which caused the Baron to inquire whether it was not correct. “Quite correct, and I am much obliged; but your son would have given me three, four, or six times as much.” “Indeed, would he? Well, he has a rich father. I have not.”

As we have already mentioned, the Vienna house issued, now alone, now in conjunction with other firms, several loans on behalf of the Austrian Government. The first of these loans was that of 1820 for twenty million eight hundred thousand guldens, undertaken by the Rothschilds and David Parisch in Vienna. This was issued in tickets of one hundred guldens each, bearing premiums, and was paid off in the regular course of time by the end of 1840, by means of yearly drawings. The success of this loan was due mainly to the great inducement held out to the public in the shape of the large prizes to be won.

The same two firms contracted for the second loan of 1821, amounting to thirty-seven and a half millions, in bonds of 250 guldens, and redeemed by means of fourteen drawings by the end of 1841.

At the close of 1823, Austria opened a loan of twenty-five million guldens with Rothschild, Baring Brothers and Irving and Co., in London. This loan was required to provide the payment of the subsidies of two and a half millions sterling due to England for her defence of Belgium.

Again, on the 1st December, 1829, a loan of twenty-five millions, required to payoff treasury bills, was concluded with Rothschild, Geymiiller and Co., Arnstein and Eskeles, and Sina. In 1834 a further loan of twenty-five millions was issued by these four allied firms, and was followed in 1839 by one of thirty millions. Both these loans were issued on far more favourable terms to the Government than had been the case on previous occasions, the interest payable on the first being five, and on the second four percent.

In 1842 Austria was again forced to seek the assistance of Rothschild and his colleagues, the result being a loan of forty. million guldens, on which the contracting bankers are estimated to have made four millions clear profit.

After the death of Baron Salomon, the business passed into the hands of his son Baron Anselm von Rothschild, who retained the direction until his .death in 1879, when his three sons Ferdinand, Nathan, and Salomon Albert, succeeded him. The two first-named have never taken any active share in its control, preferring to leave the helm wholly and solely in the hands of their youngest brother, Salomon Albert. They were not anxious to face .the worry and responsibility attaching to the management of the firm. Quite satisfied with the possession of a handsome fortune, they, like wise jnen, determined to rest content with what they had and to retire to the enjoyment of the pleasures of society. Baron Ferdinand has long ceased to be an Austrian, having for many years past been an Englishman by the process of naturalization. He married Evelina, the daughter of Baron Lionel do Rothschild, but lost her after one short year of wedded life. Her loss was a severe blow to him, for he was most fondly attached to his young wife. Of late years he has figured prominently as one of the leaders of society. His country house at Waddesdon is the scene, during the summer months, of the most brilliant reunions and garden parties. Scarcely a day passes by without the arrival of parties of distinguished visitors, often including royalty and members of the diplomatic body, who are received and entertained in a truly princely style. Balls, fetes, shooting parties, follow in rapid succession, until the winter season approaches, when Baron Ferdinand returns to his palatial residence in the Rothschild quarter of Mayfair. He now represents the Aylesbury division of Buckinghamshire in Parliament.

Chapter IX.



RANGE for nearly seventy years possessed no permanent form of government; each successive government was of a temporary and provisional character. After the fall of the monarchy attempts of various kinds were made in the way of forming a representative government, and following one upon the other in rapid succession came the Legislative Assembly with an interim government, the Convention with the Reign of Terror, the Directory, the 18th Brumaire with the Three Consuls, Buonaparte and his Consulate, Napoleon I. and the Empire, the first restoration of the Bourbons under Louis XVIII., Napoleon's one hundred days, the second restoration under Charles X., the July dynasty of the Orleans with its immutable ideas, its fall through the revolution of February, the Republic, the Presidency of Lonis Napoleon, Napoleon III., Emperor. Such is the list of the many forms of government to which France has been subjected, varying from the most unbridled despotism to the most extreme licentiousness.

In order to realize the condition of France at the beginning of the present century, and to appreciate fully the boldness and sagacity which led Baron James de Rothschild to found his house in Paris, it will be well to give a few particulars regarding the finances of the country at that time. The first budget proclaimed by Napoleon was that of his Consulate, and it amounted to nearly 600 million francs. On the 20th May, 1804, he was elected under the title of Napoleon I. Emperor of the French, the succession to the imperial purple being limited to his descendants and those of Joseph and Louis Buonaparte. With the exception of some sixteen marshals, one hundred members of the Senate, and the judges, Napoleon could dispose at pleasure of all other appointments, so that it is not surprising that with the army at his back he should have been able to get the crown voted to him by

some three and a half million citizens. In a few years he made himself master of the European continent, thanks to his skill not only in annihilating armies but in overreaching and deceiving cabinets and ministers, thereby preventing any country from arming itself and taking effective measures to resist his progress. When, however, Spain, with Austria and Russia, and at last Prussia and Germany, combined against him, his star of fortune and destiny began to wane. By arbitrary and violent methods he enlarged the limits of the French Empire, denying and destroying the worldly power of the Pope by declaring the Papal States a portion of France, depriving his brother Louis of Brabant, Zealand, and Guelderland, in order to make the valley of the Rhine the frontier line in that direction; then he annexed Holland to France, and finally, on the 10th December, 1810, declared the necessity of extending the empire to the Baltic, and, accordingly, all the sea-coast north of an arbitrary line drawn from the junction of the Lippe with the Rhine to Travemund became French territory. From the Pyrenees to the Baltic, from Texel to Terracina, the great empire reached, while in Spain, Switzerland, Denmark, and Sicily he had

vassals and allies who trembled beneath his sway. In Sweden the succession to the throne had been conferred on a French marshal; Prussia was exhausted; Austria appeared fettered by family ties; only two European Powers withstood and defied the power of France—Russia and England.

However greatly the fame and dominion of the empire had grown abroad, the condition of the country itself was of the worst possible description. The imperial subjects'were burdened and oppressed by all sorts of tyrannical impositions, by taxes which steadily grew in amount, and by a budget yielding a revenue considerably exceeded by the expenditure. In 1804, when France became an empire, the country was by the decree of the 23rd February called upon to face a budget in which the expenditure amounted to no less than 700 million francs. This was for a war year. For a peace year 79 millions would have to be deducted, so that 621 millions would still weigh on the country. In addition must be reckoned the Emperor's civil list, which, with the domains left at his disposal, the appanage of his brothers, and the pay of the grand officers of the Crown, amounted to 30 millions. Included in this, however, were 7 millions for the Emperor's household, so that to the 621 millions we have really to add another 23 millions, to which we must still add the expenses of the Departments, 79 millions; the cost of maintaining the roads, 15; the expense of collecting, 80; the secret police, 5; so that the total expenditure for a peace year may be put down at 823 million francs, or about 376 millions more than under the monarchy. Year by year the budget grew, being estimated in 1809 and 1810 at 740 millions, whilst in the following year it was reckoned at 954 millions. The preparations for the campaign against Russia—the most gigantic military expedition of modern times—swallowed up million after million.

" Napoleon had collected the most powerful army the world ever saw; from all parts of the Continent had he summoned his forces for the struggle; every variety of blood, of complexion, of language, of dress and arms, were to be found in its ranks. The auxiliaries from whole provinces were led through kingdoms that respected his arms; the artillery of entire fortresses ploughed across the fields; cattle from a thousand hills were collected for the support of myriads who spread themselves like a plague across the plains of eastern Europe, where blood flowed in streams, and where the earth became blanched with the men's bodies. But this gigantic expedition, although successful, gained no object, since the enemy was vanquished, but the conqueror in vain tried to secure peace. The ancient capital of the Czars in Moscow was in his power, but the capture was profitless to him, owing to the refusal of the enemy to come to peaceful terms, and the barrenness of the neighbourhood. The burning of Moscow in one night began Napoleon's downfall, which the frost of a second completed. Upon all the pomp and material of numerous warriors, upon their cavalry, their cannons, their magazines, and their baggage fell thickly and steadily the snow- flakes of a northern night; the retreat of the armed hordes was cut off, and their destruction as effectually achieved as if it had been on the battle-field. All Napoleon's endeavours to regain his lost power were never able to remedy the effect of that Russian night. The fire of his genius still burned as brightly as ever; in two campaigns his efforts were superhuman; his resources were even more remarkable than before; his courage deserved the reward and prize of victory for which he played—but all was in vain. The weapons remained only a short time longer in his hand; his army was scattered to the winds; his opponents no longer bowed beneath his superior nature, for they discovered that he, like themselves, could be conquered, and they in their turn became bold. Such was the great captain, and such the destiny into which he plunged.

" A mighty genius of the first rank; one of the greatest masters in the art of war, he occupies a place among the generals of the highest class. His genius, however, was not confined to war. In the circumstances of government he showed himself equally sharp—as quick in deciding his procedure in politics as in the field. But with all these qualities he was a conqueror, he was a tyrant.

“In order to appease his thirst for power, in order to satisfy his ambition for empire—an ambition no conquest could still—he trod freedom beneath his feet. He enveloped the world in flames, which the blood of millions was unable to extinguish. Honesty, truth, pity, and sense of duty were cast aside by him, who pursued a single and selfish policy. Enghien's death, Wright's horrible sufferings, Pichegru's mysterious death, Palm's punishment, Toussaint's martyrdom, are all blots on his fame.”

Equally characteristic is the opinion of Lord Brougham concerning him:—“He sacrificed to his ambition three milliards in money as the acknowledged cost of the wars of 1802-1814 to France alone, and five-sixths of three million men, who were called out for active service.”

Following upon his memorable campaign against Russia and his disastrous retreat came his dethronement and banishment to Elba, whence he issued to try his fortune once more against the whole of Europe. The sequel to this attempt is too well known to need repetition, leading as it did to his final overthrow, and to the restoration of Bourbon rule in France, with a constitutional government, under Louis XVIII.

When the Chambers met for the first time after the restoration, Montesquieu laid before them a report of the condition of the country, describing in very striking language the evils arising from the imperial form of government. Still more gloomy was the picture painted by the Minister of Finance of the State's finances and requirements. The arrears amounted to more than 1,308 millions, which, however, were afterwards reduced to 759. The funded debt amounted to only 93 millions. To provide means to discharge these liabilities, it was decided to sell the domain forests and common lands. The abnormal and provisional budget of 1814, and the normal budget of 1815, estimating the receipts at 618 million francs, and the expenditure at 547 millions, were passed on the 23rd September, 1814; the civil list of 33 millions, and an additional vote of 30 millions for the debts incurred by the Bourbons abroad since their expulsion, were likewise voted.

Then came Napoleon's sensational return, with his brief enjoyment of power, cut short by the efforts of the allied forces. Nearly a million foreign troops entered the French territory, and demanded an indemnity of 100 million francs at the expiration of the one hundred days. The budget for 1816 estimated the ordinary expenditure at 548 millions, and the extraordinary expenditure at 290 millions, in addition to that for the Consolidated Fund of 125,500,000 francs. Taken all in all, the expenditure amounted to 1,069,261,826 francs as given in the law of the 25th March, 1817. The indemnity of a milliard francs claimed by the emigrants, and the war indemnity of 700 millions claimed by the Allied Powers, were enormous items in the State accounts, in addition to the cost of maintaining the foreign army of occupation for five years.

In the following years both the receipts and the expenditure rose and fell. In 1824 the Chambers put the civil list for the King at 25 millions, and that for the Princes at 7 millions. The budget grew steadily under the different ministries until the July revolution. Under Martignac in 1828 the expenditure was estimated at 980 million francs, whilst the receipts reached only 986 millions. During the reign of the Orleans family the State finances, in spite of the enormous receipts, were far from flourishing. The indirect taxes exceeded a total of 12 milliard francs, whilst the yearly expenditure amounted to from 1,000 to 1,200 millions. The chief cause of this lay in the lasting “armed peace.” In 1841 a deficit of 1,000 millions was declared. The system followed by Louis Philippe had already brought the country to the verge of a financial crisis. The city of Paris was burdened with a debt, now considerably increased, of 12 millions, and the State budget with a rente of 600,000 francs. The distress among the working classes was fearful; in commercial circles bankruptcy was the order of the day. Under the fraudulent system then generally prevailing persons had carried on business without any capital at their backs, by means of credit, ill-deserved but too readily obtained. The revolution came without any warning to complete the feeling of anxiety and uncertainty prevailing at the time. A provisional government was placed at the head of affairs, and issued decrees one after the other dealing with all subjects, from the abolition of the monarchy down to the assignment of the millions of the civil list to the relief of the working classes. The indebtedness of the State was fearful; the financial disorder unlimited. Even without the revolution a State loan of 600 millions would have been absolutely necessary. There were but two means of saving the newly-created republic—a dictatorship, or in other words, exaction, or credit. If the State had displayed the slightest hesitation in meeting its engagements the word bankruptcy would have been on every lip. Goud- chaux, the Finance Minister, resigned; he felt himself unequal to the difficulties of the situation. A man of ability, capable of manfully grappling with and mastering the dangers of the impending crisis, was above all things required. Garnier-Pages succeeded Goudchaux as Finance Minister. One of his first proceedings, after his accession to office, was to sell the forests belonging to the old civil list. Ha decreed a voluntary loan, but, as the coffers remained empty, he had recourse to the most pitiable of all financial measures: he laid an additional 45 centimes on the four instalments of the direct taxes, a measure which severely hit the already heavily- burdened peasants and the small landowners. The expenditure amounted to 1,700 million francs, and the State debts, which had increased by nearly a million in seven years, to 5 milliards 170 millions. The additional tax brought in 150 millions, whilst the Bank advanced 230 millions upon the State forests. By these means the State was saved from bankruptcy.

Under the Presidency of the Republic, which ere long was converted into the Empire, the indebtedness of the State continued to increase steadily. The war with Russia required one sacrifice after the other. In April, 1856, the State expenditure, the revenues and the State debts were estimated by the Minister of Finance to be as follows:—

“The regular expenditure amounts to 1,598 million francs. The first portion of this consists of the interest on the debt, which takes 342 millions for the dividends, and the redemption of the consolidated debt; lOf millions for the interest on the special loan for canals; oof millions for the interest on the floating debt, the guarantees, and finally 68 millions dette viagere, together 455 million francs. The supplies are 25 millions for the Emperor; If millions for the Princes and Princesses of the Imperial house; 6f millions for the Senate; 2f millions for the Legislative Body, and 3f millions for the Legion of Honour; making in all 38£ millions. The collection of the taxes costs 165 millions; 4 million francs are set apart for the completion of the Louvre.” In a word, taking the population of France at 35 millions, the average contribution per head to the State treasury was about 46 francs for the year 1856.

The fortunes amassed by individuals—bankers and financiers, more particularly—resident in France, or rather in Paris, cannot be described nor estimated. In June, 1848, when the proposed decree for the conversion of the floating debt into a consolidated debt was brought before the National Assembly, a Paris paper, published under the title of “The Organization of Labour,” gave the following details respecting the wealth of the leading houses in Paris:“The firms Laffitte Frere and Delamarre are estimated at 10 millions; Baudon at 12; Rougemont and Lafond at 15; Dourand, De- lessert, Aquirrevengon and Halphen, each at 20; Hottinger and Pellaprat each at 25; Fould at 30; Hoop at 40; Baron Gressulhe at 100; Rothschild at 600 million francs.” The King was put down as worth 800; the Due d'Aumale and Madame Adelaide each at 70; and the Due de Montpensier at 20 millions. According to this estimate the combined wealth of the above well-known banking-houses amounted only to 362 millions, a total which Rothschild exceeded by no less than 238 millions. It was by means of this immense capital at their command that the Rothschilds gained that consideration and influence which no other firm has ever yet equalled or approached.

“Involuntarily,” wrote the “Augsburger Allge- meine Zeitung,” “one is forced to ask the question how it was that the house of Rothschild managed to maintain its distinguished position undisturbed throughout the manifold changes of government in France? The explanation is easy,” continued the .writer: " the house belonged to no political party; the Rothschilds are the friends of the kingdom, of law and of peace, and as such could maintain their preponderating influence equally as well under the heterogeneous ministries of a Decazes, Villele, Martignac, or Polignac, as under the government of Louis Philippe/'

When we remember the disturbed state of Europe in 1812, and how much the Rothschild family had suffered at the hands of Napoleon, we cannot but wonder what could have been the reasons which induced Baron James de Rothschild to determine opening a branch house in the French capital. That he did so in spite of the unpropitious aspect of affairs speaks volumes for both his boldness and foresight. It may have been that he had already made sure of his prospects by having rendered the Emperor some services, for few had more need of financial assistance than Napoleon I., and Baron James, we may presume, was not unwilling to secure himself substantial advantages at the expense of the French nation. This is, of course, all surmise on our part, but, when we recollect that the supplies entrusted by the British Government to Nathan Mayer Rothschild for the army in Spain were conveyed to their destination through France,

The Rothschilds: the financial rulers of nations

it does not seem altogether improbable that Baron James must by some means or other have obtained a certain degree of influence with the French Government, or he could never have executed the business with such success. Money is proverbially all-powerful, and in this case certainly did not belie its reputation. A more favourable period, as events proved, could hardly have been chosen for establishing the new firm in Paris. It was started in 1812. In 1815 Napoleon was deposed and business at once poured in upon Baron James de Rothschild. Thanks to the influence and warm recommendations of the Elector of Hesse, Baron James de Rothschild was empowered to receive the milliard of francs war expenses claimed by the Allied Powers when they entered Paris. In the same way the two milliards war indemnity passed through his hands, and we may feel sure that the transaction was most profitable. For some years afterwards we do not find him engaged in any great financial operation; indeed until 1823 his name is altogether lost sight of. In that year, however, he took up the whole of the French loan at the price of 89 fr. 55 cent., and the “Gentleman's Magazine” in chronicling the occurrence testifies to the confidence and influence enjoyed by the firm, by stating that the immediate effect on the French Rentes was that they rose to 90 frs. 25 cent.

In 1824, the Marquis de Villele, the Minister of Finance at that time, projected the conversion of the whole of the French Five percent. debt into a Three percent. debt. Those who were so disposed could exchange the old Five percent. stock into bonds of the new Three percent. stock by accepting the exchange at the rate of 100 francs new stock for every 75 francs of the old. The whole debt amounted to 3,066,783,560 francs, and it was estimated that perhaps only one-third of the stockholders would accept the conversion; consequently, to satisfy the State creditors, no less than 1,055,556,720 francs would have to be paid them in cash. In order to collect this immense sum, the assistance of all the great financiers on the English, Dutch, and French markets was sought. Subscriptions were received in Paris, London, and Amsterdam by the firms of Baring Brothers, J. Laffitte and Co., and N. M. Rothschild and Sons. A committee under the presidency of Alexander Baring, with Baron James de Rothschild and Jacques Laffitte as his colleagues, was then formed to determine the


conditions to be made with the Minister, on which they would provide the cash required for the redemption of the old Five percent. bonds. Their plan was to sell the new Three percent. stock, as soon as created, at the price of eighty. At this price purchasers would receive 3f percent. interest on their money, and if the paid off debt could only be replaced by bonds of the Three percent. stock purchased at 80, it necessarily followed that the Five percent. stock, before the proposed conversion, would be relatively worth 106.66, in order to yield a corresponding rate of interest.

Operations based on this calculation were accordingly made on the three markets. The capital required in Paris for the conversion was estimated at 1,000 millions. The speculators, thinking that the contractors would not put the new Three percent. stock into circulation under 80, bought in Amsterdam and Frankfort at 81—83^, whilst at the same time immense sales of the French Five percent. debt at the relative price of 106.67 to 110 were effected. Higher prices than these could not be obtained.

Villele's project in order to become law required the sanction of the two Chambers. After a very stormy debate, it passed the Chamber of Deputies by a Ministerial majority of 68. In the Chamber of Peers it encountered a vigorous opposition, secretly promoted by the Viscount de Chateaubriand, who harboured a private grudge against Villele. By a majority of 12 votes the proposal was rejected. The Five percents., which the day before were quoted at 106, fell at once to 98, and an extraordinary excitement ruled on the stock markets. Chateaubriand resigned, and the day following at the opening of the market the Five percent. Rentes were dealt in at 104; then they receded again to 98, and remained for some time stationary.

The rejection of the Finance Minister's scheme was a severe blow to speculators, who had operated freely in the anticipation of the conversion being accepted. Those who had bought largely for the settlement were compelled to sell out again at a loss. Baring and Laffitte were severely hit; the Rothschilds, however, emerged from the fray uninjured, owing to their having confined their operations to selling simultaneously large amounts of the new Three percents. and of the old Five percents. As the Three percent. debt was not to be created, none of this stock could be delivered, whilst the Five percent. stock, which they had sold at 104 or more, could be bought in again at 98.

In 1830 the well-known banker, P. J. Ouvrard, in Paris, obtained trustworthy information, a week before their publication, of the coming decrees of the Polignac Ministry, decrees, as is well known, resulting in the July revolution and the fall of the Bourbon dynasty. No sooner was Ouvrard certain of his information, than he summoned to his confidence several bankers and bill brokers, and then hastened to London. On reaching that capital he at once began to effect such heavy sales of stock at ever falling prices that the Rothschilds, who, being among the first purchasers, were interested in the maintenance of the prices, became quite alarmed, and immediately despatched a courier to Paris to learn the real reason of the immense sales that had taken place. The Paris house, however, were no better informed than the London house, and were unable to give the key to the enigma. Baron James, who a few months previously had contracted for the last Government loan of Four percent. Rente at the price of 102 francs 7 cents., at once betook himself, in a state of violent excitement, to Polignac, and requested the Minister to enlighten him as to the real state of affairs. The possibility of the Ministerial decrees being issued had already become a subject of discussion on the Stock Exchange, but no one could speak with any certainty on the matter. When the Baron returned from his interview with the Prime Minister, he made no secret of the fact that the latter had given him his word of honour that the decrees were nothing but an empty scheme which had never been seriously considered, and which would now remain a dream. The next day it became known that they had been signed by Charles X. after mass, and the following day they appeared in print in the columns of the “Moniteur.”

The immediate effect of their publication was that the house of Rothschild and its partners in the transactions found themselves saddled with the whole loan of 78,373,750 francs, which fell to a discount of 20 or 30 percent. For a long time afterwards this stock remained in such bad odour that buyers were difficult to find. The business, however, was far more prejudicial to Rothschild's partners than to Baron James himself, as the bulk of the stock had already been taken off his hands. He was severely reproached at the time for the part he had borne in the business, as it was generally held that he had abandoned his friends and left them helpless; still it must not be forgotten that till the time of the July revolution he had always shared his enormous gains with his partners. That event came quite unawares upon them, and at once changed what had promised to be a most profitable undertaking into a most costly and ruinous one.

Ouvrard had at a stroke won an immense sum, which his broker Amet set down at 2 million francs. As soon as he had carried out his successful combination, he returned from London to Paris and commenced operations. They were all calculated for the fall. As the Rente, even after Casimir Perier joined the Ministry, fell to 52, and in February, 1831, to 48, some slight estimate may be formed of the extraordinary profits Ouvrard must have realized.

It was mainly by the influence of the house of Rothschild that the fall of M. Thiers in 1840 was brought about. Whether right or wrong, Thiers thought he was acting as beseemed a Frenchman, whose only object was to uphold the honour of his country. This consideration, however, never troubled the Rothschilds; for they supported no nationality. They are—although by some the assertion may be opposed.—cosmopolitan, or at least European, neither German, French, English, Italian, Turkish, nor Russian, and, as they possess immense influence in diplomatic circles, they help to maintain peace at the expense of all princes. In his opposition to Thiers Rothschild bore himself as king of the Stock Exchange, and Austrian Consul- General. Thiers in the columns of the “Consti- tutionnel” pointedly asked Rothschild, of what concern was the honour of France to him, seeing that he was a German? Baron James replied, in a letter which he had published in all the papers, that, if he were a German, so must his brother Frenchmen be Germans. However, it was in the interests of Germany that he acted in the matter of the Rhine frontiers, then under discussion. Thiers resigned, and was succeeded by Guizot, whose proceedings were always of a somewhat cosmopolitan, anti- national character, so that it was not altogether inappropriate when his Ministry was nicknamed the Ministere de I'Etranger. It was naturally under the monarchy, where power centred in one person, that the influence possessed by the Rothschilds displayed itself most conspicuously and undeniably. Few were the public men who did not feel and own that influence. The majority of the deputies, we may say, without fear of contradiction, were more or less under obligations to the firm, and ready to assist in promoting its interests and views. Still, although in diplomatic circles Baron James de Rothschild was a personage of such importance that his opinions could never be altogether disregarded, it was upon the Stock Exchange that his rule was most powerfully felt and universally recognized. Nor did he hesitate to use the sovereignty he possessed to further his purposes, as he could raise or depress prices at his pleasure. His sway was indeed despotic, and none were found bold or rash enough to dispute or oppose his arbitrary edicts, as the gigantic nature of his operations effectually prevented anything like systematic opposition being offered, and induced others to lend him their co-operation by following in his steps. It cannot be denied that the Stock Exchange can boast of intellects which in diplomatic skill and artifice would do credit to a Talleyrand, and it is equally certain that for boldness in conceiving and for vigour in carrying out a plan none could excel Baron James, whose operations were the talk and wonder of Europe. Seeing the facility with which at a stroke fortunes may be won on the Stock Exchange, it is not surprising that speculation should have a strange fascination over the public, nor that the Stock Exchange should become a training school for the development of every kind of trickery and deceit, the centre of genuine business, and of endless swindling.

To live we require the necessary means, and it is the fate and calling of everyone to strive after the acquisition of wealth, and, when he has succeeded, to use the utmost care and thought in the preservation of his gains. There are many ways of attaining this object, since it is possible to acquire riches either by labour, industry, or speculation. Naturally everyone, being more or less anxious to become wealthy, prefers the way which leads most directly and with least trouble towards the goal. The outcome of this innate desire to grow rich speedily and without effort was the invention of games of chance, which have been in vogue from the earliest ages; the dice were as familiar to the Greeks and Romans as they are to us in the nineteenth century. It was the desire for gain which led the people of the Middle Ages to place such faith in the black arts, and in the power of the divining rod. The in- fatnated and ignorant belief that many had in the boasted powers of the alchymists and astrologers was owing to the latter taking advantage of the cupidity of their dopes, who, in the anticipation of becoming suddenly rich, were ready and willing to place implicit reliance in their mysterious advisers. But the philosopher's stone and all such trash are now discarded, and instead of it we have speculation, stock-jobbing, gambling and swindling; all being different modes of attaining the same object, —the acquisition of wealth with the least possible tronble or exertion.

Real gain is that which arises from industry backed up by capital and credit, the latter of which is proportionate to the industry and capital combined. In many countries credit is the basis of all business, which is facilitated and developed by its means. According to the estimate entertained of the credit and character of the individual, the credit of a State is formed; this in earlier times was so slight that oppressive measures had to be resorted to in urgent cases to procure the necessary funds to meet the State's requirements. For the same purpose recourse was often had to the reduction of theinterest on the debt, and to the issue of base money. As years rolled on the evils arising from these practices were recognized, and sounder principles of finance and administration were, by degrees, adopted. Thenceforward the public were induced to confide in the Government, and invest their money in the purchase of the Government stocks, which became at once the basis of a speculation similar to that in private shares. The funded debts of a State, especially of one whose credit has decayed, are, in disturbed times, the most prolific source of that species of gambling for the differences in the quotations, which is known in England as stockjobbing. In every country the Government stocks are used as the means of gambling. The Stock Exchanges of London, Paris, Frankfort and Vienna are crowded with persons who have neither stock to sell, nor money to pay for their purchases, but who yet embark in large speculations for the rise or fall, hoping to pocket, before the settling day, a handsome profit by the difference that takes place between the prices at which they buy and those at which they sell.

The usual mode of conducting speculation on the Stock Exchange is by means of “time-bargains,” i.e., bargains which are not settled before a certain day, usually termed the “account/' or settling, day. Naturally during the interval between the closing of a bargain and the account day, prices may experience considerable fluctuations, on which speculators greatly rely for the success of their dealings. For instance, a person may sell an amount of stock for the”account," and owing to a fall of prices may be able to buy that amount in again at a considerably lower price, thereby pocketing a handsome profit in the shape of the difference between the two prices. On the other hand it frequently happens that the market disappoints the expectations of speculators, who are consequently unable to settle their transactions by delivering the stock they have sold, or by paying over the cost of their purchases; in such cases the transactions are usually arranged by the defaulters paying the differences between the prices at which the bargains were struck and those ruling on the account day. From this explanation it will be at once seen how speculation is encouraged, since it is possible for persons without capital or stock to embark in speculations for large amounts, and these speculations, if luck attends them, return fabulous and easily earned profits.

No wonder that this sort of business has its fascinations. It is, indeed, neither more nor less than gambling pure and simple, and is so considered by the law. There can bo no doubt that this gigantic system of speculation is prejudicial to the public interests, as it seduces business men from their own legitimate business, which they neglect in the hope of gaining larger profits, with greater ease, on the Stock Exchange. Were this system of buying and selling for future delivery confined to the Stock Exchange there would be less reason to complain; but, unfortunately, it is practised upon all our produce markets, where panics are by its means created with far too great a frequency. The public are the greatest sufferers in such cases, as the prices of commodities which they require, and with which they can ill dispense, such as corn, tea, coffee, etc., are often forced up to an extraordinary height by the efforts of unscrupulous and greedy schemers.

The want of principle and the readiness of speculators to attain their ends at all hazards, is shown by the many artifices they employ to effect a reaction on the market. It often happens that the market, contrary to their sanguine expectations, makes a movement which if maintained is sure to

The Rothschilds: the financial rulers of nations

bring about their ruin; consequently they strenuously endeavour to remedy the evil by the fabrication and circulation of false news, by the publication of lying statements in the newspapers, and by any other dishonest means which appear likely to produce the desired result. These tricks are bad and objectionable enough, but in more than one instance ruined speculators have as a last resource tried to reestablish their shattered fortunes by forgery and other fraudulent means. In 1803, when the greatest anxiety prevailed in London as to the result of the negotiations then pending between the French Republic and the English Government, the whole city became elated and joyous owing to a statement contained in a letter, posted in a prominent position on the Mansion House, to the effect that: “the negotiations were brought to an amicable conclusion.” As this letter purported to be written by Lord Hawkesbury, implicit faith was at first placed in its genuineness, especially as it seemed to enjoy the sanction of the Lord Mayor. The Funds rose at once with a bound. Presently, however, when the matter was quietly considered, grave doubts began to be entertained as to the authenticity of the letter. Many (and among them perhaps the authors) boldly declared it fictitious: a reaction forthwith set in, and was intensified when the forgery was exposed. A similar incident occurred only a year or two ago when a letter pretending to be written by Lord Granville's authority, and stating that the settlement of the bondholders' claims against Chili had been satisfactorily arranged, was placed in a prominent position on the Stock Exchange. It is needless to say that this likewise was a hoax, or rather a forgery. Nor is the pernicious practice of fabricating false news by any means confined to the members of the Stock Exchange; all who operate in the Funds and are interested in bringing about a certain movement in the quotations resort to these objectionable devices. Members of Parliament are not above stooping to such meanness; indeed more than one Stock Exchange scandal has originated in the dishonest practices of honourable members. Few trials created greater sensation in England than those of Mr Walsh, M.P., and Mr Cochrane John- stone, M.P., at the beginning of the present century. Impelled by their fatal love of speculation Cabinet Ministers and other persons holding high official rank have been known to take advantage of their position and turn to profitable account the information which has reached them through official channels. Nothing shows more clearly the baneful effects attending the mania for speculation than the deplorable fact that ministers have been led by its influence to abuse the confidence placed in them, and subordinate the public interests to their own. Take for instance the case of the Count de Guisne, the French ambassador in London at the early part of the present century. Profiting by intelligence received in virtue of his office, he speculated in the Funds with great success for a time, but afterwards his good fortune deserted him, and he was unable to meet his engagements. As long as he was lucky he was willing to acknowledge the contracts made with his broker, but when his luck changed he disowned all knowledge of the transactions, refused to pay the balance due, and quitted the country. Apart from the evils directly traceable to speculation, the amount of bribery and corruption it engenders cannot be estimated. In order to obtain the earliest information of all that passes in political circles, speculators spare neither trouble nor expense. By means best known to themselves, but which may be expressed by the conventional term “value received,” they


manage to obtain from subordinate officials and court attendants early and reliable reports of all that it concerns their interests to know. The famous Duke of Marlborough is indeed said to have so far forgotten his station as to have accepted an annuity from the great speculator Medina, who found the outlay extremely remunerative, as it enabled him to have the exclusive privilege of forwarding from the field of battle reports of those great successes which fired the spirit of the nation with enthusiasm and joy. Formerly the advantage of possessing reliable information of any important event, such as the declaration of war, the resignation of a cabinet, the illness of a sovereign, was very considerable, since, owing to the slowness of communication, the truth or falsehood of the reports promulgated by speculators could not be ascertained until they had affected the market and brought about the movement in prices which inevitably filled the pockets of those who were in the secret. Thanks to the invention of the telegraph, these lying rumours are now exposed almost as soon as circulated, but twenty or forty years ago it would have taken days or weeks to ascertain how true or false they were.

The year 1847 was a most evil year both for t

commerce and State finance, especially in England and France. So severe, indeed, were the financial pressure and the scarcity of money in England, that during the month of October bills drawn upon and accepted by first-class firms, with only a week to run, were discounted at the rate of 13 percent. per annum. The banks in Liverpool and Newcastle, owing to a run of unprofitable business, were forced to suspend payment, thereby causing ruin and distress in every direction. The pressure arose more from want of confidence than from any other cause. Everyone had more or less caught the speculation fever raging for railways and corn, and had become liable for sums far beyond his ability to pay; consequently the value of all railway securities fell rapidly, whilst vast amounts were lost in the corn speculations.

During the following months the prices of the Government stocks rose in a strange fashion, despite the well-known scarcity of money prevailing at the time. Chance and an unlooked-for auccession of various causes, rather than the powerful manipulation of the Rothschilds, brought about this unusual phenomenon. Extensive dealings had taken place in the Three percent. Rentes, and it was found on settling-day that those securities were greatly over-sold. A large portion which remained uncovered figured in the names of the Rothschilds. Since the latter had endeavoured to force prices to take a certain path, this amount had been considerably augmented, and, according to estimate made, it was thought that the average price would work out about 75 francs 50 cents. From the systematic sales effected by the Rothschilds, it seemed that their principal object was to maintain this quotation, and that their speculations would prove unprofitable were the prices to rise beyond 75.75, which to all appearances was their limit. The great herd of speculators who faithfully followed all the movements of Baron James, whose actions inspired all their operations, were now placed in an awkward position. They had sold very heavily for the account, but when settling-day arrived stock proved exceedingly scarce, and it became an easy matter for the “Bulls” to raise the price to 76 francs 40 cents., as they were assisted in their efforts by the absence of fresh sellers, the scarcity of stock, and the readiness of persons to buy. Shortly afterwards the price rose to 77 francs, apparently quite contrary to the interest of the house of Rothschild and to the desire of all well-wishers of the new project for a State loan of 250 million francs. Then there ensued an unexpected revival of confidence among the public, similar to that which had occurred 'the year before; the public entered into the speculation, wrested the sceptre of power from the hands of the Rothschilds, and showed them that at times the public is able to set a limit to their rule. In order to counteract the influence brought to bear upon the market, Baron James determined suddenly to unload on it some 450,000 francs Three percent. Rente, which he had borrowed from the three great insurance companies, the Compagnie Generale, the Royale, and the Union, against the deposit of 500,000 francs Five percent. Rente. Apparently his object was by this sudden delivery for cash to beat down the price to his old limit, but in this calculation he was mistaken, as means were found to relieve the market of all this stock, and so the operation failed. The “Bulls,” who had hardly dared to expect the disappearance of so large an amount of stock, took heart of grace, and kept the quotation up almost to 77 francs. Unwittingly they had helped Baron James to win his game. Dealing in the new loan first took place at 76 francs 50, then the price sank 1 franc, or 75 cents., about the price at which Baron James contracted for the loan in November, 1847, namely, 75 francs. Baron James had scored another victory over the whole financial world in Paris. Directly he undertook the loan he issued a circular calling upon all subscribers to pay an immediate instalment of 5 francs upon every 100 allotted to them, failing which their applications would be disregarded. Speculation had been so rife that Baron James may have decided upon this measure from mistrust of the subscribers' ability to fulfil their obligations; or his object may have been to increase the firmness of the new loan on the market.

While Louis Philippe occupied the throne, money was supreme; riches alone ruled in the land which was credited with possessing—thanks to the system of so-called popular representation bestowed upon it—all the blessings and advantages supposed to attend a constitutional monarchy. In the Chamber of Peers the interests and aims of every class had representatives, the second Chamber, elected under a high census, being the reflection of the rich bourgeoisie. Such an Assembly of representatives was, however, as regards the people, a fiction. Moreover, Stock Exchange speculation formed the chief occupation of the rich bourgeoisie, while Louis Philippe and his Prime Minister Thiers led the van in this playing with fortune. The financial situation was for ever growing worse in consequence of the rapid spread of corruption, especially in the practice of buying votes. The demands of those who allowed their votes to be bought kept becoming more and more exorbitant, but, as the means at the command of the corrupting parties did not increase in the same proportion, the court favourites had to make free with the State treasures to supply the deficiencies. Fearful scandals were brought to light, until the feelings and good sense of the nation could suffer the evil no longer. Stronger and stronger waxed the cry of corruption with which the Guizot Ministry was assailed. In spite of all that he had done for them, by degrees even the bourgeoisie began to desert Louis Philippe, and united in the demand for a reform of the electoral system. The whole tone and manners of society were affected by the universal corruption, and to what a depth of vice and degradation the public morality had fallen was shown by the revelations that took place. So far had many persons gone that the Government were forced to disown them and their practices. Like shipwrecked mariners, the Government consulted their own safety by sacrificing their weaker comrades, and prosecuted numbers who had high rank, and were at the same time friends or relations of the King; such persons, for instance, were Teste, formerly in the Ministry, and Cubieres, an old Court favourite, both of whom had either made away with the State moneys or had allowed themselves to be bribed; lastly came Praslin, an old friend of the King.

The monopoly of the State loans which the house of Rothschild had in the course of time secured to itself, and which afforded strong evidence of the immense financial power at its command, has, in consequence of the new principles of finance by which the Government has been guided since 1848, come to an end. At one time it would have been thought a piece of madness to oppose or compete with the Rothschilds in their operations, but now, owing to the powerful and active coalitions formed among many of the leading banking and financial houses, the power and influence of the Rothschilds have received a severe check. They are no longer the all-puissant despotic firm they once were; younger and equally energetic rivals have forced them to descend from the platform they once occupied alone, and they now stand on the same footing as other financial houses. Their influence is of course still immense and powerful, but it no longer secures them the precedence they so long held in monied circles. The effect of the new principles of finance upon the privileges and influence of the house of Rothschild was clearly shown in 1855 when the national loan was issued. The Rothschilds were no longer allowed to pocket, by contracting for the whole loan, all the profits attending the issue; they were forced to subscribe on an equal footing with every other citizen for whatever share they wished to obtain. The policy and wisdom of the Government in taking this bold measure cannot be doubted, as it enabled the public to share in the profit attending the issue—a profit which on previous occasions the contractors had exclusively enjoyed. The loan was issued to subscribers at 63 francs 27 cents, but long before the allotments took place it was dealt in on the Exchange at 65 francs 90 cents. In addition to the Government business, as we may call it, Baron James engaged in many commercial and industrial undertakings. To him France is in a great measure indebted for the construction of most of her principal railroads. He may indeed be called the “Railway King” of France, as Hudson was the “Railway King” of England. To quote the “Augsburger Allgemeine Zeitung” once more:

“When during the last few years the speculative mania turned towards industrial enterprises, and railways became a necessity on the Continent, the Rothschilds took the initiative and placed themselves at the head of the movement. The Versailles Railway on the right bank of the Seine is their creation, and in Austria they gave the first impulse to enterprise of this description by building the magnificent Northern Railway.”

The greatest of Baron James's railway undertakings was perhaps the construction of the Northern Railway of France, which was attended by so many scandals and productive of such widespread speculation that some description of it may not be out of place. In order to secure the country all the benefits supposed to result from unlimited competition, a law had been passed by which it was decreed that the construction of railways in France was not to be effected by granting concessions to particular persons, but was to be confided to those companies whose tenders proved most acceptable. In the case of the Northern Railway, these prudent precautions proved unavailing, as Baron James secured beforehand the co-operation of all who might have been his rivals, and, his being the only tender, there was no alternative but to accept it. The capital of the company consisted of 300,000 shares of 500 francs each. Baron James had no sooner got his company fairly started than he inaugurated a wholesale speculation in the said shares. Every trick and artifice known was employed to force them up to a fabulous price; they were given away broadcast to the newspapers, in order that the praiaes of the latter might be won for the undertaking, or their opposition at least silenced. There was scarcely a person of any importance but received a present of a number of shares, in some cases five, in others fifty, and often more. Ministers, deputies, journalists, everyone, in fact, of any note was bribed to lend his support to the new railway. Naturally the shares soon rose to an enormous premium, and the ignorant and infatuated public, gulled by the reports of the enormous sums already won, and still to be won, hastened to participate in the speculation. The premium on the shares was at one time as much as 348 francs, when Baron James thought it time to realize the profit arising from the operation, and accordingly began to sell out the shares he held. By selling heavily he forced the prices down, ruining the ignorant persons who had purchased the shares at a high premium. He was thus enabled to buy in at a price which left him a handsome profit on the shares he had sold. And so the speculation went on, Baron James, backed up by the immense support he had secured, raising and depressing the market by his manoeuvres just as it suited his purpose. His gains were set down by popular estimate at 140 million francs, but that may be an exaggeration. On the 15th June, 1846, the line was opened with great pomp, and amidst universal rejoicings. Amiens on that day presented a grand spectacle, crowded as it was with princes of the royal family, marshals and generals, deputies, peers, members of the bar, and others who had been invited to take part in the opening ceremony. Unhappily the line inaugurated under such brilliant auspices was, a month or two later, the scene of a terrible accident, by which some thirty persons lost their lives, and an equal number were more or less injured.

The great success and immense fortune gained by Baron James could not fail to win for him a large amount of jealousy and envy, which displayed itself in the combinations formed by rival firms, all anxious to deprive him of some portion of the large profits attending his operations. Among the many formidable rivals with whom he had to contend, none perhaps proved himself so capable and dangerous as Emile Pereire, the head of the firm of that name. So bitter was the rivalry between the two that neither lost a chance of damaging or spiting the other; indeed, so far did matters go that Baron James and Pereire allowed their rivalry in business to grow into a personal enmity, which displayed itself on every possible occasion. Neither hesitated stooping to enter into any intrigue or doing any mean trick if he thought he could thereby damage his rival, either in reputation or pocket. As Pereire's means alone would have been insufficient to attain the objects he had in view and compete with the influence and fortune of the Rothschilds, he sought the co-operation of other influential firms, not only in Paris but in other great capitals. So powerful was the coalition thus organized that even the vast influence of the Rothschilds was ineffectual in the attempt to procure its overthrow. Some idea of the strong opposition with which Baron James had to contend may be formed from the credit and capital possessed by the coalition, which included such well-known and wealthy firms as Barings of London, Hope and Co. of Amsterdam, Stieglitz of St Petersburg, and many others. The rivalry between Rothschild and Pe"- reire was carried on vigorously, and with ever- increasing bitterness and warmth. Rothschild on the one hand was jealous and annoyed by the young upstart Pereire, whilst the latter, conscious of his exceptional energy and abilities, was anxious to force the wealthy and despotic Rothschild to abdicate the lofty position he had gained on the Paris money market. On more than one occasion Baron James exerted himself to the utmost to crush and annihilate his young rival, but Pereire's strong will and financial skill were more than a match for the ability of Rothschild and his millions. In these contests for supremacy it was not always Pereire who had to yield. More than once Baron James found himself out-mano2uvred, and compelled to retire from the arena. In 1856, for instance, Pereire, in conjunction with Hottinger Thurneysser in Paris, and Stieglitz in St Petersburg, succeeded, in spite of all the frantic efforts and the immense and varied influence brought into play by Baron James, in gaining a concession for the construction, during a period of eighty-five years, of a network of railways throughout the Russian empire. This enterprise is certainly one of the greatest and most lucrative of the present century.

Having been thus defeated in his endeavours to secure the concession for the Russian railways, Baron James revenged himself by founding the Vienna Credit Bank. The different offers that were laid before the Austrian Ministry of Finance resolved themselves into two groups, at the head of which stood the Rothschilds on the one hand, and Pereire on the other. In the position it held on the European money market each of these two great houses possessed material advantages, which brought out prominently its individual character. The name of Rothschild had about it a sound of historic fame, of well-merited popularity, and of world-wide wealth which carried with it immense weight, whilst, in addition, its interests and business were looked after by the different members of the family residing in all the great capitals of Europe. The house of Pereire, on the other hand, had in its favour the greater energy, the higher administrative ability, and the superior capacity of its chief. Both houses were all powerful on the great European markets, and for the sake of the new institution it was eminently desirable that the rivalry between the two should cease and a fusion of interests take place. This to all appearances was the opinion of the Finance Minister, who wished to give no decision as to the merits of the two proposals until every effort to secure the alliance of the rival firms had been exhausted. There seemed to be some probability of the much-desired union being consummated, but Pereire, in a letter from Paris, declared he would not undertake the establishment of the new bank in conjunction with Rothschild, unless the latter promised to abandon his opposition to the Credit Mobilier, another of Rothschild's powerful rivals. Baron James positively refused to give the promise, and the negotiations fell through, the ultimate result being that the establishment of the new bank was, as we have said, entrusted to the house of Rothschild.

That Baron James was not successful, in spite of iis most careful calculations and circumspection, in all his enterprises, the reader knows. Unforeseen circumstances will crop up at times to mar the best- laid plans, and the Baron, like others, was not exempt from Fortune's freaks. Great as his winnings were, his losses were on a correspondingly large scale whenever his usual luck deserted him; the amounts he lost at a single stroke were indeed so enormous that they can scarcely be credited. One of his heaviest losses was undoubtedly that caused by the frauds of Carpentier, the accountant or cashier of the North of France Railway. The particulars of this gigantic robbery, without a parallel in the history of crime, were published in one of the papers, and were as follows:—

" The mystery surrounding the theft from the Northern Railway is by degrees being cleared up. The directors try to furnish as few details aa possible regarding this event, which does poor credit to their prudence and watchfulness. They at first desired to give no publicity at all to it; the Paris press had been won over, but, as the foreign journals would not allow the occurrence to be buried in silence, the Northern Railway was forced to step forward with its explanation, in which the losses were set down at six million francs. This estimate is, however, far from correct; it speaks only of the theft of shares, whilst the thieves also emptied the safes of all the money they contained. It has not been ascertained what is the exact loss the Railway will have to suffer; indeed it is a matter of some difficulty to discover the extent of the frauds, as the thieves have destroyed nearly all the papers which could help to elucidate the precise nature of their proceedings. The amount stolen is estimated to amount to from 30 to 32 millions. The loss will not fall on the Northern Railway alone, as Messrs Rothschild, Andre', and De Moray will have to bear their share. Carpentier, Grellet, and their accomplices must have been planning the execution of their project for a long time past, for they had already previous to their flight realized large sums, and six months ago purchased a steamer in England for 1,800,000 francs. From papers discovered after their flight it would appear that they have bought a house in New York, which is, perhaps, the reason why they have left England for America. How far back the embezzlements extend is not yet known, although it has been discovered that the fugitives have been selling shares on the money market here for a long time past. In order to be able to produce


the proper number of shares when an examination of those left in their care took place, they adopted a very clever artifice. The shares deposited with the administration were kept tied up in packets of 1,000 each, and the thieves with the assistance of some of the subordinate officials, who were all more or less in the swim, abstracted from each of these packets 200 or 300 shares and tied the packets up again. When the examination, which to all appearances was very superficial, took place, the full number of shares was seemingly forthcoming, and the embezzlement remained undetected. In this way the thieves were able to realize a considerable sum before they carried out their grand and final stroke. Carpentier was the first to quit Paris; he had solicited leave of absence for four days from Rothschild, who readily granted the favour. On this occasion Carpentier had a long conversaticn with Rothschild, with whom it is well known he was a great favourite. Baron James had just done a, fine stroke of business and told Carpentier that Ms winnings amounted to some five millions. 'If/ continued the rich banker, ' my Algerian Railway speculation turns out all right, I hope to add three more millions to my five/ ' Will you put them before or after your five millions?' asked Carpentier; ' will you pocket thirty-five or fifty-three millions? Put them in front, and hand me your five millions, you will still have a nice little sum left for yourself.' Rothschild laughed at the joke, but would not surrender his five millions. ' I cannot give you my five millions, but here, take my chain; it may serve as a friendly souvenir of this day, which has brought me so much pleasure and profit.' The chain was, we need hardly say, of great value, and Carpentier, although he had already provided himself with far greater wealth, did not despise the offer, and sent the chain as a present to his brother before leaving Paris. From the above conversation, which Rothschild communicated to his friends, it will be seen that he and Carpentier were on the most confidential terms. It was Rothschild who had obtained Carpentier his appointment as chief cashier in the Northern Railway Company, and his rage and fury on learning how his protege" had misconducted himself were terrible. He tried every possible means to secure the capture of his ungrateful and dishonest favourite, and when, accompanied by detectives, Monsieur T of the

Northern Railway started off in pursuit of Carpentier, Rothschild opened an unlimited credit in his agent's favour, saying he was to hesitate at neither expense nor means—that he, Rothschild, would readily give ten millions to get Carpentier in his power. From Paris Carpentier proceeded direct to London, and thence to Liverpool, where the steamer he had purchased was lying. He had her got ready at once and gained the high seas. He there waited for his accomplices to join him. During Carpentier's absence Grellet was placed in charge of the cash. On the day the clerks and workmen of the railway were to be paid, he was not at his post. Information was sent to Rothschild that he had not appeared. Rothschild, who had no suspicions of anything wrong, proceeded to the offices of the Company, and by means of the duplicate keys in his possession opened all the safes, in order to give out the sums required for the payment of the workmen. He opened the small safe, only to find it quite empty. His suspicions were at once aroused, and he ordered the manager to observe strict secrecy, as he would bear all responsibility; he then opened the large safe; that was likewise empty. The loss of shares was not discovered till later. Measures were at once taken to procure the arrest of the thieves, but they had got so good a start that Grellet was able to join Carpentier unmolested. With Grellet and Carpentier, four subordinate officials disappeared; Carpentier likewise took with him his mistress, a Mademoiselle Georgette, who had been living in Paris in a very extravagant style. Carpentier and Grellet are still very young men; the former is fair, looks exceedingly delicate and pale, and appears to be in a consumption. Grellet belongs to a very good family, and has a large private fortune, said to amount to 500,000 francs. The statement that he and Carpentier were driven to their crime by losses on the Stock Exchange and fast living is false; both, on the contrary, led very regular and quiet lives, and, if they lately have been spending money freely, that is only a consequence of their criminal conduct. They were in no way driven to crime; they simply plunged headlong into guilt."

The immense services rendered by Baron James de Kothschild to the State were recognized and rewarded by the Government, who showered upon him titles and decorations of every description. During the reign of Louis XVIII., when the proud aristocracy had its own way in everything, the Baron was not on the most friendly terms with the Government, owing to a slight which he received at their hands. It is said that, as a modest reward for his services, he asked that his wife might be introduced at Court; but, when the haughty Duchesse d'Angouleme was consulted, the favour was refused, as she declared that she was quite scandalized at the suggestion. “It must not be thought of,” said she; “you must not forget that the King of France is the most Christian King.” However, Baron James punished this narrow- minded prejudice in his own way: during the remainder of the reign he withdrew his support from the King, and quietly declined to aid either financially or by advice a Government swayed by such mean and paltry principles. The revolution of 1830 made amends for the slight he had suffered. He welcomed the new Government, which he supported with all his influence and money, and became on the most intimate and friendly terms with the new Court. He dined regularly every week at the Palais Royal, and the King's sons never failed to be present at the soirees held in the Rue Laffitte. During the reign of Louis Philippe the influence of Baron James was all-powerful; the reign has been called the reign of stock-jobbing and speculation. It was no longer Baron James who had to solicit favours from the aristocracy; it was the aristocracy who sought the patronage and aid of the rich banker. The splendour and luxury of the entertainments given in the Chausse'e d'Antin were never equalled by any given by the Court. The banker's house on such occasions was thronged with a crowd of persons distinguished in the diplomatic and financial worlds. To procure an invitation from Baron James was almost more highly thought of and sought for than a presentation at Court. Smarting, perhaps, under the recollection of the snub once given him, Baron James took a delight in humiliating those who now cringed to him. His roughness of manner, and his blunt if not coarse mode of speaking were well known, and many anecdotes of his utter disregard of politeness have been published. The higher the rank of the victim the greater the pleasure Baron James derived from the confusion and pain caused by what he regarded as his blunt and outspoken manners. Sometimes he met his match, and would receive a severe rebuff, but even that only disconcerted him for a moment. Amongst his guests at the Rue Laffitte on one occasion was Prince Paul of Wiirtem- berg, who had honoured him by accepting an invitation for dinner, during which Baron James persisted in disregarding all etiquette and in addressing the Prince in a most annoyingly familiar tone. At first the Prince treated his host's conduct with contemptuous silence, but, as that proved insufficient, he at last rose from the table and left.

A Conservative deputy met Baron James at the Opera, and inquired how he was. “Not so bad.” “And the Baroness?” “What concern is that of yours?” replied the Baron, turning his back roughly on the speaker.

Those who suffered most from this objectionable practice of Baron James were artists, journalists, and others, who, being indebted to him for his, hardly felt bold enough to rebuke his unmannerly behaviour. Jadin was painting some frescoes in the dining-room belonging to Baron Salomon de Rothschild, when Baron James entered and caught him accompanying himself in his work by singing and whistling different airs.

“Holloa! you workman with the decoration, come down a bit; I want to speak to you.”

Jadin gave no reply, shrugged his shoulders to show his indifference, and continued his singing.

This behaviour naturally created for Baron James many bitter enemies, who lost no opportunity of holding him up to ridicule in the press. No doubt much that was printed to his disadvantage had no better authority than the writer's imagination, but still Baron James's character offered many opportunities of attack to those who wished to irritate and annoy the great banker. There was in Baron James's character a peculiar combination of seemingly opposite and antagonistic qualities. On the one side there was the shrewd man of business, ready to sacrifice thousands, if by so doing he could gain millions; while, on the other, stood his well-known benevolence and charity. True to his keen business instincts, Baron James showed in the most trivial matters an anxiety and a determination always to obtain as cheaply as possible what he bargained for. This niggardly spirit was naturally ridiculed by his calumniators in the press. The story of the gardener Paquet is not unworthy of reproduction here.

By a process little known at that time, but common enough now, Paquet succeeded in obtaining three magnificent peaches in the month of January. All interested in horticulture hastened to inspect such a marvellous proof of his skill, and among the visitors was Baron James. The following conversation then took place between the great gardener and the great millionaire. The story reads so much better in French, that we may be excused for printing it in that language:—

“Fraiment, Monsieur le chartinier,” dit-il, “vos baches sent atmiraples. Gombien en vonlez-vous?”

“Qninze cents francs, Monsieur le Baron.”


“C'est tout an juste,” dit Paqnet. “Je ne vou- drais pas vous snrfaire.”

“Drois beches, qninze cents vrancs, Ifein Gott! Et drois beches qui bent-etre ne falent rien.”

“Oh! pour cela,jevous arrSte,” dit 1'horticnl- tenr pique1. “Vous allez avoir immediatement la preuve dn contraire.”

He at once plucked one of the peaches, cut it in two, and offered one half to the Baron, whilst he ate the other himself.

“Qu'en dites-vous, Monsieur le Baron? Vous etes connaisseur; je m'en rapporte a la finesse de votre palais.”

“Dres-ponne! Telicieuse !” dit Rothschild cro- quant la peche.

“Oui, c'est de la meilleure espece. Chair ferme, saveur exquise. En plein air, cette espece-lti ne murit qu'au commencement de Septembre.”

“Foyons, Monsieur le chartinier, ce n'est has fotre ternier brix?”

“Pardonnez-moi. Quinze cents francs, comme j'ai eu 1'honneur de vous le dire.”

“Eh,” s'e'cria le juif, “blaisantez-vous? II y a une beche te moins !”

“N'importe, c'est toujours quinze cents francs— pour vous, Monsieur le Baron. Ce sont lei des fruits de millionaire; je n'en rabattrai pas un centime.”

Rothschild finally bought the peaches, when the meaning of the gardener's conduct became clear to him.

The well-known anecdote of Vernet the painter did not end so pleasantly for the Baron. When he called and inquired how much the painter would charge to execute his portrait, he was told—

“For you, Monsieur le Baron, it will be four thousand francs.”

“The devil! It will cost you only two or three hasty strokes from your brush. Come, now, that strikes me as being rather dear.”

“Ah, you deal in the arts, do you?” exclaimed the artist, with a shrug of his shoulders. “Ah, well, it will be four thousand francs, not a centime less.” And, when Rothschild manifested his surprise, the painter continued: “If you add another word it will be three times the sum. Am I to paint it or not?”

Baron James hastened to quit the studio, apparently alarmed at being in company with one who was, he believed, perfectly mad.

“Wait a moment!” cried the artist after him, “I will do your portrait for nothing.”

And he kept his word. In his picture called “La Smala” can be seen a hideous-looking Jew, running away with a casket of jewels and money, his face expressive of the most sordid avarice and ill-concealed fright. That portrait is a gross caricature of Baron James de Rothschild.

However illiberal he was in matters of business, Baron James could display bounteous liberality on occasions when his business instincts were not touched. But even his immense and well-known beneficence was misconstrued and attributed to interested motives, owing to the belief that a man could not be so lavish in hia gifts who was known to be so close in his every-day conduct. For many years the greatest suspicion and disbelief of the purely disinterested nature of the Baron's charity prevailed among the public, and this opinion was fostered and encouraged by the vile calumnies printed in the press. In 1847, Baron James, foreseeing the distress and want likely to result from the poor harvest of 1846, took energetic measures to provide a remedy for the evil. He bought, in the European and American markets, prodigious quantities of corn, which he afterwards sold at an immense loss in Paris. An enormous bakery was started in the Chapelle Saint-Denis, where the starving poor were able to procure bread at a large reduction. But the most generous plans, the most charitable projects, prove abortive when they emanate from the brain of a man in bad odour with the public. No trust was put in the good nature of the great Jew; the most violent diatribes appeared in the papers every day, telling the public to be on its guard; that his bread was not bread at all; that his flour was not flour. It was bran; it was plaster, mixed with arsenic. Others asserted that Baron James had bought large quantities of damaged flour and that he concealed its bad quality by mixing with it sweet almonds, his calumniators quietly ignoring the fact that sweet almonds are far more costly than the best flour. In addition to the enormous sacrifices made in supplying corn to the distressed population, Baron James, in 1848, subscribed no leas than fifty thousand francs in aid of the wounded and the unemployed workmen. This was certainly a display of the most liberal generosity, seeing that he had himself much to fear from the excesses of the excited populace during the outbreak of the revolution. It must have been an anxious time for him as he learnt of the excesses of the mob, every moment expecting it would be his turn to receive a visit from them. But among those having influence and control over them was Marc Caussidiere, who was not unmindful of the charitable munificence of Baron James. By his orders guards were stationed not only round the hotel, but also round the suburban villas of Baron James, whose anxiety was relieved by the grateful thoughtfulness of the citizen. Less than a year after, Baron James proved that he was capable of appreciating the admirable conduct of Caussidiere, who, when he reached London, an exile and a beggar, received the following note from Paris:—

" SlE,

" Allow me to place at your disposal the sum of thirty thousand francs. This little capital will enable you to start some business in the hard land of exile. You may return it to me in ten, twenty, or any number of years you please. It is a feeble testimony of my gratitude for the great services you have rendered the country.

" I am, &c. &c.,


Even this display of gratitude was reported to be owing to prudential and selfish motives, for it is asserted the Baron said: “The devil is never conquered; who knows but that he may return?” It is, however, satisfactory to learn that these thirty thousand francs paved the way to Caussidiere's fortune, as he started a wine and brandy business, which eventually proved Tery lucrative.

If all the stories related of him be true, Baron James displayed remarkable skill in being charitable at the expense of others. He was frequently reproached with his disregard of, and want of sympathy with, his co-religionists in misfortune, and it was suggested to him that he might at least give them the benefit of some Stock Exchange operation. The hint was taken: a manoeuvre was carried out one fine morning to effect a rise in the market and was followed almost immediately by a fall which enabled the Baron to make a profit of 850,000 francs, which sum he devoted to the construction of the Jewish Home in the Rue Picpus.

On another occasion he granted an interview to

Felix S , a man of considerable talent, who

laid before him the plan of a vast undertaking, which as Baron James acknowledged appeared both novel and ingenious as well as possessed of every quality necessary to secure its success. But, although entertaining so favourable an opinion of the scheme, he positively declined to embark any money to float it. He said, however, “Follow me, and the capital will soon be forthcoming.” He then made his visitor enter his carriage and drove to the Bourse, where they walked up and down, arm in arm, together. They had scarcely separated ere several capitalists hastened to surround the man honoured with the friendship of the king of finance, and after an explanation they assured him of their readiness to support him both by their influence and their capital.

Heine, in referring to his friend and patron, thus described Baron James de Rothschild: “He was a remarkable personage, whose financial abilities I do not pretend to analyze, but they must have been considerable, if their results are any criterion to go by. He possessed the peculiar gift or instinct of observation, by which he was enabled to discover the capacities of other people in every sphere of life. Many persons have on this account compared him to Louis XIV., and truly, in contrast to his colleagues who surround themselves with a generality of mediocrity, Baron James was always to be seen on the most intimate footing with the notabilities of every rank and station. He always knew who was the best man in any business, even if that business was a mystery to him. Though he probably possessed little knowledge of music, Rossini was his constant companion; Ary Schefier was his family painter; Care'me was his cook. He certainly understood not a word of Greek, and yet the Hellenist Latrone was the scholar whom he favoured mostly. His physician was the genial Dupuytren, and the most brotherly affection existed between them. At an early date he duly appreciated the worth and ability of Cremieux, whom he found to be a trusty advocate. At the very outset he recognized the political abilities of Louis Philippe, and was always on confidential terms with that great master of the arts of diplomacy.”

Baron James de Rothschild died on the 15th November, 1868.

The present head of the firm in Paris is Baron Alphonse de Rothschild, the eldest son of Baron James. He inherits much of his father's financial talent, and is acknowledged by the rest of his relatives as the shrewdest and most able man of business among them. He is the head of the family not only on account of his ability, but also on account of his seniority, as he is the oldest of Mayer Amschel Rothschild's grandsons. For some years before his father's death he took an active part in the conduct of the firm's business, whence we may infer that he is indebted to the careful training he then received for much of the remarkable skill he has since displayed in operations of the greatest magnitude. All grand international loans, i.e., loans issued on behalf of a particular Government in several countries simultaneously,— are invariably submitted first to Baron Alphonse, as he is known to be the best judge of the time and conditions most conducive to the success of such undertakings. The number of loans issued under Baron Alphonse's management is large and embraces almost every nationality in Europe. The good fortune attending these financial operations is proved by the numerous decorations and orders which he has received from the hands of monarchs anxious to recognize the obligations they feel they owe to the head of the Rothschild family. The business of the Paris firm is by far the largest and most extensive of all the Rothschild firms; it embraces not only loan operations, but commercial speculations and undertakings of every description. Its banking business is enormous, and in this respect it differs from its colleagues in London, Frankfort, and Vienna, whose business is more purely mercantile, or limited to bill discounting and Stock Exchange operations. The most responsible undertaking of the Paris firm under Baron Alphonse's management was the payment of the indemnities to Germany at the conclusion of the Franco-German War. This immense operation called into play all the resources and energies of the Rothschild family and its allies. The mere anxiety and mental labour connected with this vast undertaking would have prostrated any man of inferior calibre. For months Baron Alphonse and his clerks worked incessantly day after day, Sundays included, to almost midnight. The strain on the brain and the constitution was fearful; many even now feel the effects of this trying period. Great as was the anxiety connected with this business, Baron Alphonse no doubt considered it nothing in comparison with that which the lawlessness and violence of the Commune inspired. To curry favour with the mob, Baron Alphonse was compelled to serve, as he had done in 1848, as a volunteer on the ramparts. But even that did not render the property of his family secure from the attacks of the petrolists. More than one of the mansions belonging to members of the family were invaded and despoiled by bands of those wretched fanatics. In one instance the house had been besmeared and sprinkled with petroleum with a view to its being set on fire, but the presence of mind displayed by the butler averted this catastrophe. He hinted to the unwelcome visitors that the cellars contained a large stock of the finest wines; the hint was acted upon at once, and ere long the butler had the satisfaction of seeing the whole of the ruffianly crew in a state of intoxication. He then sent to the military for aid, the result being that the petrolists were all carried off to pay the penalty of their wanton deeds. Baron Alphonse, in common with his fellow citizens, found that much greater harm was to be expected from the enemies of order living within the walls of Paris than they had ever reason to dread from the shells of the invading Germans. During the siege, the Rothschilds felt no very serious apprehension, seeing that they had secured the safety of the bulk of their property by transferring it to the care of their relatives in London or elsewhere. To them even the privations of the siege were mitigated, as they were able, thanks to their influence with both the German and French staff, to pass convoys of provisions through the lines. It is well known that the utmost care was taken by the Germans that no injury should be done to Baron Alphonse's chateau at Ferrieres. This chateau was made the German head-quarters. It was here that Jules Ferry came to arrange the terms of the capitulation with Prince Bismarck and the Prussian generals. The strictest orders were given respecting the preservation of the building. None of the furniture, nor any of the valuable paintings and sculptures were allowed to be displaced or removed. It was even forbidden to shoot any of the game in the park without special permission. This act of favour gave rise to a certain amount of grumbling and heartburning among the German soldiers. Provisions, especially meat, were none too plentiful in the German lines, and it was not considered just to let the troops want, simply to confer a favour on one whom all regarded as an enemy. In their advance to Paris the soldiers had been allowed to seize cattle and sheep, but now, with the prospect of a long siege, they were to suffer hunger when plenty was before their mouths. Nothing could demonstrate more clearly the immense influence commanded by the Rothschilds, than this scrupulous regard shown by the Germans in preventing the spoliation of their property. But, however safe his property outside Paris may have been, it was different with that inside, and Baron Alphonse knew little peace of mind as long as the siege and the Commune lasted. So intense was the anxiety he suffered during this trying period, that his hair, from being jet-black, was turned to grey in a single night. Since the war France has been blessed with peace, which has greatly contributed to the re-establishment of her fallen fortunes. How long this will continue we cannot say, as she seems ordained to suffer from internal troubles at certain intervals.

Chapter X.


the foregoing pages we have endeavoured to present the reader with a clear insight into the characters of the heads of the different firms by means of a number of anecdotes which are both more effective and more entertaining than mere description. The anecdotes already given we have good reason to consider authentic, but there are many others which are undoubtedly the creation of lively imaginations, and have little foundation in fact. The Rothschilds have so long held a prominent place in public affairs, their sayings and doings have been so closely watched and reported, that it is not surprising to find that innumerable tales have been published about them. A large number of the anecdotes are, as we have stated, quite unreliable, still there are some so highly characteristic, that it is difficult to believe them entirely devoid of truth. This state of things was somewhat embarrassing. We were at first inclined to omit all anecdotes about the authenticity of which we did not feel confident, but, as their perusal is pretty sure to afford some amusement, we have, on second thoughts, deemed it our duty to bring them together in a separate chapter, without pledging ourselves in any way for their truthfulness. With this reservation we submit the following stories to our readers, who can decide whether we were justified or not in our course of procedure.

Baron Anselm von Rothschild on one occasion lost a ring which he prized very highly, not on account of its intrinsic value, but because it had been given him by the Emperor of Austria in recognition of the valuable services rendered by the family to the imperial monarchy. The Baron offered a reward of three hundred and fifty florins a year to the person who should restore the cherished ring. The daughter of a humble publican proved to be the lucky individual. She presented herself with great humility at the residence of the wealthy financier, who recognized the article with demonstrations of the liveliest pleasure, and caused five hundred florins to be paid the girl in advance, though that was something beyond the amount of the annuity. He also gave instructions for a bond to be drawn up to secure the regular payment of the allowance in future. Having received her recompense, the girl ran home to her parents, in order that they might share in her happiness and good fortune. The old people could scarcely believe that their daughter had received so handsome a reward for the discovery of an article of such little value. After some consideration they concluded that, rather than wait for the annual allowance, it would be more advantageous to obtain a lump sum down, as they might thereby be enabled to purchase the house in which they lived. The girl returned to Rothschild, who received her very affably, and, having learnt her object, was pleased to give her the sum of seven thousand florins in ready money in lieu of the promised annuity.

Dr Busch, the biographer of Prince Bismarck, records, in his well-known work “Our Chancellor,” an amusing anecdote of Baron Anselm, which deserves reproduction in these pages. He says:— “At dinner, at which were Marshal of the Household Perponcher, and a Herr von Thadden, who was designated as a member of the administration in Rheims, the Chief told several good anecdotes of Baron Rothschild in Frankfort. On one occasion he had spoken in his presence with a corn merchant about a sale of wheat, when the merchant said to Rothschild, that being so rich a man he would never think it necessary to put the highest price on his wheat. ' What rich man do you mean?' replied the old gentleman; ' is my wheat worth less because I am a rich man?' He used to give dinners sometimes which were quite worthy of his great riches. I remember once when the present King was in Frankfort I invited him to dinner. Later in the day Rothschild also asked His Majesty to dine with him, to which His Majesty replied, that he must settle matters with me; for his own part he did not care with which of us he dined. The Baron now came and proposed that I should cede His Majesty to him, and that I should join them at dinner. I refused this, and he had the naivete to suggest that his dinner might be sent to my house, although he could not eat with us, as he partook of only strictly Jewish fare. This proposal also I begged leave to decline—naturally, though his dinner, doubtless, was better than mine.—Old Metternich, who, by the way, was very kind to me, told me that once when he had been visiting Rothschild, the Baron gave him some luncheon to eat on the way back to Johannisberg. With the luncheon were packed six bottles of Johannisberg wine. When Johannisberg (Metternich's estate) was reached, these bottles were taken out unopened. The Prince then sent for his wine steward and inquired how much that wine cost him a bottle. ' Twelve guldens/ was the answer. ' Well, take these bottles, and the next order you get from Baron Rothschild, send them back to him, but charge him fifteen guldens, for they will then be older. '”

Dining on one occasion with Baron James de Rothschild of Paris, Eugene Delacroix kept his eyes turned upon his host in so marked a manner that when the company rose to leave the dining- room Baron James could not help asking his guest what it was that so attracted his attention. The painter confessed that for some time past he had vainly sought a head to serve as a model for that of a beggar he intended to hold a prominent position in a painting on which he was then engaged, and that, as he gazed at his host's features, the idea suddenly struck him that the very head he so much desired was there before him. With this explanation, he ventured to ask whether the Baron would do him the favour to sit to him as a beggar. Rothschild, being a great admirer of the art in all its forms, and pleased to be considered one of its chief patrons, readily consented to sit in a character probably never before assumed by a millionaire. The next day found him at the painter's studio. Delacroix placed a tunic round his shoulders, put a stout staff in his hand, and made him pose as if he were resting on the steps of an ancient Roman temple. In this attitude he was discovered by one of the artist's favourite pupils, who alone had free access to the studio at all times. Struck by the life-like excellence of the model, the newcomer congratulated his master at having at last found exactly what he wanted. Naturally concluding the model had only just been brought in from some church porch, and never dreaming the character assumed by him was far from his true one, he seized an opportunity when his master's eyes were turned to slip a piece of money into the beggar's hand. Rothschild thanked him with a look, and kept the money. The pupil soon quitted the studio. In answer to inquiries made, Delacroix stated that the young man possessed great talent but no means; that he had, in fact, to earn his livelihood by giving lessons in painting and drawing. Shortly afterwards the young fellow received a letter stating that charity bears interest, and that the accumulated interest on the amount he had so generously given to one whom he supposed to be a beggar was represented by the sum of 10,000 francs, which were lying at his disposal at the office in the Rue Laffitte. Amongst the endless number of rich and handsome articles Baron James had diligently collected, his guests seldom failed to be struck with admiration by a magnificent porcelain service, of singular beauty and design, and remarkable for the superb paintings which adorned its exterior. The history attached to the acquisition of this service is as singular as its beauty. One day an old man, feeble, decrepit, and to all appearance on the verge of the grave, solicited an interview with the Baron. At the very outset the old man's careworn looks and destitute condition awoke the latter'a lively sympathy, and this sympathy was strengthened on learning that his visitor was a co-religionist. The old man produced from a bag a plate of such exquiBite design and finish, that Baron James, with the instinctive envy of a virtuoso, felt he must at any cost become the owner of such an artistic treasure. After stating he was in a most destitute condition, the visitor proceeded to say that want had compelled him to part with many articles which he had regarded as heirlooms. The plate, he declared, belonged to a service which he had reserved to the last, hoping against hope that necessity would never compel him to part with it, but alas! the time had come when the claims of his starving family could be stopped only by relinquishing possession of this, the last resource against famine.

“I come to offer this service to you, M. le Baron, thinking that so beautiful a work of art can find a fitting resting-place only in the midst of your well- known collection. Will you buy it?”

“It is indeed beautiful; what do you ask for it?”

“Look you, sir,” said his visitor, " I am now an old man, bowed down with years, and have not long to live. I am poor, but I wish if possible to end the few remaining years of my life as comfortably as I can. Will you, in exchange for this valuable porcelain service, give me an allowance for life of one hundred francs a month? It is a trifle to you, and

I am so old !"

The Baron reflected a moment, examined the

plate afresh, and at length answered: " Well, be it

so; here is the first payment; send me the service,

and leave me your name and address, that the money

may be sent to you regularly."

The porcelain service was duly delivered. A

month later, as the Baron was sitting in his office, a

man entered, and claimed payment of the allowance

then due. The new-comer was young, stoutly

made, of a vigorous constitution, and likely to live

for another fifty years.

" But you are not the man to whom I promised

the allowance !" said the Baron.

“Excuse me, I am indeed the man.”

“But he was at least eighty yeara of age.”

“You are mistaken, I am but thirty.”

" But your aged appearance and careworn looks

were certainly unmistakable."

" Thanks to your great generosity, my recovery

has been rapid and surprising."

The Baron smiled at the remark, and gave orders

for the payment of the money, exclaiming as he did


“Ah! you are an excellent comedian, and have taken me in completely.”

“You flatter me; I am probably the first who has done Bo,” answered the Jew, politely bowing to the millionaire.

Strange as were the circumstances and terms on which the service was bought, Baron James had little reason to repent of his bargain.

This reference to objects of art reminds us of another anecdote, of which, if we remember rightly, Baron Alphonse was the subject. On one occasion he started out for a walk, and presently found himself in the district immediately behind the Pantheon. As the neighbourhood was quite strange to him, he soon lost himself. No cabs or omnibus were to be seen anywhere, nor did anyone pass of whom he could inquire his way. At first the situation rendered him somewhat nervous, but presently, when he thought of the strange novelty such a predicament was to him, he became reassured, and laughed in anticipation at the amusement the adventure would afford him. He therefore continued to walk on without troubling himself as to his whereabouts. Presently he passed a shop for the sale of second-hand goods, and his quick eye


caught sight among the rubbish of an article which struck him as worth inspection. It proved to be an antique barometer of the time of Louis XVI. It bore no trace of its original gilding, although the carving was still in a perfect state of preservation. Being a good judge of such things, and an ardent collector, the Baron determined to buy it. The price asked was ten francs, and the Baron congratulated himself on having secured so great a bargain. On putting his hand into his pocket, he discovered that in his hurry he had forgotten to bring his purse with him. It was a day of accidents.

“Well, it does not matter; I will take the barometer at all events,” he said to the shopkeeper. “Send it up to my hotel; I am Baron Rothschild; you will receive the money when you deliver the barometer.”

“I do not know either your name or address, sir, nor do I ever send things out that are not previously paid for.”

This was a startling rebuff for Baron Rothschild. It was a perfectly novel experience to meet with anyone ignorant of his great name. Being, however, in a good humour and regarding it as part of the day's adventure, he was only the more amused. He was about to explain who and what he was, when he happened to notice a porter passing on the opposite side of the road. Beckoning to the man, he asked him: “Have you ever heard of Baron Rothschild?”

“Well, that is a queer question ! Heard of Baron Rothschild? Of course I have; but why do you inquire?” said the man, somewhat crossly, as if he suspected his interlocutor was jesting.

“Because madame here has just refused to trust him for ten francs,” was the reply.

“Is that really true, Madame Duclos?” said the porter, in great astonishment.

“Yes, to be sure, Monsieur Pierre; one cannot know everybody,” answered the shopwoman with a shrug, “but I know you, and if you will become guarantee”

At these words the Baron interrupted the woman with such a hearty burst of laughter that it was some minutes before he could recover himself.

“Well, Monsieur Pierre,” he said, still laughing, “if you will kindly become surety for me, will you go and call a cab, and then we can take the barometer home.”

The porter required no second bidding; he hastened off and soon returned with the cab. They then drove to the Baron's house, where the porter received a handsome reward for his exertions.

Attempts to ruin the Rothschilds as well as to frustrate and wreck the operations undertaken by them have frequently been made by persons jealous of their extraordinary success. It is needless to say that all such attempts have signally failed. At the outset luck has sometimes favoured these bold but reckless opponents, but it has been owing to the sufferance of the Rothschilds, who, conscious of the enormous power at their command, knew they could crush their upstart rivals at any moment they pleased. Such attempts would be more common were it not known that the only chance of rendering them successful would be to operate on as extensive a scale as that habitually adopted by the great financiers. One of the boldest of these

would-be rivals was a Mr James H , who

bought and sold enormous amounts of stock in a very brief period, and, so far from imitating the secrecy marking Rothschild's operations, deemed it essential to the success of his scheme that all his dealings should be done as publicly as possible. He was the son of a wealthy country banker, and at the time he commenced speculating on 'Change had £50,000 stock inscribed in his name, though the stock was really his father's. The reputation of owning so large an amount of stock was very useful on 'Change, as it conferred upon him and his transactions an importance which would otherwise have been wanting. After some time had elapsed the stock was transferred back into his father's name. At the outset, and until he had perfectly mastered all the rules and usages of the House, he acted with the greatest prudence and discretion, confining himself to transactions of a very humble nature. Gradually he enlarged his operations, and the “natives,” as the members of the House were called, began to look upon the boldness of his dealings with mingled surprise and admiration. Success attending his speculations, he was watched and followed in them by a crowd of persons such as will always hang about a successful man. He became a power on 'Change; bulls and bears alike dreaded him, for he was as independent in his dealings as Rothschild himself.

Consols, at the time of which we are writing, were quoted at about 96. A few months later symptoms of a panic set in, and the unfavourable tendency of the market was aggravated by the fulminations hurled, for reasons best known to himself, by a well-known writer on money matters against the Bank of England. In spite, however, of these adverse circumstances, prices showed a

decided unwillingness to fall. Mr H studied

the state of the market closely, and, being convinced in his own mind that a leader alone was wanted to carry on a successful war against the Rothschilds, determined that he himself would be that leader. He at once began his attack by selling out £200,000 Consols at 96. This operation concluded, he advertised it well, and made known his willingness to sell £1,000,000 more. Purchasers were found for the whole at prices varying from 94 to 90, at which price Consols closed for the day. The next day he resumed his tactics to depress the market, and so successful were they that Consols closed at about 84. As might have been expected, a run on the Bank of England took place, simultaneously with this sudden and unlooked-for fall in the price of Consols. He then repurchased so largely that when a reaction set in and prices recovered, his gains amounted to more than £100,000. But the rivalry of Mr H did not long continue to trouble Rothschild. Emboldened by the success of his first effort, he tried to repeat his attack two years later, and even on a larger scale. Rothschild, however, had his eyes about him, and, divining his rival's plans, laid a trap into which that rival fell.

The result was that Mr H was utterly ruined.

He was declared a defaulter and his name stuck up on the black board of the Stock Exchange. Then, and not till then, was it discovered that the £50,000 stock was not his own, as had been supposed, but his father's.

At a charitable sale, held in 1858, at the Hotel Lambert in Paris, by the Princess Czartariska, in favour of the distressed Poles, an incident took place between Georges Sand and Baron Rothschild. Madame Dudevant (Georges Sand) had a stall on the occasion, and displayed a number of fancy articles for sale. Baron Rothschild happened to pass, and the fair saleswoman addressed him with the usual request to buy something. “What am I to buy?” said the Baron; “you have nothing at all suitable for me. But stay—an idea strikes me. Give me your autograph. Sell me that.” Madame Dudevant took a sheet of paper and wrote upon it as follows:—“Received from Baron Rothscliilfl the sum of one thousand francs, for the benefit of the distressed Poles.—Georges Sand.” Baron Rothschild read it, thanked her, and, handing her a note for the amount named, went away highly gratified.

It is well known that the life-long ambition of all true Americans is to do Europe before they die, and none can vie with them in the thoroughness with which they do do the sights and places of interest they may happen to visit. Their curiosity is insatiable, and is only equalled by their irresistible determination to satisfy it at all costs. No false modesty deters them from questioning strangers. They will accost the first man they meet, if they think he can remove their doubts or add to their knowledge. The following account, written by an American, confirms our statement, and explains itself:—

"When I arrived in England I set myself to work to accomplish the object of my journey—to see all that I could; and in doing so I attracted much attention. I made many acquaintances, and was told by them that I was the best representative of my nation they had ever seen. In curiosity, and a determination to gratify that feeling I think I was. I spared no pains to see all the sights and hear all the gossip that came in my way. This characteristic at last brought me into an awkward predicament, which I purpose to describe in the following anecdote. One morning, while I was in London, I started out for a walk. I had heard a great deal about the famous place which the Rothschilds were building, and I sallied forth on this particular morning for the purpose of seeing it. I soon reached it; and through the kindness of the master builder was shown over it. I had finished my inspection, and was standing on the side walk gazing at it with undisguised admiration, when I noticed a gentleman a few feet from me, watching the building. He was a fat, portly old fellow, with a good-humoured face, in spite of his haughty look, and I thought from his appearance he might be the contractor for the work, so I determined to accost him and gain what information I could.

"' Good morning, sir/ I said, approaching him. He bowed politely, but without speaking.

"' I am a stranger here/ I went on; ' I have been looking over this building, and I would like to ask you for some information concerning it.'

"' I shall be happy to oblige you/ said he, politely. He was very kind in telling me much that was of interest. At last I said, abruptly,

" ' I suppose you have seen Rothschild, sir?'

" ' Which one? ' he asked.

"' The old cock/ I replied.

"' I see the old cock every day/ he answered, giving me a strange glance.

" ' By George/ I went on,' I should like to have a look at him ! People say he is a gay old chap, and lives high. I wish I had him in my power— I'd not let him get away until he had shelled out a pile of his money.'

" The old gentleman burst out into a laugh.

"' Baron Rothschild had to work for his money, and deserves to enjoy it/ he said, at length, when he had got over his merriment.

" ' May be so/ I remarked; ' but I reckon he did a heap of squeezing to get it.'

" The old man's face flushed.

"' I never heard the honesty of the house called in question/ he said, stiffly.

"' Didn't you? Well, to tell you the truth, neither have I. But I wouldn't be surprised if I'm right, after all.' The old man's. face grew as black as a thunder-cloud, and he bit his lip without speaking.

"' People tell me/ I continued, not heeding this, for I thought it natural that the old fellow should be annoyed at anything said against his employers, 'people tell me the Rothschilds have made two fortunes. Now, as most people can make only one, I feel somewhat interested to learn the manner in which this was done. Can you tell me, sir?'

"The old man's face brightened instantly, and he replied, smilingly, with more politeness than he had as yet manifested:—

"' Certainly, sir. People do say the house of Rothschilds made one fortune by being careful to mind their own business, and the other by letting that of others alone. Good morning, sir.'

" With an elegant bow he turned and left me staring at him in blank amazement. I began to smell a rat, and I looked for someone of whom to ask the old gentleman's name. He had stopped at the upper end of the building, and was giving some directions to a workman. I saw a handsome man of about thirty standing a short distance off. He, too, was looking at the building. I liked his face and went up to him.

"' Excuse me for troubling you, sir/ I said,' but I am a stranger in this country, and would like to ask you a question.'

"' I shall be happy to give you any information in my power/ he said, politely.

"' Then can you tell me the name of that old gentleman/ I asked, pointing to my sarcastic acquaintance.

"' Certainly/ he replied. ' That is Baron Rothschild, the head of the house of that name.'

" ' Whew!' I exclaimed in astonishment, ' I've got myself into a scrape then.'

"' What is the matter?' asked my friend, curiously.

" I told him what had occurred between the Baron and myself. He laughed heartily, and remarked pleasantly when I had concluded:

"' That was awkward.'

"' He's a crusty old chap/ I said, considerably vexed; ' he's as cross as a bear.'

"' Oh, that's only his way/ replied my companion. ' He is a good, kind-hearted man, but is rather eccentric.'

"' I should say so/ I replied.

" The gentleman asked me a great many questions concerning America, and seemed interested and amused by my answers.

"' Do you know Baron Rothschild?' I inquired, at length.

"' I have met him several times/ was the reply, ' and I have an appointment to wait upon him today.'

"' Then I wish you'd say to him,' I went on,' that I did not know to whom I was talking this morning, or I would not have said so much; and that he need not have been so huffish about it.'

"'I will do so/ said my acquaintance, laughing. ' You must not mind him. He was a little nettled at it, but will be the first to laugh at the adventure when he recovers his good humour. Good morning.'

" With a bow and a pleasant smile he left me. Just then a workman passed by. I stopped him and asked if he could tell me the name of the gentleman who had just left me.

"' That was one of the younger Rothschilds,' he said, ' and '

“I waited to hear no more, but, pulling my hat down over my eyes, set off at once for my lodgings. I was absolutely afraid to speak to a stranger for a week, for fear he might be a Rothschild.”


Should the following pages prove fortunate enough to be favourably received by the public, they will owe it entirely to their subject-matter. To this, and not to vigour of language or lucidity of style, must be attributed whatever interest they may possess. The Author makes no pretensions to the character of a practised writer and feels that the subject is worthy of a more able and experienced hand; he therefore ventures to solicit the indulgence he so sorely needs for his literary shortcomings, of which no one can feel more conscious than himself. On the other hand, he boldly and frankly claims for his work the merit of perfect and impartial truthfulness; and, in the worda of Montaigne, he conscientiously asserts, with perhaps justifiable pride: “C'est icy un livre de bonne foy, lecteur.”