RISE OF ROTHSCHILD - 5. Rothschild Business Throughout the World: The Rise of a Financial Superpower - Count Egon Caesar Corti - SECRETS OF POWER: Masters of Politics, Strategy & War

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Speaker 1 (00:00):
The Rise of the House of Rothschild seventeen seventy to
eighteen thirty by County gon Caesar Cordy, Chapter five. The
Wrothchild business throughout the world. Through his vigorous intervention, Medinik
had restored peace after his fashion in the Apennine Peninsula.
The Chancellor, however, was constantly apprehensive for the future of

(00:23):
his system and the principle of legitimacy, and dreaded the
spread of liberal and democratic ideas. When the fires had
been quenched at one spot, they burst out at another.
On the broad continent of Europe, attention was now directed
to the Greek Rising and to the civil war in Spain,
which had been continuing since eighteen twenty. In this country,

(00:43):
which had rung a constitution from the king, the opposing
forces of the right and left were still in conflict.
During the summer of eighteen twenty. The radical members of
the Cortez treated the king practically as a prisoner, and
on June twenty second of that year, Ferdinand seven wrote
to the King of France requesting him to send forces
to his assistants, and also endeavored to induce the other

(01:04):
great powers to assist him against his own subjects. The
idea of intervention did not appeal particularly either to the
King of France or to his chief minister, Count de Villel,
although one party, that to which Chadoubriand belonged, was very
much in favor of it. The matter had come to
be one that concerned the whole of Europe, and Medinich
had grown accustomed to intervene decisively in any important European crisis.

(01:28):
He had found that the most effective way of doing
so was through the Congresses of sovereigns, such as had
repeatedly been held of recent years. These congresses gave him
the opportunity of using his persuasive powers to the full.
On October twentieth, eighteen twenty two, another such congress met,
this time at Verona. Medinich against accompanied the Emperor to

(01:50):
Verona as they had to lie back, and, profiting by
their previous experience, they took Solomon Rothschild with them, for
it was obvious that if it were decided at Verona
to apply measures of compulsion to Spain, the resources for
this would have to be forthcoming immediately. As the House
of Rothschild had proved so useful in the case of Naples,
it was desired to make use of it if necessary

(02:12):
on this occasion too. In the case of the Congress
at Libach, Solomon had felt misgivings about leaving Vienna, but
he made no difficulties now. When Solomon arrived at Verona,
he learned from several representatives of the powers there of
a rumor abroad that the House of Rothschild had offered
a loan to the government which had come into power
through the revolution and which was threatening its own king,

(02:34):
or that the Rothchilds had at any rate entered into
negotiations with this government. Such conferences may actually have taken place,
but it was of the utmost importance to the Rothchilds
that Medinich should be reassured. He must not be left
in any doubt as to the fact that their house
was lending its support only to the legitimists and the
conservative regime. Solomon, therefore, two days after his arrival at

(02:57):
Verona hastened to write a letter to the Chancellor refuting
these rumors, Most Gracious Chancellor, the letter ran. On my
arrival at Verona, I was amazed to learn that men
of standing here believe that our house has contracted or
intends to contract alone with the Spanish government. Your Highness
is far too familiar with the sentiments of myself and

(03:17):
my brothers to give such a baseless rumor more than
a moment's consideration. It is so wholly inconsistent with our
general reputation that I do not think it necessary for
me to go into explanations regarding the matter. I will
confine myself to stating that Your Highness may rest assured
that we have never concluded any loan with the Spanish government,
that we shall not conclude any such loan, and that

(03:39):
we have refused such offers as have been made to
us in this matter as decisively as we have, in
your Highness's knowledge, refused similar offers in the past. Solomon
had spoken the truth. He had had nothing whatever to
do with any arrangements with Spain. His brothers, certainly, especially Nathan,
who lived in Liberal England, often did things which they

(03:59):
did not immediate communicate to the other brothers, and which
these learned of only after the fate accomplete. But on
this occasion there had actually been no agreement concluded with Spain.
After handing his letter to Metdinich, Solomon called on GenZ
Alexander Vaughan Humboldt had just left him. Humboldt was attached
to the King of Prussia's suite, and he had been

(04:20):
discussing problems of high philosophy with the pen of Europe
in order to assure himself of Gens's support. During the Congress,
Rothschild held out to him the prospect of further profitable transactions,
and Gens noted with satisfaction in his diary that Rothschild
had discussed with him matters which, although not so high,
were far more pleasant. During the whole period of the Congress,

(04:41):
Solomon and GenZ had been inseparable, and both had derived
the greatest advantage from their association. GenZ introduced Solomon to
the representatives of Russia, and the delegates of the Tsar's
Dominion soon concluded a loan of six million pounds. Apart
from the business prophet realized on this transaction, Uloman contrived
to increase his personal prestige. Rothschild and his Paris brother

(05:05):
had the order of Vladimir conferred on them. Yesterday, Gens
wrote to Pilot, the editor of the Osterra Rai Kishier Biobacter,
which was the most widely read Viennese newspaper at that time.
He would be very much pleased if this fact could
be mentioned in the papers in an appropriate manner in
the near future. I do not feel that this can
conveniently be done in a biobacter. Its proper place would

(05:26):
be in an article on Verona, and as you have
not published such an article yet, there would be something
comic in this being the first item of news from here.
We must, however, do everything possible to satisfy such a
good and loyal person as Rothchild. You might give this
matter your thought. In any case, please see that it
is mentioned as soon as possible in the Algeminas item.

(05:49):
Have the following statement printed in that paper. In recognition
of the distinguished services rendered to the Russian Empire by
the House of Rothschild in various important financial and credit operations,
the MP has conferred the Order of Vladimir upon the
Baron Solomon and James Vaughan Rothschild. Do not say Saint Vladimir,
and do not refer to the class which neither I

(06:09):
nor the Rothchilds know. Some time later, Ghenz had occasion
to send a reminder to his friend and wrote, you
have not replied to me regarding the order of Vladimir
conferred upon the Rothchilds. The Baron is asking me every
day whether you have forgotten about it. He is particularly
anxious that the news should be featured in the Baobacter,
and I do not see why this should not be

(06:31):
done at all events. The news should be mentioned by
you and the Aldemina Zeiding before somebody else prints it
in a misleading and possibly a malicious manner. In the end,
the distinction was duly announced in both papers, and the
news that the Mighty Empire of the Czars was also
having financial dealings with the House of Rothchild appreciably assisted
in raising its credit with the general public. Meanwhile, Solomon

(06:54):
had inaugurated a private service of couriers between Verona and
Paris and Vienna, and the Rothschild's pre ceded to exploit
the news about the Congress, which they thus received in
those capitals before anyone else. At first, it was not
by any means certain whether armed intervention in Spain would
be decided upon, even Metternich was not entirely in favor

(07:14):
of it, and as war with Spain was therefore not expected,
French securities kept rising in value. Suddenly, on the arrival
of a courier from Verona, James Rothschild sold French bonds
to the nominal value of five million francs. The following
day it became known that the banker of Rard, who
was also staying at Verona, had concluded alone with the

(07:35):
regency government, which had been set up by the supporters
of absolute monarchy in Spain for the duration of ferdinand
S captivity. It was certainly natural to draw the inference
that the Congress was taking the side of the king,
and a sharp fall in Brench bonds resulted. The capital
of France reechoed with reproaches against ministers who had constantly
averred that they were determined to avoid war with Spain.

(07:59):
The slump became more and more acute until a few
days later the British ambassador got news from Vienna. It
then became generally known that no decision had yet been taken,
and Wellington was continuing on behalf of England to oppose
the proposal for intervention. The securities now began to go up,
and the good news was confirmed by Rothchild. On November eighteenth,

(08:22):
Villel wrote to his representative at Verona to say, the
Rothchild's courier is causing our securities to rise again. He
is spreading the news that there will be no intervention.
I do not believe in these deceptive booms, which entail
fresh variations in the rate of exchange and heavy losses
to many persons, especially when there may be a risk
of war later. The House of Rothschild was thus using

(08:46):
the general political situation for the purpose of doing profitable
business because it was able to get news early. James
had been alarmed by the contradictory reports that had followed
so rapidly upon one another. Solomon had confidentially informed him
that important decisions were obviously pending at Verona, and that
the French government would play the leading part in them.

(09:06):
Solomon suggested that it would be exceedingly useful if James
would come to Verona personally. James quickly decided to make
the journey, and on November twenty second, Solomon introduced his
brother James to ghents at Verona. On the following day,
the two brothers dined with Prince Mednik. A few days later,
on November twenty sixth, Solomon planned to take advantage of

(09:28):
his brother James's presence in Verona and go himself to Vienna.
Genes had just given him a secret report on the
Congress and several letters which he wanted taken to Vienna,
but a post from Rome informed him that their brother
Karl was shortly to arrive from Naples. Solomon postponed his
journey for two days. The three Wrothchilds had thus an

(09:49):
opportunity thoroughly to discuss Neapolitan and Spanish affairs and the
probable result of the Congress. After this, Solomon and James
returned home. At the beginning of the Congress, Solomon had
been sending so much news from Verona to Vienna that
the bulky Rothschild postal packets attracted the notice of the
postmaster at Chardaine. He felt called upon to draw the

(10:12):
authority's attention to this exceptionally voluminous correspondence. This naturally did
not particularly excite them, since numerous communications were entrusted to
the Rothchild couriers by Medonik against themselves. The decisions of
the Congress did finally lead to armed intervention by France
in Spain. The Congress passed off with great brilliance and

(10:33):
duly impressed the world. At large. The ancient arena at
Verona was the scene of a magnificent banquet which was
attended by all the members. Rossini, who was then at
the height of his creative powers, charmed the members of
the Congress with melodies from his operas. Solomon, who had
known Rossini in Vienna, introduced him to James at Verona,

(10:54):
and this proved to be the starting point of a
friendship which was to develop into intimacy in Paris, especially
during the last ten years of their lives. Solomon dealt
with Prince Mednick's personal expenditures at Verona, amounting to sixteen thousand,
three hundred seventy lira. As indeed, the House of Rothschild
had furnished all the cash spent in Verona, drawing it
partly from France and partly from the various money markets

(11:17):
of the Lombard Venetian Kingdom. The relations between Austria and
that House were constantly growing closer, and her leading statesmen
were scarcely able to refuse any request put forward by
one of its members. On September thirtieth, the Commercial Department
of the Treasury received an application from Nathan asking to
be appointed Austrian Consul General in London. He pointed out

(11:39):
not only that he had punctiliously performed the duties enumerated
in his official instructions, especially in the matter of rendering
assistance to Austrian seamen, doing so without asking for any compensation,
but that he was the sole consular representative of a
foreign power in London who had not the rank of
Consul general. He promised not to relax his watch on
Austrian commercial interests the future, and also most conscientiously, to

(12:02):
carry out any instructions which he should receive. The Commercial
Department of the Treasury strongly supported this application and Medinick
send it forward to the Emperor with the following memorandum.
The said Rothschild has for a considerable period occupied the
office of Austrian Consul in London, to the general satisfaction
of his chiefs, and in a disinterested spirit, has carried

(12:24):
out his duties, often involving personal sacrifices from which he
never shrank where the prestige and the interests of Your
Majesty's service were involved. Your Majesty is moreover graciously acquainted
with the services rendered by his house to the Imperial State.
The incongruity of his present rank in relation to the
commercial agents of other foreign powers in London, who generally

(12:45):
are styled consul general, cannot fail to injure his official prestige.
Medinich also pointed out that James in Paris already had
the title of Consul General, and Emperor Francis accordingly granted
the application. So Nathan now held the same position in
London as his brother in Paris. That city was the
center now of Rothschild enterprise. The question of intervention in

(13:08):
Spain was still the dominating issue, and as in this
matter England was sharply opposed to the conservative groups in Russia,
Austria and France, it was inevitable that there should be
a corresponding conflict of opinion within the House of Rothchild. Metternich,
with his legitimist policy, had Solomon completely in tow Amskill
was not so prominent beue owing to the Jewish problem

(13:30):
at Frankfort, he had to follow the direction indicated by
his protector Metternich. While James in Paris was so closely
bound up with the leader of the Ministry, Count de
villel and anticipated such advantages from this connection that he
too was compelled to fall in with the conservative group,
who were all powerful on the continent. Karl at Naples
was also a dependent upon Austria, so that Nathan in

(13:52):
Liberal England was in an awkward position with regard to
his four brothers on the continent. As a naturalized Englishman
and as banker of the richest state in the world,
he personally would have wished to fall in with its
political opinions as completely as possible. Indeed, it was necessary
that he should do so, as otherwise he would speedily
have lost his connection with the British government and any

(14:14):
possibility of doing big business in the future. After the
conclusion of the indemnity transactions in Paris, James had succeeded
in getting on good terms with the Bourbon Court, and
especially with the leading minister, Count de Villel. He had
often been able to oblige influential persons in matters of finance,
a fact which assisted him in his efforts to consolidate

(14:34):
his position. Soon after his appointment as Consul General, James
had taken the magnificent poleff Fouchet, formerly occupied by Napoleon's
Commissioner of Police, and the magnificent style in which he
lived served to enhance his prestige. He was still a bachelor,
a fact that somewhat limited his social activities, but also
made it easier for him to make his way into

(14:55):
exclusive circles, some of which still showed great reluctance to
admit the Jewish parvenue and only did so when personal
interests made it appear desirable. Conditions, however, gradually improved in
this respect as his wealth increased. James also benefited by
the fact that the great Paris bankers of that period,
such as la Fitt and Casimir Purier, were either liberal

(15:17):
or indeed almost revolutionary in their views, while others, such
as the lessert Mallet and Hattinger were too nervous to
undertake risky ventures on a large scale. In eighteen twenty three,
James offered to place funds at the disposal of the
Leel and informed him that he was prepared to come
to his assistance in alleviating the financial embarrassments of the treasury.

(15:38):
James's first important transaction with the French treasury consisted in
undertaking the sale of six per cent royal bonds when,
at the end of January eighteen twenty three, the campaign
against Spain was decided upon. James gave Villel to understand
that he was prepared to deal with the big loan
to which the Chamber had agreed. Villel bethought himself of

(15:58):
the precedent of Austria at Naples, and suggested that Rothschild should,
in a similar way raise the money necessary for intervention
in Spain through negotiating a Spanish loan payable to France. Fundamentally, however,
James was as reluctant as Villel to embark on hostilities
against Spain, for these might seriously interfere with his financial scheme.

(16:19):
His attitude is revealed in some intercepted correspondence between him
and a Spanish banker called Bertrand Delise, who was endeavoring
in association with the Liberals to secure the fall of
the Spanish ministry in order, if possible, to prevent the
French from intervening. San Miguel's Spanish ministry had, in view
of the French Menace, obtained authority from the Cortes to

(16:40):
change the seat of government and the royal residence. The
King would gladly have dismissed the government, but the menaces
of an excited populace caused him to refrain from doing so.
If the fall of the ministry could be brought about
in some other way, France might perhaps be induced to
regard this as indicating an improvement in the position and
abstain from taking action. Such was the state of affairs

(17:03):
when a letter arrived from Rothschild's confidential correspondent at Madrid.
We are at this moment, wrote Bertrand de Leise, to
the House of Rothschild in Paris, struggling to overthrow the
ministry and to replace it with persons better qualified to
guide the ship of state. I am convinced that we
shall succeed in our endeavor, and I am therefore anxious
that you should bring these facts to the attention of

(17:25):
your government, so that they may cease taking any hostile action.
I am asking you to do this in a confident
expectation that a solution may be found consistent with the
honor of both nations, which will assist in maintaining peace
throughout Europe. I hope that you will support me in
this endeavor as much as possible. But if you see
that nothing can be done and that a breach is imminent,

(17:46):
I hope that you will send me a special messenger
at my expense, so that I may regulate my actions
accordingly in settling my financial affairs. The same correspondent subsequently
attempted in various ways to communicate items of important political
and business news to James, but these appear to have
been intercepted, as they never reached their destination. The first

(18:06):
letter to get through seems to have been one dated
March twenty ninth, eighteen twenty three, in which Bertrand de
Lease wrote, it is our desire to avoid war, and
in order to carry through the business that we have
in hand, I feel I should let you know the
line of action which, in my view, your government should
adopt to this end. For one thing, I feel they
should cease any hostile operations until new ministers have been appointed.

(18:29):
In this way we might perhaps reach an agreement satisfactory
to both nations, and one that might also bring us
advantages of a general nature, and also such as we
may turn to account in our business. The writer of
this letter proceeded to deal with the current situation in
Spain in some detail, and concluded with the warning it
is important also to use every precaution in carrying on

(18:50):
this correspondence, for it would be exceedingly painful to me
to be compromised in this matter, in which I am
convinced that the public interest is identical with my personal interest.
In spite of the precautions that were presumably taken, the
correspondence fell into the hands of royalists and was duly
brought to the attention of Medenich at Vienna. He was
highly indignant that one of the Rothchilds, who always pretended

(19:13):
to be so conservative and denied that they had anything
to do with liberals, should suddenly be discovered in dealings
of this character. Gense was instructed to speak to Solomon
about it. Solomon was at great pains to invent an explanation,
and Gens noted in his diary, I have just had
a little discussion with Rothschild about the incredible story of

(19:33):
his brother in Paris, who is suddenly appearing in the
role of intermediary between the French ministers and a revolutionary
banker at Madrid. Meanwhile, the French had seriously embarked upon
intervention in Spain. On April seventh, eighteen twenty three, the
Duke of Angoulim, nephew of the King crossed the Spanish frontier.

(19:54):
He encountered no opposition and pressed on far into the country,
towards the capital Madrid. It was Villel's task to provide
the monies required by the French army, and now that
the dye had been cast, James Rothschild hastened to offer
his services to the minister. His first action was to
hand the minister a letter of credit in favor of
the Duke of Angoulim address to a bank in Madrid

(20:15):
that was closely connected with the firm of Rothschild. Villel
forwarded this document to the Duke. This is, he wrote
in a covering letter, in the nature of a courtesy.
But I was afraid of offending Rothschild, who has been
and still as exceedingly useful to us in our financial difficulties.
If I did not accept it. As soon as the
army has entered Madrid, Rothschild will send an official of

(20:38):
the firm, or perhaps one of his brothers, to that city.
I would request your Royal Highness to grant this banking
firm your very special protection, as its intervention may be
exceedingly useful to us in the future, both in the
matter of rendering financial assistance to the army, and also
in the matter of the Spanish loan, if such a
loan can be usefully launched. Angoulin did not show or

(21:00):
Villell's view that the letter of credit was to be
regarded as a mere courtesy I consider. He replied that
it would be exceedingly useful to avail ourselves of the
facilities that Rothchild enjoys for providing ready money at Madrid.
He held that this was a speedier and more economic
method than sending money from France. He fully agreed that

(21:20):
Rothschild should be treated with consideration, as recommended by Villel,
who it was clear had learned much from the Austrians
in Naples. James was thus placed firmly in the saddle
and was enabled to carry out his measures under the
protection of the two most powerful men in France at
that time. It is true that Villel revealed a certain
attitude of suspicion toward bankers in general, regarding them as

(21:43):
voracious beasts of prey out for money. On May twenty third,
the Duke entered Madrid without opposition and set up a
regency which was to rule with modified absolutism until the
king should have been liberated from the Cortesse. This government, however,
in spite of its dependence on French troops, soon through
all councils of wisdom and moderation to the wind. In

(22:05):
order to fill its empty treasury. It attempted to arrange
alone with a vrard and an agent of the House
of Rothchild, who had come to Madrid with the French army.
Villel warned Angoulim not to allow the regency to have
a free hand in this matter, for he wrote, where
the body is there, will the vultures be gathered together
to devour it. He referred to the bankers, not excluding Rothschild,

(22:28):
who would undoubtedly have offered the regency oppressive loans. Meanwhile,
the Cortes had carried the Spanish king off to Kadi's,
and Angoulim proceeded to invest that city and to liberate
the king. Kadis is the key to the whole problem,
the Lel wrote to the Duke, by force and negotiation,
the king must be got out of the hands of
the rebels. Your Highness knows that His Majesty has given

(22:51):
you carte blanche to enable you to succeed in this venture,
and that we have plenty of money in reserve, which
is available for any of your requirements. Moreover, with the
letter of credit which I have sent to you, your
Highness can draw bills up to any amount on the
House of Rothschild in London for making payments to those
who may deliver up the King I in order to
meet all this heavy expenditure, villel had been negotiating for

(23:14):
some time for the flotation of a considerable French loan.
The Minister still found his dependence upon the House of
Rothschild irksome, and gave vent to his feelings in a
letter to the Duke. Although I have nothing but praise
for the manner in which her Rothchild has served us
while I was in difficulties. I should like to float alone,
which would make me independent of these people. The cold

(23:35):
facts were destined to turn out rather differently, and through
this loan of twenty three million francs, which was offered
for public tender, bellell was to be bound more closely
than ever to the House of Rothchild. In open competition
with three other banking firms, James Rothchild, encouraged by his
brother Nathan, offered eighty nine point five five per cent

(23:56):
the next highest price offered being eighty seven point seven
five per cent. The importance attached by the House of
Rothschild to the conclusion of this agreement is most clearly
evidenced by the fact that Nathan from London, Solomon from
Vienna and Amskial from Frankfort had all hurried to Paris
for the negotiations. Both parties were delighted with the arrangement.

(24:17):
Thellel was pleased since he had scarcely hoped that such
conditions were possible for France engaged in a venture like
the Spanish intervention, especially in view of the fact that
the country was already burdened with a foreign debt of
four hundred million francs. He reported enthusiastically to the Duke
on July eleventh that the bonds on that date already
stood at ninety one point twenty five and that the

(24:38):
loan had therefore appreciated two and one third percent. The
four brothers did everything possible to extend the European market
for this French loan. Thellll congratulated himself on having got
the loan underwritten at such a high figure and explained
his success as follows. Monsieur Rothschild, whom the King of
Portugal asked for a loan of twenty five million francs,

(25:00):
had the courtesy to ask King Louis the eighteenth for
his permission before consenting. This is an example of the
efforts which the financial powers were making to intervene in politics. Moreover,
Rothschild of London, Rothschild of Frankfort, and Rothschild of Paris
are all here a fact which contributed not a little
in giving me the confidence necessary to fix the minimum

(25:21):
price at eighty nine point five percent. Billel thought that
he had carried through quite a clever deal. But this loan,
which constantly rose in value and reached Parr as early
as February twelfth, eighteen twenty four, proved to be a
new and abundant source of profit to the issuing firm.
Villel now reverted to his scheme that the Duke should
present a skillful ultimatum demanding the liberation of the King

(25:44):
of Spain and his Familyvillel advised that he should bring
money plentifully to bear in this matter, and should have
an unlimited supply of credit at his disposal. Through Monsieur Belen,
the Madrid agent of the House of Rothchild, so that
he could draw bills up to any amount on the
House of Rothschild in London. James agreed that he might
accompany the Duke if he left Madrid. Belen's signature was

(26:06):
sufficient to release amounts which it might otherwise be exceedingly
difficult to procure. Without his assistance, it would be impossible
to use bribery for the liberation of the king. This man,
Villel wrote to the Duke is personally known to the
majority of those whose support we need, and it will
be much more attractive to them to receive the price
of their infamy secretly in London than to be paid

(26:28):
in gold, which they would have to withdraw at their
own risk, from a city invested on all sides. Villel
had entirely forgotten his former feelings about the Rothschilds, and
he had extensive recourse to the convenient services rendered by
the firm at home and in Spain. Your Highness, he
wrote to the Duke, can use the House of Rothschild's
money for all your financial requirements, whether necessitated by the

(26:50):
service of the army or by the negotiations in connection
with the latter its agents. Banking relations with the principal
banking firms of Coddies may be useful to you. He
suppressed any misgivings at having brought Angoulium into such close
contact with Rothchild. Finance and trade, he wrote, are the
friends of peace, but they always wished to secure peace

(27:12):
at the expense of honor. Nevertheless, having the safeguard of
a man of your Highness's temper and sentiment as a counterpart,
we need not be anxious about allowing these gentlemen to
intervene in Spain. Matters took the course that France had desired.
On June twenty third, eighteen twenty three, the Duke had
reached Kadi's and was prepared to launch his attack. The

(27:34):
forts surrounding the city were speedily captured. The necessity actually
to take the town by storm did not arise. In
accordance with Villel's advice, the Duke made free with the
Rothschild's money. Bills were drawn on Nathan Rothschild to the
amount of nearly two million francs in favor of various
members of the courts and of the persons who held
the king captive. When the military position at Cotti's had

(27:57):
become hopeless, and those who had accepted bribes promoted mutinies
in the garrisons. The Cortes finally broke up and released
the King. It is true that he was first forced
to sign a document containing all kinds of promises for
a moderate form of government in accordance with the Constitution,
but everybody knew perfectly well that he would not keep them.

(28:17):
Thus the King of Spain was not, in the end
required to feel under an obligation to the powerful support
of the House of Rothschild for his release from his
own subjects of the Liberal Party. Neither was the Duke
forced to feel that he owed it to the banking
firm that, after speedily overcoming all difficulties, he was enabled
to return to Paris as a conquering hero. The services

(28:38):
which the House had rendered to the French government, however,
enhanced its prestige at court and with villel to an
enormous degree. James began to surround himself with luxury and
to patronize science and the arts. He furnished his house
at number forty Rue de la fit magnificently. He received
the Cross of the Legion of Honor after the intervention.

(29:00):
The course of events in Spain was, to Mettinich's delight,
exactly similar to what had occurred at Naples. An absolute
monarchy was reintroduced, the liberals being savagely persecuted, the constitution vanished,
the Roman inquisition functioned again, and the government went far
beyond what the French government had wanted to achieve by intervention.

(29:22):
Ferdinand's new absolute government had money troubles no less than
its predecessor, and the king appealed to the Monarch of France,
pointing out that his work was not yet completed and
that he lacked such a financial foundation as would be
provided by a loan. Villel applied to James Rothschild, who,
in conjunction with Nathan and the British bankers bearing in
John Irving, offered a loan of one hundred and twenty

(29:44):
million piastres to be subscribed for its sixty percent. The
bankers demanded, however, that the whole of Spain's colonial revenue
should be mortgaged, this being the only revenue that had
suffered little through the civil war, and in addition they
required that France should give a forema guarantee. An agreement
was not concluded at the time since Bellel replied to

(30:05):
the bankers that his first consideration must be his duty
toward France, he could not agree to a guarantee by
France without endangering its political and financial interests. He would, however,
gladly advise the Spanish government to regularize its administration and
to apply moderation in its general policy in order to
create the confidence necessary for such agreements. These were fine words,

(30:29):
but they offered no tangible security for calculating business men,
and accordingly the bankers withdrew their offer. Metternich and Ghenz
had attentively watched the course of events. Rothschild's relations with
GenZ had become, if possible, still more intimate, and the
sincerity of Gens's diary is attested by nothing more than
by the entries of the sixth and ninth of January

(30:51):
eighteen twenty three. Rothschild called on me in Vienna. Everything
is going magnificently in money in profusion. January ninth. I
have been informed by Rothschild that a remittance of a
thousand ducats is on its way from Russia. Rothchild was
assiduous in impressing gents with the riches and power of
his family on January thirteenth, eighteen twenty three. He favored

(31:15):
him with over an hour's discourse on the position of
his firm and its enormous resources, showing him some eloquent
and exceedingly interesting documents. The firm had in fact grown
so powerful that it now proceeded to conclude most important
transactions in which it had formerly allowed other firms such
as Gaunted and Perish to participate entirely on its own.

(31:36):
The brothers may have learned that the Austrian finance minister
once more had occasioned to think of them. England had
recently demanded the repayment of some old debts owing by Vienna,
and it appeared that Solomon's and Nathan services would be
required again. Metternich and Ghentes were therefore anxious to be
obliging at this time, especially in matters that did not
cost the state anything. They did not have to rack

(31:59):
their brains to find an opportunity of showing their goodwill,
for together with Bourne, Solomon had been hammering at Ghents
about this wretched question of the Frankfort Jews. The growing
power of the House of Rothchild, which had originated in
Frankfort and now had dealings with most of the more
important states, caused the Frankfort Jews to stiffen in their attitude.

(32:20):
They now demanded as a right what they had formerly
begged as a favor. While Solomon and Gense were pressing
Metternich to help the Jews of Frankfort, Solomon's coreligionists that
were carrying on a constant campaign against Count Boll, delegate
and President of the Diet, who was so markedly hostile
to them. Their efforts finally resulted in Count Bull being recalled,

(32:40):
and this constituted an important victory for the House of Rothschild.
Boll's successor, Baron von Munch Bellinghausen, was instructed to settle
the Jewish problem as speedily as possible, since it was
Austria's intention to support such demands of the Israelite community
as were just amskil Meyer. Rothschild was quite un restrained
in his demonstrations of joy. On the day when the

(33:03):
new President of the Diet arrived, Rothchild gave a big
dinner to which all the delegates were invited. I should
have preferred, Munch stated in his report to Metdernik, not
to have made my first public appearance in this manner,
But as the affair had already been arranged, I thought
that I ought not to be too nice. Moreover, I
made the acquaintance of all the delegates before the session.

(33:24):
Matters now began to move. Munch Bellinghausen followed out Mednick's
ideas in quite a different way from Bull, and in
August eighteen twenty two, the question was settled in a
manner highly satisfactory to the Jews. It is true that
many restrictions were still maintained. Thus only fifteen Jewish marriages
were allowed in each year, No Jew was allowed to

(33:46):
possess more than one house, and Jewish trade, too was
not free from all restrictions. The Jews, however, were henceforth
counted as Israelite citizens. The ghetto was done away with,
and they had full liberty of movement within the town.
They regarded these concessions as a victory, and Rothschild gave
a dinner to celebrate them September third, to which he

(34:07):
invited both Bergomasters as well as the delegates to the diet.
The former, however, again stayed away because, as Schweimer said,
they did not feel in a mood for celebrations. The
debentures issued in eighteen eleven under Dalberg's agreement for the
liberation of the Jews were now fully redeemed. This fact
also indicated that the Jews were satisfied. Thus, the matters

(34:32):
in dispute in the Jewish question, which had been pending
for eight years, were finally settled by the Diet acting
in a judicial capacity. The principal credit for this was
due to Rothchild. Both the town and the Jews sent
deputations to thank Baron Vaughan Munch, who did not fail
to report this fact to Metdinich, as he knew well
the importance Mednik attached to this question. The reasons for

(34:54):
supporting the Frankfort Jews were well known in Austria. Count
Stadion had been negotia ciating with Rothschild and Parish, the
underwriters of the last Austrian loan, since the spring of
eighteen twenty two, for a loan to cover the estimated
deficit of twenty million golden. They had stated that they
were willing to underwrite twenty millions at sixty seven and
then at sixty eight point five percent, but Count Stadion,

(35:18):
whose recent experience in such matters had made him more
cautious and critical thought that these terms were not sufficiently favorable,
or were, as he expressed it, oppressive. He therefore looked
around for other offers, and, for the first time in
the experience of the Austrian government, these were forthcoming. Stadium
wanted to borrow only twelve million golden at first. He

(35:39):
fixed the final date for submitting tenders at April fourteenth,
eighteen twenty two. The Paris banker Food, representing a group
of Paris firms, at the head of which was le Fitt,
offered to underwrite the twelve million at sixty nine percent.
Parish and Rothschild made a second offer to take over
the loan at sixty nine and a half, while the
Viennese banking firm of Gamoler offered seventy two and three quarters.

(36:04):
A conference of ministers was summoned for April thirteenth to
consider the tenders. Solomon Rothschild was particularly anxious to secure
the loan if necessary, without the co operation of Parish,
with whom he had recently had several differences, as this
would provide him with a further opportunity for exploiting the
advantages enjoyed by his firm. For the sale of securities

(36:25):
through their branches in the most important markets in Europe.
He learned through Ghans that other firms were not merely
in the field, but had actually offered better terms than his,
and he therefore decided to write to Stadion. When the
Finance Minister went to attend the conference on April thirteenth,
he was handed a letter from the firm of Rothschild
just before entering the conference room. This letter bore the

(36:47):
signature of that firm alone. The firm stated that they
were prepared in any case to offer one half percent
more than might be offered by anyone else for the
loan which was to be issued. The conference first decided
that twenty one xi million gulden should be issued at once,
instead of the smaller amount that Stadian desired. It was
then considered whether or not any attention should be paid

(37:08):
to Rothschild's late offer. The conference was agreed that Rothschild's
letter was manifestly irregular. Applicants have been required to submit
tenders under seal by April twelfth. Rothschild had done so
jointly with Perish, but their offer had been less favorable
than that of Gameoler. The second letter although dated April twelfth,

(37:29):
had not been given to Stadian until the following day.
The minutes of the conference pointed out that the irregularity
of this procedure consists in having failed to observe the
final date imposed upon all applicants for submitting their tenders,
a fact which Rothschild is obviously trying to conceal by
antedating his offer, and also in the lack of precision
in the offer itself. Medinick and Count Zichi expressed the

(37:52):
opinion that Rothschild's offer should not be accepted, but that
it should not be rejected either, and proposed that the
whole matter should be negotiated afresh. With regard to the
French banker Lafitt, whom he suspected of liberal sympathies, Prince
Medinich stated that he feared the banker might be actuated
by other than purely business motives. He added that he

(38:12):
felt similar misgivings regard I. N. G. Gamohler's offer, since
it was possible that he was acting in concert with
La Fit. While Medinich used his influence in favor of
the House of Rothschild, Stadian took the opposite line, adhering
to his view that Rothschild's retrospective tender should be ignored
and that the offer of the firm of Gameoler should
be accepted as the best offer sent in by the

(38:34):
time fixed. Stadian was of the opinion that the financial
interests of the state required that competitive tenders, having been
asked for, it was essential that the conditions laid down
should be strictly observed, and that Rothschild's retrospective offer should
therefore not be considered. This is the first time he
emphasized that the Treasury has had the gratifying experience of

(38:55):
finding several competitors tendering for a loan. They will come
to us again, and perhaps with even more favorable results
in the future, if we prove to them that belated
offers are not considered. If in the present instance we
act otherwise, it may be assumed that henceforth we shall
have no possibility of securing genuine competition, and we may
therefore pay dearly in time to come for any immediate advantage. Finally,

(39:19):
with reference to the objection made to la Fit on
personal grounds, Count Stadion observed that it would be quite
impossible in any case to prevent him from being an
unrevealed participator in a loane, and that even if Rothschild's
offer were accepted, this contingency would still have to be
reckoned with as there was no way of bridging these
differences of opinion. The conference broke up without result. It

(39:41):
was therefore necessary for the Emperor to give the final decision,
With the result that Metinik's views prevailed. The Emperor issued
the following decisions in council on the question whether twelve
or twenty millions should be issued. The general political situation
should be regarded as the determining factor, and Medinik should
accord be consulted. A new date should be fixed for

(40:03):
submitting tenders, indicating that belated offers will not be considered.
Another year was to pass before the new Big Austrian
loan materialized. In April eighteen twenty three, the deficit up
to the end of the financial year eighteen twenty four
was estimated at no less than thirty five million golden.
It was now decided to issue a loan of thirty million.

(40:26):
Four firms, including the House of Rothschild, jointly provided this
sum in cash, receiving thirty six million, five percent to
Benures payable in coin at eighty two golden percent. While
Austria was suffering from these difficulties, her aggressive foreign policy,
especially the expedition to Naples, which was viewed very critically
in England, had given rise to the belief that the

(40:48):
finances of Austria must be in a most flourishing condition
if it had so much money to spend on such objects.
The opposition in the British Parliament had for some time
been reproaching the Ministry for failing to demand payment of
debts which had been incurred by Austria even before the
Revolutionary War, before the system of the English subsidies had
come into effect, Austria had been granted two loans by

(41:10):
England to the value of six million, two hundred and
twenty thousand pounds for financing its campaigns, and in the
excitement of the Napoleonic Wars, this fact had fallen into
the background. With the addition of compound interest, the debt had,
by the time of the Congress of Verona in eighteen
twenty two, risen to an amount exceeding twenty three million,
five hundred thousand pounds. Austria had already been approached at

(41:35):
aix LaChapelle regarding the repayment of the loan, but Medinich
had refused to pay, and all the negotiations since had
proved fruitless. For Stadion definitely stated that if England insisted
upon its demands, it would mean the collapse of Austria's finances,
which had been so laboriously resuscitated when Medinick adopted a
policy at Verona which was opposed to that of England.

(41:56):
Wellington again reminded the Chancellor that his government was pressing
for the payment of this debt. He was not asking
for the whole gigantic sum mentioned above, but was prepared
to waive all interest charges compound and simple, and would
even be satisfied with a capital payment of four million pounds.
This amount, however, Austria must pay in any event. Even

(42:17):
this was a very considerable sum, representing about forty million
golden in convention coinage, and it constituted another dreadful surprise
for Stadium. Medinick realized that it was his policy which
had induced this claim to be brought forward again, and
he endeavored to reach an agreement. In personal conversation with
the British Commissioner, Sir Robert Gordon, who had been dispatched

(42:37):
for this purpose. Various solutions were considered and rejected. Finally,
Medinik offered a lump sum of thirty million golden five
percent adventures at an issue price, which involved the reduction
of the total claim to about two million pounds. He
then had recourse to Solomon Rothschild, asking him to try
to influence the British government through his brother Nathan. Woman

(43:00):
immediately wrote a confidential letter to Nathan on the matter.
The British minister, he wrote, has as yet made no
reply to this proposal. It is probable that England will
not at once unconditionally accept the offer of the Austrian government,
but will attempt in one way or another to obtain
better terms, whatever the reply may be. However, I do

(43:21):
not believe that the Austrian government will vary their original offer.
If it were to act otherwise and all at once
to put in circulation new public securities amounting to so
many millions, the Austrian government would be dealing a severe
blow to its credit, which is being raised by a
business like an intelligent administration to appoint commensurate with the
country's greatness. You are a business man yourself, and will

(43:44):
therefore be best able to appreciate these circumstances, so that
it would be redundant for me to explain myself further.
What I have written has been communicated to me in
confidence by His Excellency Prince Vaughan Metternich, and it is
merely intended to inform you of the general position. In
any case, you may, although only confidentially, for you have
no official instructions, discuss the matter with the Chancellor of

(44:07):
the Exchequer, and endeavor to convince the English of the
fairness of the offer which is being made. As I
am aware of your devotion to the government here, I
feel confident that you will be grateful to me for
giving you an opportunity of proving yourself useful and well
disposed of them in such an important matter, and that
you will show all the wisdom and caution necessary to
assist it in attaining its ends. I hope that you

(44:29):
will be able to inform me of the success of
your endeavors by the next post. Nathan thereupon got in
touch with the Banker's Bearing and Readerving, and also with
the British Government, and succeeded in persuading the government to
agree to a payment of two million, five hundred thousand pounds,
whereas the negotiators, after at first asking for more, finally
obtain from the Austrian government thirty million floor and five

(44:52):
percent cash to ventures at an issue price somewhat exceeding
eighty two and two thirds percent. Stadion agreed to the
offer made by the thing three firms mentioned above, and
on October thirty first, eighteen twenty three, Solomon was able
to send the following report to Metternich, Most Gracious Chancellor.
It is with particular pleasure that I take this opportunity

(45:13):
of informing Your Highness of the pleasant news that, after
considerable effort, I have at last succeeded in collaboration with
my colleagues in London in concluding the transaction with the
English government on the basis of the amount of thirty
million golden five percent Metallik's bonds. I have thus faithfully
carried out the promise made to you on my departure,
and am most happy to have been able to terminate

(45:35):
a matter outstanding for so long, entirely to the satisfaction
of the wishes of the Imperial Government. I have been
expressly requested by my colleague to endeavor to secure that
the Government of His Majesty, the Emperor, shall grant a
commission of two to three percent to the underwriters, in
view of the fact that the transaction is such an
advantageous one to the treasury. Mindful of the just and

(45:56):
loyal principles of the government. Here, I may feel justified
in assuming that if if I submitted such a request,
it would not fail to receive consideration. But the reflection
that my services and my zeal in this matter have
resulted in such definite advantage to the state and affected
such large savings is so exceedingly pleasant that I gladly
renounce the possibility of deriving any further emoluments. I have

(46:19):
made a similar statement recently to His Excellency, Count Vaughan Stadion,
and therefore flatter myself that I have given occasion for
His Majesty to feel satisfied with me, and have earned
his gracious consideration. Your Highness will no doubt deign to appreciate,
with your customary gracious condescension, the efforts that I am
making in the interests of the Imperial State, and I
confidently flatter myself that you will graciously consider a request

(46:42):
with which, lest I should seem a modest I do
not venture to trouble your Excellency, Yet I am waiting
to communicate it to you verbally. I await with extreme
impatience the moment when I shall have the happiness of
seeing Your Highness again and in the best of health,
and when I shall be able personally to renew the
assurances of my most profound regard. As a matter of

(47:02):
hard fact, the whole transaction constituted a bold speculation in
Austrian public securities by the three firms concerned. Their expectations
were fulfilled directly after the negotiations had been concluded. For
as early as January eighteen twenty four, the Metalliks showed
a marked appreciation in value when the conclusion of the
whole affair was reported to Emperor Francis, with a suggestion

(47:25):
that the Austrian mediator Quebec should be commended. Count Zichi
wished to avail himself of the opportunity for obtaining some
imperial recognition for the House of Rothchild. He minuted on
the memorandum requesting the Emperor's confirmation that although the firms
carrying through the settlement of this loan, which had so
materially improved the credit of the Austrian state on the
London Stock Exchange, had indisputably had their own interests in view.

(47:49):
They and especially the House of Rothchild, nevertheless deserved recognition
for the able way in which they had handled the business.
Such a demand for Austrian securities had been produced that
the last loan was already quoted at a premium of
over five percent, while by making their credit available the
firms had succeeded in the difficult matter of satisfying the
English government. Zitchi accordingly proposed for the Emperor's consideration that

(48:13):
the following sentence should be added, and we take cognizance
of the efforts made by the London banking firms which
have so materially raised Austria's public credit. Baron Vaughan Letterer, however,
added that in his view, the services rendered in arranging
the loan in England consisted merely in an intelligent appreciation
of the circumstances, and that on this service the banks
had already realized no inconsiderable profit, as shown by the

(48:37):
prices of the securities published in the English papers. Emperor
Francis drew his pen heavily through Zichy's frill, and took
cognizance with satisfaction of the fact that the matter had
been settled. The whole transaction proved to be one of
the most profitable pieces of business in which the House
of rothschild had ever engaged. The bonds continually increased in value,

(48:59):
their average price in eighteen twenty four being ninety three,
and in eighteen twenty five ninety four. It is obvious
that the brothers Rothschild succeeded in very profitably realizing on
the thirty million golden debentures which they had subscribed at
eighty two and two thirds. It is not possible to
estimate the actual prophet, but according to the statement of Newman,

(49:20):
it already amounted to one million, eight hundred and twenty
four thousand, six hundred pounds at the beginning of April.
Solomon Rothschild's pleasant feelings and the magnanimous gesture with which
he refused a commission or emoluments are thus readily intelligible.
It is not surprising that, since Vienna offered opportunities of
doing such excellent business, Solomon should have grown more and

(49:42):
more attached to that city, in spite of the restrictions
imposed upon foreign Jews. His relatives also were attracted by
the idea of settling there. One of these was a
cousin of Solomon Rothschild called Anton Schnapper, who was about
to marry the daughter of William Vaughan Wertheimstein, Rothschild's Vienna manager,
a Jew who had received the imperial toleration as a

(50:04):
private wholesale merchant. Through Solomon's powerful influence, Anton Schnapper contrived
to obtain an audience from the Emperor and to submit
his request for toleration and permission to carry on business.
Although the Emperor gave his consent, much time elapsed, as
was the case with all applications, before formal sanction could
be given, and the impatient young man decided again to

(50:26):
make application to the Emperor. But in writing, Your Majesty,
the application ran the undersigned desires, henceforward to be included
among the millions of fortunate subjects who enjoy the merciful
and just rule of Your Majesty. I was born at
frankfort Ante Main, and I am the son of honorable parents.
My mother's name having been Rothschild. I have worked for

(50:48):
several years as an assistant in the business of this
well known firm, and acquired such knowledge as goes to
make a competent and honest business man. I now desire
to settle in this city as a wholesale merchant, and
to unite myself in the bonds of honorable matrimony with
the virtuous daughter of the licensed wholesale merchant of this city,
William Vaughan Wertheimstein. My request for toleration and for authority

(51:12):
to act as a wholesale tradesman has already been considered
by all the departments concerned, found to be in order,
and has been submitted to Your Majesty for approval. May
Your Majesty be pleased most graciously to accede to this
humble request and speedily to grant it, and thus establish
a family, which, in return for this priceless favor, will
never weary of beseeching the Almighty in their daily prayers

(51:33):
to grant prosperity to Your Majesty and Your Majesty's family.
Schnapper sent this in with the observation that his first
application was still lying in his Majesty's office. You have
on several occasions. He wrote to Solomon kindly promised me
your support in this matter, and in view of the
bonds of blood and friendship that unite us, I hope
you will have the kindness to concern yourself with it. Now.

(51:56):
Solomon kept his word and requested Medinick very kind findly
to emphasize the importance of this petition quite briefly to Martin,
his Majesty's principal private secretary, as his Majesty's signature was
still required. Metternick's position was such that a word from
him put the matter through at once. Stadion continued to
employ the House of Rothschild in important financial operations. In

(52:20):
February eighteen twenty four, the firm undertook to produce old
two hundred golden bonds to the value of ten millions
for a commission of two and a half percent, if
he were granted new one hundred golden five percent bonds
in return for each two hundred golden bond. Solomon indeed
wanted to increase the sum to twenty million, subject to
the condition that during this period the old debt should

(52:42):
not be reduced, and that the strictest secrecy should be
observed during the whole scheme. The author came to Haffred
Vaughan letter for his opinion, and he at once minuted
that he doubted whether the House of Rothchild would find
it so easy to carry through the business to the
tune of twenty millions. He was to prove right, for
in February eighteen twenty five the House of Rothchild asked

(53:03):
to be allowed to reduce the amount to seven from
ten millions. In the meantime, the older bonds had increased
considerably in value, and the result was a loss to
the firm. The House of Rothschild naturally did not do
all its business as a prophet, but if it ever
failed to do so or actually suffered a loss, the
brothers generally succeeded in their efforts to reduce it to

(53:25):
a minimum, and above all to keep its secret. The
firm's transactions, even outside Austria were constantly increasing in scope,
and its undertakings were beginning to extend beyond Europe to
other continents. Brazil had in eighteen twenty one also imposed
a Cortes Constitution upon its sovereign, the King of Portugal,

(53:45):
with the result that separation from the Mother country was
decreed and the king's son, Don Pedro was proclaimed constitutional Emperor.
This occurred with the support of England, but against the
will of the conservative Eastern powers and especially of Metternich.
While the four brothers on the continent were under metinic sway,
James alone, allowing himself occasional secret ventures with the liberals

(54:07):
in Spain, Nathan had to do his best to follow
the general political tendencies of Liberal England. When therefore, in
eighteen twenty four Brazil was unable to fulfill its obligations
to another London firm, Nathan intervened, to the great satisfaction
of British statesmen, taking over Brazil's liabilities, and in eighteen
twenty nine he concluded a loan of eight hundred thousand

(54:28):
pounds with the new Imperial State. This enabled Brazil to
put her finances in order, while Nathan did not suffer financially. However,
such loans, being suggestive of liberal sentiments, would naturally arouse
resentment amongst the conservative powers, and they also gave rise
to considerable difficulties amongst the five brothers. Fundamentally, the brothers

(54:50):
were in complete agreement regarding their aims, and they had
no intention, in any circumstances of adopting any definite political line.
Their adaptability made it im possible to do anything of
the kind. But those Wrothchilds who were living within the
sphere of Medinick's power, and especially the Viennese Rothschild, were
forced at any rate to pretend that they stood exclusively

(55:11):
for the conservative tendencies represented by medinick system. It was
often exceedingly difficult for them to explain away or put
a good complexion upon Nathan's actions, a fact which frequently
led to embarrassing situations. At this time occurred an event
of great importance to the house of Rothschild. On May thirteenth,
Solomon Rothschild came to see Ghence in a state of

(55:33):
great excitement and told him he had just received news
that Count Stadion had suddenly had a stroke at his home.
A man of the most scrupulous personal honor and the
most indefatigable industry, he was profoundly ambitious, and so permeated
with the spirit of devotion to duty and with a
sense of the importance of his work, that he took
all the vicissitudes of his difficult office deeply to heart.

(55:55):
He therefore used up his reserves of energy more quickly
than other men. The excitement and the strain of the
events of the last few years had prematurely worn him out.
He died two days after the stroke, and was succeeded
in office by Count Nadeste. This was a serious loss
to the Rothchilds, for they owed it to Stadium more
than to any one else that they had come to Vienna.

(56:17):
It is true that during the last years of his
life he had grown much more skeptical and critical in
his attitude toward the brothers, But they were so intimately
connected with Austrian finances that a new minister, had he
wished it, would have had the greatest difficulty in eliminating them.
Even Metternich, who secretly cherished feelings of suspicion and aristocratic
pride toward the Jewish Parvenus, never thought of such a thing. Moreover,

(56:42):
Ghens and the Rothschilds themselves took care that no serious
misunderstanding should arise. As Ghens reports, Rothschild not only repeatedly
saw Mederinich at his office during this period, he also
often had meals with the Prince and Solomon's big dinners
with thirty or more guests, were attended by ministers and
ambassadors and many members of the aristocracy. Through his numerous invitations,

(57:05):
Solomon extended his connection and got ideas for his operations.
The center of gravity of the House of Rothschild's business
was at that time in France. The former leader of
the Royalists and head of the government in that country
had not forgotten the financial assistance rendered by the House
of Rothschild at the time of the Spanish expedition. As

(57:25):
it was his ambition to set France on her feet financially,
it occurred to him that he might avail himself of
the assistance of the House of Rothschild, and this also
at that time France had to pay no less than
one hundred and ninety seven million francs interest on its
public indebtedness. Villel meant to reduce this intolerable burden by
converting the five percent loan, which already stood at par

(57:47):
on February seventeenth, eighteen twenty four, to a loan at
a lower rate of interest, namely three percent. In this
way he anticipated saving about thirty four millions annually in interest.
Mllel thought out his scheme and then made a detailed
proposal to James Rothschild in Paris. The minister showed that
in spite of the expense of the Spanish War, he

(58:09):
could make his budget balance without a further loan or
additional taxation. In these circumstances, he wrote, it appears to
me to be possible to take advantage of the conditions
that have caused public securities in England and throughout Europe
to appreciate in value for the purpose of carrying through
the conversion of our five percent bonds into four or
three percent bonds. Villel asked James to co operate in

(58:32):
this plan, which was not to affect French credit. He
meant in this way to convert no less than one
hundred fifty million bearing five percent interest, and to issue
to the underwriters a corresponding amount of three percent bonds
at seventy five. The minister hoped that the three percent
bonds would also soon rise in value, and he offered
to allow the underwriters to keep the saving in interest

(58:53):
during the first year after the conversion of the bonds
bearing one hundred and fifty million in annual interest had
been effected. James immediately informed his brother Nathan in London
of the French Finance Minister's proposal for this gigantic transaction.
All the brothers, and especially James, tacitly recognized Nathan as
having the best financial brain. His connection with the British

(59:16):
government also made him the most influential of all the brothers.
The Finance Minister not only had sent his proposal to
James in writing, but also had repeatedly discussed it with
him personally, and immediately after such discussions, on the second,
third and fourth of March eighteen twenty four, James sent
a private courier to his brother Nathan in London. On

(59:37):
March sixth Nathan, after consulting with the banker bearing, sent
James the following reply, my dear brother, the brother's bearing,
as well as I myself, will be pleased to be
of use to the French government in their plans for
reducing the interest payments, and as the scheme seems to
have been well thought out, there should not be much
cause to fear for the result. At the same time,

(59:59):
it is at absolutely essential that the Finance Minister should
be in complete agreement with us and that no difficulties
should arise in carrying out his intentions. It is quite
clear that the present price of the bonds is maintained
by speculators who have been exceedingly lucky for some time,
and will no doubt continue to develop their success by
further speculating on a rise. Such persons, however, have not

(01:00:22):
the power to assist the Finance Minister in a scheme
embracing such far reaching possibilities, unless it be supported by
such eminent capitalists as Messrs Bearing in Rothschild. I am
sending you the draft of a scheme which I should
like to have submitted to the Minister, and the success
of which would undoubtedly be of enormous importance to the
country and to the government. In this drafted scheme, Nathan

(01:00:44):
explained that the Finance Minister would have, first of all
to secure the Chambers consent to the operation, the government
being allowed a completely free hand to carry through in
the most advantageous way possible, as was done in similar
cases by the British Parliament. In essentials, Nathan follow Villel's
proposal that he should jointly with Bearing underwrite one hundred
and fifty million three percent bonds. He asked only that

(01:01:08):
in the event of the operation being less successful than
was anticipated, the Minister should be authorized by the Chamber
to issue treasury bills up to one hundred million francs,
so that in such a case, Bearing in Rothschild would
be able to get money by cashing these bills and
would not be forced to sell the bonds. If the
results work out satisfactorily, wrote Nathan. The firms of bearing

(01:01:28):
In Rothschild, who will apply out their energy and risk
their property in carrying out the French Minister's scheme, must
expect to receive as their reward the profit which this
operation will yield. During the first years, the Minister must
persuade the bank to discount at three percent, and also
to lend money on the bonds. His Majesty will thus
be in a position when the Chamber reassembles to inform

(01:01:51):
his subjects and the whole world of the flourishing condition
of French finances, and that too, directly after a war
which has restored the Spanish Bourbons to their throne and
to the hearts of their people. If the whole operation
were to go through successfully, and if one hundred fifty
million of annual interest charges were really to be cut
down from five per cent to three per cent. The

(01:02:12):
saving effected by the French government would run into many millions,
and the House of Rothschild was to receive the benefit
of the first annual saving. Thus made Villel and the
two firms soon arrived at an agreement. Nathan had applied
his experience in British transactions of a similar nature, and
the whole matter had now to be submitted to the public.
When the Chamber reassembled, the King of France referred to

(01:02:34):
the contemplated operation for reducing the rate of interest payable
on the public debt. The proposal came as a surprise
to the public. The bonds were held by many thousands
of small people, and the news made a great sensation
because innumerable investors felt themselves hit, and most of the
bondholders understood only that they would in future receive three
francs interests instead of five. Meanwhile, the bonds had been

(01:02:58):
driven up to a still higher figure, reaching one hundred
four and one hundred six. Each man felt himself threatened
in the possession of this valuable paper, and a storm
artificially raised by Villel's enemies broke out. This was increased
by making enormous play of the government's statement that the
former emigres should be compensated out of these savings. Vincent,

(01:03:19):
the Austrian ambassador in Paris, reported that these operations would
furnish the banking powers with fresh fields of gain, and
that their avarice would lead them to suggest similar plans
to all other governments. The scheme met with harsh criticism
in all quarters, the most devastating being contained in a
report from Paris to Metternich, which concluded with the words

(01:03:39):
the Rontiers are wild with indignation, but thellel will attempt
nevertheless to carry the thing through, for he is a
minister quand meme. The King was so upset that he
did not dare to show himself in the streets of Paris,
fearing demonstrations by the small bondholders. Nevertheless, at the expense
of his popularity, he consistently support warded the plans and

(01:04:00):
intentions of his Prime minister. There were exceedingly severe critics
of the role which the House of Rothschild played on
this occasion. Buvrard attacked them with special severity in his memoirs, as, however,
he belonged to the party which was hostile to the
rothschilds his statements can be accepted only with reservations. There

(01:04:21):
was no immediate prospect of the House of Rothschild making
either profit or loss, for the proposals were carried in
the Lower House by a very small majority, while the
members of the Upper House, most of whom had strong
personal interest as bondholders, rejected the proposal on July third,
at the instigation of chadowbyand thus the scheme failed. Ghens

(01:04:43):
does not seem to have been speaking so well of
his friend Solomon at this time, or possibly he wanted
to impress Medonik with the fact that he could assert
his independence of the House of Rothschild. In any case,
he wrote to the Chancellor on June eleventh, eighteen twenty four,
I am secretly pleased at Vellel's finance operation has not
gone through. It will do no harm if that gentleman's

(01:05:04):
arrogance is somewhat reduced. Besides, the scheme itself was exceedingly
unjust and cruel, and France will certainly be impressed by
the fact that the hundred thousand families who would have
been hard hit by it oh the fortunate event entirely
to the aristocratic opposition. Also, there can be no harm
in the coalition of big bankers having suffered a rebuff
which will somewhat damp their ardor for getting new business.

(01:05:27):
Everything must have a limit, and the all powerful firms
were beginning to go beyond theirs. They obviously had a
fully prepared scheme for carrying through similar reductions and interest
in all the principal states. It will now be as
much as they can do to get out of the
French scheme with a whole skin. And if I were
Solomon Rothschild, I would retire with all my millions after
losing such a battle. If this remark was meant seriously,

(01:05:51):
Gens was to prove very much mistaken. It was not
the habit of the Rothchilds to throw up the sponge
at the first reverse. Moreover, one must be cautious in
drawing conclusions from a perusal of the letters that passed
between the brothers and Austrian politicians, as the letters suggest
that they were inspired by unqualified devotion to the state
of Austria, which would not have been consistent with their

(01:06:13):
position with regard to other governments. Karl Rothschild at Naples
in particular, soon realized that it would not be at
all advisable for him to be regarded there merely as
the agent of a foreign power. The occupation by the
Austrian troops could not last forever, and it was all
the more necessary for him to cultivate relations with the
local authorities, since he was strongly inclined to settle permanently

(01:06:35):
in Naples and to found a new branch the fifth
of his house there. As the King and the members
of the royal family at Naples were always in need
of money, Karl had several opportunities of obliging them. His
constant business dealings with the Finance Minister Medici resulted in
their getting on very good terms in spite of the
payments to Austria. While on the one hand, the Rothchilds

(01:06:58):
assured Austria of their lifes anxiety to see the state
paid by Naples, Karl protested to Medici that he would
do everything he possibly could to lessen the burden that
Naples had to bear. The results soon became apparent. Medici
began to examine and criticize the accounts sent in by
Austria for the maintenance of the troops. Ficklemont now lamented
the fact that the sums to be paid by Naples

(01:07:20):
had not been fixed once and for all, and demanded
in eighteen twenty two. He suggested that in that case,
Medici would not have had time to examine Austria's disbursements
so closely. The real reason, he stated in a report
to Vienna that he is induced to increase his demands
and to make difficulties lies in the fact that he
obviously knows of the savings that we are affecting, as

(01:07:43):
Rothschild is transmitting them to Vienna. We may practically assume
that Medici is bound to know of them, for roth's
Child's staff is in too close touch with Medici's for
this to be avoided. It would have been better to
leave this business to the Quartermaster's Department of the Army,
as was done in the case of the first occupation
of Naples. In that case, nobody would have known the
amounts that we transmit to Vienna, and we would also

(01:08:05):
have saved the charges which we pay to the House
of Rothschild. Our departments send in exaggerated accounts, and I
should not like to have the task of defending them.
It is exceedingly annoying that the figures made up by
the Account's department should be submitted to a foreign government
without revision. This is the most certain way of compromising US.

(01:08:25):
It was a bold admission to state that the expeditionary
force was being used to get more money out of
Naples than the expenses actually incurred. But Count Ficklemot must
be given considerable credit for the fact that he opposed
these exaggerated demands and pointed out that the annual claim
of thirteen million ducats sent in by Quartermaster General Roller
was gaining for the Austrian the enmity of the whole country.

(01:08:48):
The King also was forced gradually to realize that he
would not much longer be able to dissociate himself from
the movement that pressed for the recall of the Austrian troops.
For Medici daily reminded him of what terrible burdens the
occupytation imposed upon the kingdom, and how his sovereignty was
limited thereby. But the king feared the outbreak of another revolution,
and as he did not trust his own soldiers, he

(01:09:10):
attempted to recruit Swiss regiments. These negotiations came to nothing
because of the expense of raising the troops The King
then proceeded to recruit in Ireland. The brother's rothschild had
very skillfully introduced this idea to him. Great disturbances had
broken out in that country as a result of the
wretched conditions under which the poor peasantry, oppressed by their landlords,

(01:09:33):
were living. Nathan had come into contact with an Irishman,
the Irish London banker Callahan, who thought that the British
government would also be in favor of such recruiting, as
it would draw off dissatisfied, in poverty stricken elements of
the population. Nathan saw the opportunity of killing three birds
with one stone. He would be rendering a service to

(01:09:54):
the English government by diverting a troublesome element to the
Ring of Naples, by providing the neutral troops that he
so much much wanted, and in addition, he would do
good business for himself. It was Nathan who, having prepared
the ground in England, advised his brother Karl to make
a proposal on these lines to the King of Naples.
He enclosed the Irishman's letter, which stated that the difficulties

(01:10:16):
that might previously have been put in the way of
such a scheme had disappeared. Now a new government had
come into power. Callahan stated emphatically that the overpopulation of Ireland,
where it was scarcely possible to keep body and soul together,
was at the root of all the trouble, and that
it was positively desirable that some of the population should emigrate.
Carl Rothschild handed the letter to the Minister Medici, telling

(01:10:39):
him of Nathan's proposal. Medici hastened to inform the King
of both these facts, the King's one wish being to
have at last some sense of security. Shortly afterwards, King
Ferdinand fell ill And died on January fourth, eighteen twenty five.
He was succeeded by Francis I, who was personally no
less frivolous and extravagant than his predecessor, and was far

(01:11:02):
from possessing a strong character. Under his rule, the state
of the kingdom tended to get worse rather than to improve.
He too had reason to feel anxious about his personal safety,
and in eighteen twenty five it was decided to recruit
four Swiss regiments for Naples, and the Irish project was discarded.
The incident illustrates how the Rothschilds would apply their energies

(01:11:24):
in the most varied spheres if there were any prospect
of rendering a service to those in power and incidentally
filling their own pockets. Meanwhile, James was actively engaged in
negotiations in Paris for a new Spanish loan, which the
Madrid government wanted to put through at any price. Busy
though he was, he contrived to steal time to make

(01:11:44):
a journey to Frankfort in early July eighteen twenty four
in order to marry his nineteen year old niece, Betty,
the daughter of Solomon. He was acting in accordance with
the wish of his dead father, which had come to
be regarded in the family as an unwritten law that
the son should refrain as as far as possible from
introducing other families into their circle by marriage, and should,
in no circumstances marry a Christian. Even on this journey,

(01:12:08):
James took with him private letters and despatches reporting on
the situation in France from the Austrian ambassador to Prince Medernik,
who was staying at his country place Johannesburg for going
his honeymoon. Immediately after the marriage, James had to return
to Paris as his brothers Karl and Solomon, were there
carrying on discussions with the Spanish negotiators. The three brothers

(01:12:30):
decided that one of them should go to Nathan in
London with a Spanish plenipotentiary and ask him to try
to persuade the House of Bearing to participate in the loan.
The Rothchilds, however, demanded that the seventy two millions which
Spain owed to France for her intervention should be included
in the loan. To this proposal, the Spanish government raised objections,

(01:12:50):
as the Rothchilds in any case had little confidence in
Spanish conditions and tried in Vain to secure a guarantee
from other powers. The negotiations on this occasion also came
to nothing. On September sixteenth, eighteen twenty four, King Louis
the eighteenth died, His brother, the former leader of the Conservatives,
succeeded to the throne as Charles the tenth. He was

(01:13:13):
already sixty seven years old and firmly convinced of the
necessity of still more definite reactionary measures, as well as
being full of religious intolerance. Villel remained in office for
the time being, so that as far as the Rothchilds
were concerned, there was no immediate change in the political
and financial situation in France. During this period, their business

(01:13:35):
expanded in all directions. Nathan founded a big insurance company
in England, the Alliance Insurance Company. Amskill was collaborating with Bethmann,
Gaunted and Brentano in a scheme for founding a bank
at Frankfort, although through the opposition of the Senate it
came to nothing. As the Rothchild's business expanded, their correspondence
naturally became more voluminous, and they found it necessary strongly

(01:13:58):
to reinforce the system of couriers with which they had
covered Europe. This circumstance entailed the consideration of the question
whether their correspondence could be more closely watched. In this connection,
the suggestion made by a Milan postmaster is illuminating. I
have often noticed. He reported to Vienna that the Rothchild clerks,
who travel as couriers from Naples to Paris about once

(01:14:20):
or twice a month, take with them all the despatches
of the French, English and Spanish ministers accredited in Naples,
Rome and Florence. In addition to this, not inconsiderable correspondence.
They also deal with the communications passing between the courts
of Naples and Rome and their legations at Turin, Paris, London, Madrid, Lisbon,
et cetera, as well as all private letters that are

(01:14:43):
of any importance. These couriers travel via Piacenza. As we
have an Austrian garrison there under the command of the
reliable Colonel Ebel. It might perhaps not be impossible to
induce one or another of these clerks to hand over
their dispatches for our perusal. Such a an examination should
yield profitable results, especially if we wait for a favorable

(01:15:04):
or important moment. A room at Pachenza under the protection
of Austrian soldiers would be all that we should want
in order to do everything necessary without attracting attention. Since
diplomatic correspondence was involved, this proposal concerned the Chancellor and
was duly brought to Metinich's notice. He felt that it
would be awkward to accept the suggestion. The scheme could

(01:15:27):
turn out to be a double edged weapon, as he
himself often made use of the Rothchild couriers, and matters
of the greatest secrecy might come to the knowledge of
a subordinate postal official. On the other hand, Medinich would
have been exceedingly glad to get hold of the private
correspondence between the brothers Rothschild, and as the technical term went,
to submit it to manipulation. The result of these considerations

(01:15:50):
was the issue of the following order. The couriers of
the House of Rothschild, passing through Lombardy on their way
from Paris to Naples or from Naples to Paris ar
when carrying dispatch bearing the Seal of the Eye and
a consulates General in those cities, to be regarded and
treated as official couriers. If, however, they should be found
carrying any letters which have nothing to indicate that they

(01:16:11):
are of an official nature, such letters shall be subject
to the usual regulations in force. Hormayer, the former director
of the Vienna State Archives, who had been banished because
of his association with the Archduke Johan in his venture
for founding the so called Alpine Kingdom, was a bitter
enemy of Metternich and the Emperor. He was thoroughly familiar

(01:16:32):
with the manner in which correspondence was tampered with, and
used this knowledge for making a violent attack upon Medinich
and Solomon Rothschild. He even went so far as to
state that Medinich had, in agreement with Solomon, waited at
fischermand two stages from Vienna for a post bearing important
news from Constantinople, and held it up for two days.

(01:16:53):
This was done to gain time in order to have
two or three days to rig the market and to
make some hundreds of thousands for the chance Zichy and
the rest of the pack of thieves, with the German
fortress caretaker Rothschild, the king of the Jews, and the
Jew of Kings at their head. As far as Metternick's
relations with Rothschild were concerned, these exceedingly offensive allegations were

(01:17:14):
far from the facts. But it certainly was possible through
holding back news received by courier to gain time for
profitable deals on the exchange, and this was no doubt done.
The firm of Rothschild, which had now literally attained world
wide dimensions, was to enter upon a difficult period. The
long years of peace which England was enjoying led the

(01:17:35):
country to seek profitable investment for the enormously increased wealth
which it had acquired since the successful termination of the
Napoleonic Wars. There was also an increasing tendency to unsound
speculation and a flood of new flotations. As the Central
and South American republics freed themselves of Spanish dominion, they
seemed to offer desirable opportunities for doing business in agricultural

(01:17:58):
produce and minds. At the end of eighteen twenty four
there was feverish activity in the city. Companies sprang up
like mushrooms, and millions of pounds in cash were subscribed.
Almost all the principal London firms took part in this movement,
but the Bearings and Rothschild, who regarded it as unnatural

(01:18:18):
and artificial, held aloof the year eighteen twenty five proved
that they were right. The South American mining ventures collapsed,
and numerous undertakings, apparently on a solid foundation, experienced the
same fate. In a crisis that was becoming more and
more general and was spreading from London to the whole
of Europe. Consuls fell appreciably, and foreign public securities threatened

(01:18:41):
to follow their example. In these difficult circumstances, Wellington remembered
the signal services Nathan had once rendered to him under
the much more dangerous conditions of war. He consulted him
as to how the crisis should be met, and Lord
Liverpool's government followed Nathan's advice. Nathan had tended to go
to Paris to meet Metdterinich, who was staying there in

(01:19:03):
eighteen twenty five, but in view of the critical economic situation,
he could not think of leaving London and wrote the
following letter to Metternich. It has been my daily endeavor
to travel to Paris in order to express to you
the gratitude IO for the gracious and fatherly kindness which
your Highness has shown to the Rothschild family for so
many years. The date of my journey was actually fixed,

(01:19:26):
but an entirely unexpected event unfortunately frustrated my intentions. The
British funds, which had reached a very high level, have
fallen rapidly because of incorrect inferences drawn by the English
from the meeting of Sovereigns. I am accordingly forced to
remain here to prevent, if possible, any further fall, the
government being unwilling that I should be absent at this time.

(01:19:48):
I hope your Highness will not misinterpret my absence and
will appreciate the obvious urgency of the matter which detains me,
since if a further fall in the funds is not
speedily checked, the movement will spread abroad and even affect
the Eye and are Austrian funds. Nevertheless, I cherish the
hope that financial circles here will soon regain their confidence,

(01:20:08):
and am looking forward to making the journey then and
waiting personally upon Your Highness. Meanwhile, I beg that Your
Highness will graciously accept my written expressions of thanks in
the spirit in which they are offered, as proceeding direct
from my heart. For I pray constantly to the Almighty
that our beloved Sovereign Emperor may long be spared, and
that your Highness may flourish thanks to Nathan's skill. The

(01:20:31):
developments in England did not result in excessively serious losses
to the House of Rothchild in spite of the crisis
through which that country passed, but the firm was severely
affected indirectly by the commercial crisis in Paris. In spite
of the change in the general situation, the French minister
Villel had adhered to his conversion scheme, and although the
Rothchilds were much less enthusiastic about it than they have

(01:20:53):
been a year ago. James was so closely bound up
with the French minister that when Villel took the scheme
up again in May eighteen twenty five, he could not
stand entirely aloof He certainly did not conceal his misgivings.
While Mettinich was in Paris, James openly said to him
that it was wrong of Thelel to resume the operation.
At that time. James was more explicit in the following

(01:21:16):
statement to the Austrian ambassador, Baron Vaughan Vincent there are
times when such an operation may be opportune. Last year,
the Finance Minister was assured of the success of his scheme.
He was supported by powerful firms, and a large volume
of English money was available for investment in France. But
now it is flowing into other channels. The return of

(01:21:37):
the capital sums that find their way to America is
only partial and much slower. Most of the banking operations
in Europe are not carried through on a cash basis,
but this is not the case in America. The operations
of mister Huchinson in England are moreover, exactly contrary to
those of m. De Villel. When one also considers the

(01:21:58):
constant complaints in the press, which brings the measures proposed
by the Ministry into bad odor, one cannot but fear
that it will find itself deprived of the necessary resources. Villel, however,
was not to be restrained. He succeeded this time in
carrying his proposals in the Upper Chamber as well, and
he proceeded to put his long cherished plans into operation.

(01:22:19):
The Rothschilds could not exclude themselves from the scheme, but
they went into it very cautiously. The Paris market was
reacting to the fall and prices in England, and as
success was largely dependent upon a boom in French securities,
the prospects were far from propitious. James remarked to Vincent
on July seventh that it was a long time since

(01:22:40):
he had seen the Paris market so dull. He shared
the antagonism of a certain party toward him de Villel,
and he said it was certainly not his fault that
the House of rothschild was regarded as seriously compromised in
having supported the government. This was a dig at Nathan,
because James was a little jealous of Nathan's outstanding reputation.

(01:23:00):
The difficulties of the whole undertaking were increased through the
public opposition of the authorities at the Bank of France.
This was shown in the fact that they suddenly demanded
the repayment of considerable sums advanced by the Bank to
the Treasury. James was, however, not altogether confident that he
was right in taking up an attitude opposed to the operation.

(01:23:21):
The matter might succeed in the end, and in that
case James would have suffered a humiliating reverse. He accordingly
thought it advisable to say to Vincent as early as
June eighth that, in spite of the Bank's hostility to
Villel and to the House of Rothschild, matters could still
be arranged and Villel's plan would yet succeed. Somewhat later,
after the Chambers had accepted the draft bills, James for

(01:23:44):
a time saw everything in glowing colors, and wrote a
letter to Metternick expressing his changed views. You may now
be assured that Bellel has won his case. The bonds
will be a great success, and he will defeat all
his opponents because he is right. On June eighteenth, Solomon,
who was also staying in Paris, made the following statement,

(01:24:04):
I am now able to say that, notwithstanding all the
vigorous attacks to which m. De Villel has been subjected
hitherto and is still being subjected, in my view, his
financial scheme will go through, and the Count, who enjoys
his Majesty's confidence to an exceptional degree, will be strengthened
in his position, while the enemies of peace and of
the ministry will be deprived for a long time yet

(01:24:25):
of the pleasure of seeing it fall. Medinich condemned this
remarkable change of opinion with the remark. In Paris, Rothschild
said to me that Villel was wrong. It is often
so with the world's judgment. James's first view had really
been the right one. The general financial situation throughout the
world did not, in fact admit of such an operations

(01:24:48):
being carried through. At that time, the government succeeded only
in converting thirty millions to three percent bonds, and these
quickly fell from seventy five to sixty two and sixty three.
Four of the Rothschild brothers, Nathan alone was absent, were
assembled in Paris in August to take counsel regarding the
steps to be taken to limit the loss resulting from

(01:25:09):
the decline in the three percent bonds. They admitted that
they had not reckoned with the possibility of such an
unexpectedly sudden fall. The four brothers finally went to consult
the family oracle Nathan in London, with a view to
taking energetic measures to save the situation. Villel's conversion scheme, however,
could not be improved in any essential Now even the

(01:25:32):
five percent bonds were quoted some points under par at
the end of the year. All they could hope to
do was to limit their losses, and in this they
succeeded to a certain extent. But the whole affair was
an unfortunate piece of business. In other more distant fields, also,
the Rothchilds had not been over lucky in their investments
during that year. After several fruitless attempts at reconquering Haiti,

(01:25:55):
the second largest island of the Antilles, it had to
be surrendered by France on the payment of an indemnity
of one hundred and fifty million francs by the new
Republican government. This government borrowed the necessary money, the loans
being taken up by a French syndicate including Rothschild and
La Fitte. The Republic of Haiti was never able to
meet its obligations, and even though the French government eventually

(01:26:18):
indemnified the two firms for their losses, the transaction had
to be put down as improfitable. Whether the brothers Rothschild
were fortunate or unfortunate in their dealings, their names were
on everybody's lips, Legends gathered around their activities and their wealth,
and they were accredited with the most fabulous schemes by
the general public. Thus the story gained currency in Austria

(01:26:40):
that Rothschild had one day demanded the immediate repayment in
convention coinage of no less than forty million gulden, which
he had lent the state. On being told that it
was impossible to repay this sum, Rothschild was alleged to
have proposed that he should either be handed over the
whole custom's revenue throughout the Imperial Dominion for a certain period,
or be granted the monopos of the purchase of fleece

(01:27:01):
in the Austrian dominions, whereby he would have been able
to dictate the price of textiles. Although these rumors were
obviously untrue. They indicated the estimation of the power of
the house held by the public, whether it was well
or ill disposed. The Wrothchilds were becoming the central figures
in the jokes and caricatures of comic papers. In eighteen

(01:27:22):
twenty five, a caricature making fun of their versatility was
circulated in Frankfort and South Germany. The drawing showed a
roth Child on horseback with samples of all his businesses
wine casks, seeds, buttons, etchings, state securities, umbrellas, pens, magic lanterns,
et cetera, on his way from the north to the
South of Europe. The easily interpreted legend ran blue shield

(01:27:47):
commercial traveler does business in all branches of trade. The
brothers did, in fact engage in every conceivable kind of venture,
and they were approached with all sorts of schemes. Persons
in high places ESPEC victually had recourse to them for loans.
Among them was Marshal de Marmont, Duke of Ragusa, formerly
governor in Ellyria under Napoleon the First. He had joined

(01:28:10):
the Bourbons after Napoleon's fall and got on good terms
with Medinik as a reward for his change of allegiance
in various political services. He was granted an annuity of
fifty thousand francs by the Austrian government in alleged compensation
for a donation allotted to him by Napoleon the First.
The Marshal had again got into serious financial difficulties, and

(01:28:31):
the French government, which did not wish him to be
publicly compromised, advised him to mortgage his Austrian annuity to
Rothchild if the banker would put his affairs in order.
The Duke did apply to Solomon Rothschild, but Solomon wanted
first to make sure that the Austrian government would actually
pay Marmont the annuity until he died. He therefore wrote
to Medinich, I would not have entered into any negotiations

(01:28:54):
in this matter without having previously asked your Highness's consent,
had I not done so at the suggestion Count of Villel.
I am therefore venturing to ask your Highness in this
most humble private letter, whether the assumption of these negotiations
or their continuance is in accordance with your Highness's wishes.
Will your Highness please to be assured that on receipt
of the slightest hint of the contrary being the case,

(01:29:16):
all negotiations will immediately be broken off, and in such
a way that neither Count de Villel nor the Duke
of Ragusa will discover the true reason of the change.
Marmont also wrote to Metternich in order to get his support.
The Chancellor replied cautiously. He thought that the Treasury would
no doubt simply pay the annuity to Rothchild, but the

(01:29:37):
Finance Minister would have to be asked for a special
guarantee to that effect. Everything would be simple as long
as the respective positions of the persons concerned remain the same.
This was rather a dangerous reply, and Solomon wanted to
have various and as Marmont called them, ridiculous guarantees. Rothchild, however,

(01:29:58):
firmly adhered to the position that the Austrian government must
give her full expressed consent to the arrangement if he
entered into it. I am fully aware. Marmont wrote that
this requirement is not flattering to me, and that the
only motive for making it is to obtain guarantees against
the possibility of my mauvaise foi. But for fear of
endangering the arrangement he had to agree. In November eighteen

(01:30:22):
twenty five, the contract was submitted, constituting a speculation on
the part of Rothchild that the Marshal, who was fifty
years old, would live a long time. Metternich, however, would
not agree that Emperor Francis should give his express consent
as contemplated under the contract, because it was impossible to know,
in the case of a former Marshal of Napoleon, whether

(01:30:43):
his political opinions would not undergo changes such as might
cause Austria to cease her payments. If, however, these payments
were mortgaged to Rothschild for the full term of the
Marshal's life, it would not be possible to discontinue them.
The contract was therefore not concluded, and in order not
to rebuff the Llell James lent the Marshal a small
sum on the security of the next installment of his pension.

(01:31:06):
On April thirtieth, eighteen twenty seven, Solomon wrote the following
letter to Metternich. Your Highness will perceive from the enclosed
statement that Marshal de Marmont's affairs are in a state
of the greatest confusion, and he is hard pressed by
his creditors, he is bound to go bankrupt sooner or later.
And in such a case, our Paris branch would be
a creditor to the extent of fifteen thousand francs advanced

(01:31:28):
to the Marshal on the security of the personal annuity
payable to him by the Imperial Government. There is only
one way in which my firm can be secured against
possible loss, and that is by impounding the two next
installments of this annuity. I therefore venture most humbly to
request Your Highness to issue the necessary authorization for the Eye,
and our Treasury to instruct the Paymaster's Office to accept

(01:31:50):
a veto from me in the usual form upon the
installment of the pension now do, and upon that due
next quarter, in so far as this may be necessary
to cover our claim. It was asking a good deal
to expect the powerful Austrian Chancellor to concern himself with
securing a payment of fifteen thousand francs to the House
of Rothchild. But Solomon was in a position to take

(01:32:11):
this liberty, since Medinich himself was again negotiating a personal
loan with the firm, and in fact, on June first,
eighteen twenty seven, the Prince received a loan of half
a million gulden from the Rothschilds. The failure of the
conversion operation necessarily damped the Rothschild's ardor with regard to
any other ventures, the consequences of which could not be

(01:32:31):
clearly foreseen. The situation in Spain was exceedingly critical, and
the lack of money was being acutely felt. In ignorance
of the way in which the conversion scheme was working out,
the Wrothchild representative at Madrid had been somewhat rash in
making promises to the Spaniards. The financial problem in Spain,
Vincent reported to Metdinich, is now in the hands of

(01:32:54):
the House of Rothchild, all of whose members are just
now in London. It seems to me that m. Renevier,
the manager of the Madrid branch, has gone rather too
far in what he has said to the Spanish government.
The House of Rothchild will not enter into business negotiations
with Spain without having made previous inquiries in England and
assured themselves of the probable attitude of bankers that, with

(01:33:16):
regard to assistance rendered to Spain for such a loan
might damage the loans made to the South American governments
which are in rebellion against that country. When James Rothschild
returned from London in the middle of September eighteen twenty five,
after spending five weeks there with his four brothers, he
was assailed by questions from all sides as to whether
Spain had any prospect of securing a loan of twenty

(01:33:38):
five millions. Nathan had advised against it because for political
reasons he did not wish the reactionary Spanish government to
be supported. Mettinich, on the other hand, would have been
pleased by the granting of a loan and desired it
to go through. So far as I have been able
to ascertain, Vincent reported to the Chancellor, the House of
Rothchild is not much inclined to have anything to do

(01:34:00):
with a financial venture in Spain. They have little confidence
in the guarantees offered by the government, and they are
afraid of damaging themselves with English firms having interests opposed
to those of Spain. Although the House of Rothchild may
pretend that their sympathies are purely monarchistic, the recognition of
the engagements entered into by the Cortes government, and the

(01:34:21):
liberation of the Spanish colonies would provide a far wider
field for enterprise and political securities, the value of which
they do not fail to appreciate. The House of Rothschild
could well be discriminating. Offers of business from governing circles
flowed in on them from all quarters. Carl Rothschild had
met Count Louis Philippe de Bombell's in connection with some

(01:34:43):
payments which he was instructed by the Austrian government to
make on the Neapolitan account for the passage of Austrian
troops through Tuscany. Although large sums were involved, the matter
was promptly settled, and the Tuscan government gave him to
understand that it would take the opportunity of demonstrating its satisfaction.
Grand Duke leopold Io, who had been ruler of Tuscany

(01:35:03):
since eighteen twenty four, was at that time considering a
scheme of great benefit to his subjects, namely to drain
the Maremma, an area of marsh land in Tuscany embracing
thousands of square miles. The Grand Duke proposed to Karl
Rothschild through Bombells that he should undertake a part of
the drainage operation on his own account, subject to a
suitable arrangement with the State of Tuscany. Such was the

(01:35:26):
esteem in which the house was then held for its
versatility and financial resources. Karl Rothschild did not feel that
he could undertake such a far reaching scheme. Would it
not be better, he replied to Bombells, if the Tuscan government,
which has conceived such benevolent plans for their subjects, would
itself supervise the carrying out of the scheme, with the
assistance of a loan to be taken up gradually as

(01:35:48):
the work progressed. Such a method of procedure seems to
me to be more advantageous than to entrust the work
to foreigners who do not know the country, and who
would be compelled at great expense first to find an
engage workmen. These discussions took place in August eighteen twenty five,
a most unfavorable time for persuading the Rothchilds, who were

(01:36:09):
uneasy at their losses, to agree to such a serious undertaking.
The scheme, nevertheless, was carried through, and the firm took
some part in financing it, although it had nothing to
do with the work itself, it proved to be an
inestimable boon to the country, although the work took very
many years to carry out and cost untold millions. The

(01:36:29):
relations of the House of Rothchild with Metternich had remained
untroubled throughout the year eighteen twenty five, and the Rothchilds
actually ventured to intercede with the Chancellor regarding the affairs
of certain members of Napoleon's family. Toward these, Metternich was
in general anything but well disposed, and was always inclined
to put the greatest difficulties in their way. Napoleon's mother,

(01:36:51):
the aged Letitia, who was then seventy five years old,
lived at Rome and dearly wished to see again her
eldest son, Joseph, the former King of Spain, who was
living in North America under the pseudonym of Count de Servilliers.
Mother and son had not seen one another for ten years.
Joseph had repeatedly attempted to get a passport, but the

(01:37:11):
Austrian and French governments would not permit him to return
to Europe. All entreaties had hitherto been in vain, and
a friend of the family, Count Villeneuve approached Solomon Rothschild,
asking him to use his influence with Metdinich because the
old lady was ill, and Joseph promised to return to
America immediately after his visit. The world had indeed passed

(01:37:32):
through great changes during the previous ten years when the
son of a despised Frankfort tradesman was asked to intercede
on behalf of the man who was once deemed all powerful. Medinich, however,
remained obdurate. Dot t o yield would not have been
in accordance with the general principies of his policy. The
House of Bonaparte was finished with, should remain finished with

(01:37:53):
and never be allowed to become dangerous to Medinich's system again.
For this reason, even the smallest favor was refed h
used to the family. Rothchild was not listened to and
had to realize the limits of his influence. Although when
interference with his policy was involved, Medianik might remain absolutely firm,
he often gave the House of Rothschild much too much

(01:38:14):
rope in matters of finance, and in such instances he
relied upon the Finance Minister and the Treasury. An accident
has revealed the details of a transaction which clearly shows
that Metternick and his assistance sometimes went too far in
their reliance on the Rothchilds, and an examination of this
incident offers an opportunity of noting the Treasury's own comments
on its mistakes and on the loss involved, which it

(01:38:36):
should be pointed out was incurred under count Stadians successor.
Since the first Austrian occupation of Naples in eighteen fifteen,
the kingdom had had to pay a war indemnity since
the end of eighteen eighteen. It had been the duty
of the Austrian ambassador at Naples, Prince Ludwig de Jablinovski,
to receive the installments as they were paid in each month,

(01:38:58):
and in connection with a bank king syndicate controlled by
the Neapolitan firm Dolphus, to arrange for their transmission to Vienna.
Everything went well at the start, but the bill for
the second installment was protested in Vienna because the firm
of Dolphus was in difficulties. Dolphus reported this fact to
Jablinovsky in January eighteen nineteen, but the ambassador had already

(01:39:20):
received the orders on the Neapolitan treasury for the following
installments up to March, and drawn these sums in advance.
Jablinovsky was now in danger of losing this money, and
was forced to accept a very unfavorable settlement offered by
the firm of Dolphus, under which they handed him public
securities for the sum they held at eighty seven the
price at which they had bought them, Although these securities

(01:39:42):
had by then fallen to seventy eight Djablinovsky hoped that
they would appreciate again so that he would avoid any loss.
The power, Jablinovsky remarked later, which autocratically governs quotations throughout Europe,
so that the most careful calculations go astray the autocratic
The power of the House of Rothschild was a factor
of which I was not then aware. Jablinovski had miscalculated.

(01:40:07):
The bonds continued to fall, and the prince was unable
to make the payments to Vienna on the due dates
because he felt he could not sell the bonds at
such a loss. He therefore mortgaged them at sixty percent
in order to be able to send at any rate
part of the money, and still hoped that they would
appreciate later on. However, the remittances to Vienna ceased altogether.

(01:40:29):
This greatly annoyed and worried Stadian, who needed the money
as an imperial ambassador who was under Metinich's orders, was effected.
Stadium complained to the Chancellor, and Medinich had to try
to think of a way out again. He had recourse
to the brother's Rothschild, a constant refuge in distress. It
was in the summer of eighteen nineteen and James and

(01:40:51):
Karl had just come to Vienna from Naples. They had
informed themselves as to conditions there, reported to Prince Medinich,
and been commissioned by him took undertake the transmission of
Austria's outstanding claims in Naples. Rothschild stated that he would
be delighted to carry the matter through in collaboration with
Gaunt it at the most favorable possible rates, and asked

(01:41:12):
for one half percent commission and one half percent brokerage.
You may be assured his offer concluded that we shall
do everything in our power to carry out your commands
with all the diligence and economy of which we are capable,
so that we shall continue to justify the confidence which
you place in Us, the matter was accordingly entrusted to them.
Prince Jablinovski had not yet been told anything about the

(01:41:34):
negotiations with Rothschild, and he was exceedingly upset when he
was suddenly instructed to hand the business over. He expressed
his astonishment, especially in view of the fact that he
had meanwhile arranged a solution of the matter with the
Finance Minister Medici by direct shipments of gold to Trieste.
But he wrote her, James Rothschild was in Naples and

(01:41:55):
presumably heard of my unfortunate dealings with the firm of Dolphus,
and determined to turn them to his own advantage. Nothing
else can explain how the house of Rothschild should have
taken over such an unimportant business in a center with
which they are not familiar, where the rate of exchange
is constantly varying in unfavorable or how they could have
persuaded the Eye and our treasury to renounce the advantages

(01:42:17):
of transporting gold and to bear the considerable loss of exchange.
In any case, the matter was taken out of Jablonovsky's hands,
and his suggestion that further payments should be deferred until
the Neapolitan bonds rose again was ignored. In January eighteen twenty,
Jablinovsky received instructions to hand over all documents regarding the

(01:42:37):
matter to a controller specially sent to Naples for this purpose.
In July eighteen twenty the revolution broke out, and in
the spring of eighteen twenty one the Austrian troops entered Naples.
The immediate effect of these events upon the bonds was unfavorable,
and they fell continuously until May eighteen twenty one. The

(01:42:57):
result was that Stadion, who was always liable to sudden panics,
hastily gave instructions that the bonds, which had been mortgaged
at sixty percent, should be sold to Rothschild, and this
was done in May eighteen twenty one at the lowest
point which they touched, namely fifty eight and one eighth.
The following year saw an extraordinary rise in Neapolitan securities,

(01:43:18):
so that it may be readily imagined that the House
of Rothschild made an enormous profit out of this purchase.
This became particularly apparent when in August eighteen twenty seven,
the new finance minister, Count Natasty, after going through these accounts,
declared that Prince Jablinovski was liable to make good an
amount of five hundred eighty four thousand, three hundred fifty

(01:43:38):
four point five four florins, and created a charge over
his property at Ragatsno for this amount. The Prince protested strongly,
with the result that an Imperial commission was appointed to
investigate the matter. This investigation led to some lamentable revelations
as far as Austrian public finances were concerned. The most
obedient loyal servant, Count Vaughan Toff, President of the Treasury,

(01:44:01):
had some utterly devastating statements to make. In his most
submissive report regarding the Treasury's claims on the Prince, he
revealed that the transaction had been most improfitable in every way,
and declared that Prince Djablanovski's statement that it would have
been better for him and for the Treasury to have
burned the certificates of the mortgage bonds and rid himself
of them completely was correct, harsh though it sounded, for

(01:44:24):
as the bonds had been mortgaged for sixty and had
later been transferred to Rothschild at fifty eight and one eighth,
the Austrian state had not merely failed to receive anything further,
but it actually had to make up the difference. Djablinovski's
proposal to hold the bonds and wait until they improved
in value before realizing them had been a sound business speculation.

(01:44:46):
Instead of this, they had been handed over to the
House of Rothschild, together with the interest payments for the
first half of the year eighteen twenty eight. On this memorandum,
an Imperial instruction was issued ordering the Finance Minister to
examine the accounts again in collaboration with Prince Jablinovski, and
if the results showed that any added compensation had to
be paid, to take the necessary steps to collect the

(01:45:08):
amount as speedily as possible. The Fiennins Minister carried out
these instructions, and the report on the matter concluded with
the following words. The Assessor appointed for the investigation is
of the opinion that, although there is in a general
way an obligation on the Prince to make good the amount,
the claim could be effectively resisted in the courts or otherwise,

(01:45:28):
for we are not at all likely to succeed in
replying to an order to show cause such as will
necessarily be granted if the charge created on the prince's
property is not canceled. The result of the further examination
was that, instead of being held liable for the amount
of more than half a million florins, the Prince was
finally required to pay only ten thousand, six hundred and

(01:45:49):
ninety four florins thirty four kronan, in order that the
complete failure of the treasury might be somewhat concealed from
the outside world. The facts which had thus been brought
to light also gave the Chancellor food for thought, and
he afterwards observed a certain amount of caution in his
relations with the House of Rothschild. They availed themselves of
every occasion to make the Sovereign and the leading statesmen

(01:46:11):
forget such untoward occurrences, and endeavored to obliterate the bad
impression by giving proof of their deepest devotion. This was
especially the case when Emperor Francis fell ill in the
spring of eighteen twenty six, recovering only after many weeks
of sickness. The whole of Europe had been in suspense,
for the decease of the Emperor would have involved profound

(01:46:31):
political changes, and the news of his recovery offered an
opportunity for the brother's rothschild to send their congratulations to Metternich.
It is true that they little guessed how cleverly he
had provided for the continuance of his control of affairs
even in the event of Emperor Francis's death. It will
suffice to quote the letter which Amskill wrote from Frankfort.

(01:46:52):
I have by today's post received the news of the
fortunate recovery of his majesty, our universally beloved Emperor, having
suffered the greatest anxiety since the Emperor fell sick, it
was one of the most joyful moments of my life
when I heard the news. Heaven has heard our prayers
in preserving the greatest and most virtuous of monarchs, and
thus allowing the world to continue to enjoy a good fortune,

(01:47:14):
the greatness of which I can but marvel at without
venturing to a praise. It is impossible to describe the
radiant joy that lights up all faces. Only angels could
express in words our feelings of gratitude to Providence. I
cannot refrain from expressing to Your Highness my congratulations on
this blessed event. I would gladly make so bold as

(01:47:34):
to lay my congratulations at the feet of his Majesty himself,
our most benevolent Emperor. So sincere and overwhelming are my feelings.
May God preserve in full health this best father of
mankind until the end of his days. And may it
ever be my fortune in deepest reverence to call myself
Your Highness's most humble and most obedient servant, amschkill Meyer

(01:47:56):
Vaughan Rothschild. Now that the Emperor had re covered, the
fear that his death would deal a blow to Mednick's
regime and therefore also to the position which the brother's
Rothschild had established in the eye, and our chancellor's office
was again remote. Solomon, who through Medinik and Ghentz, was
constantly winning his way in Viennese court circles, was frequently

(01:48:17):
invited to the chancellors and also often entertained him in
his own house. One after another, families of the high aristocracy,
requiring financial assistance, procured loans from the Frankfort banker who
had settled at Vienna. In this way, he placed many
aristocrats under an obligation to himself, and whether they liked
it or not, they had to admit Solomon and his

(01:48:38):
family to their exclusive salons. Thus, both socially and in business.
Solomon climbed to dizzy heights at Vienna, and his commercial
rivals began to become painfully aware of this, especially during
the years of financial crisis of eighteen twenty five and
eighteen twenty six. The firm Fries and Company, one of
the four monopolistic state bankers which had come into prominence

(01:49:01):
during the reign of Maria Theresa, had got into difficulties
during the crisis of eighteen twenty five. David Parrish, a
son of the well known John Parish of Hamburg and
Rothschild's partner in numerous transactions, had entered the firm some
time previously and was now involved in its fall. Parish's
extravagance and reckless speculation hack caused him to be excluded

(01:49:21):
from a partnership in his father's business, and he had
set up on his own account. Being unable to meet
his liabilities, he had no other course open but to
require his most powerful patrons, such as Medinick and Ghentz,
who were at the same time his debtors, to repay
their loans. He thus forfeited their favor, though he could
not save his firm from ruin. When he saw that

(01:49:43):
the crash was inevitable. Parish put an end to his
life by jumping into the Danube, but before doing so,
he wrote two bitter letters expressing his resentment at the
fact that the House of Rothschild had elbowed him out
of many transactions. He blamed Medinich for having sacrificed him
to the cupidity of a family who had sec exceeded
better than he had in securing the Chancellor's interest. He

(01:50:04):
described the brother's Rothchild in a letter to Medinik as
heartless persons only interested in their money bags. Standing under
the special protection of Medinich, have behaved in a most
ungrateful manner to him. Just before his death, Parrish also
wrote to Solomon Rothchild, reproaching him for having squeezed him out,
although he had in eighteen seventeen introduced him to the

(01:50:25):
big French in Austrian financial business. Now it has been
ascertained that the Rothchilds would have succeeded in establishing this
connection even without Perish, and that he invited them to
join in several transactions simply because he was not sufficiently
rich and powerful to carry through these great state financial
operations alone. On the other hand, there is no doubt
that the brothers Rothchild were entirely ruthless in competing with

(01:50:48):
the firm of fries and Perish, and that they succeeded
as no one else did, in consolidating their position with
the public departments. In any case, Solomon neither desired nor
expected that the rivalry sat should have such a tragic ending,
and he was not a little shocked by it. He
spent many hours discussing the tragedy with Metterinek and Ghentz
in its various aspects. Two rivals had been disposed of,

(01:51:12):
but life went on its course, and it appeared desirable
to wipe out their memory and to anticipate evil tongues
by cleverly giving publicity to news regarding the fame, the
business dealings and the prestige of the House of Rothschild.
The brothers had long recognized that good advertisement, which owing
to the limitations of the time, had to be of
a literary nature, could be of the greatest value. Through

(01:51:35):
their influence with the authorities who were able to use
the power of the censorship in order more or less
to restrain press activities in all countries. They had little
to fear from violent attacks in the press, and if
any such occurred, they were almost always able to take
effective countermeasures. Moreover, they had ample means at their disposal
for influencing cowardly papers and pressing the cleverest pens into

(01:51:57):
their service. First and foremost there was Ghens, the Secretary
of Europe. He had for a long time been writing
propaganda articles for the Rothschilds in various papers and exerting
his influence, backed as it was, by the powerful figure
of Metonic looming behind him, upon the contemporary press in
their favour. Gens's growing intimacy with the House of rothschild,

(01:52:19):
which was marked by constant invitations to dinners and theaters,
as well as by highly welcome financial transactions with the
excellent rothchild as faithfully recorded by Ghentz, gave a chance
for carrying out a master stroke of publicity. In eighteen
twenty six, the brock House publishing firm was just about
to publish a new edition of its Conversational Encyclopedia, which

(01:52:40):
had a very wide circulation at that time and was
regarded as an absolute gospel. The Rothchilds had not yet
been featured in it, and it seemed to offer a
convenient opportunity for describing the origin and progress of their house.
There was nobody better qualified to execute this, as regarded
both manner and matter, than Ghens Solomon. Rothschild accordingly requested him,

(01:53:03):
in return for a princely fee, to undertake the task,
explaining to him the points he wished to have emphasized.
He was particularly anxious that the relationship with the Elector
of Hesse should be described in such a way as
to convey the impression that the whole of his enormous
fortune had been entrusted to the management of the House
of Rothchild, and that they had succeeded in saving it
by risking all their possessions. Special emphasis was to be

(01:53:27):
laid upon their integrity and disinterestedness, and the firm was
to be described as more powerful than any contemporary firm.
All the titles and dignities that the five brothers had
acquired in the course of time being enumerated. During the
first week of April eighteen twenty six, Gense wrote an
essay entitled Biographical Notes about the House of Rothchild, which

(01:53:47):
was to serve as the basis of his article in
the Encyclopedia The following extracts will give an idea of
the way in which Ghense carried out his task. The
essay was accepted at its face value by very large
number of people, and after appearing in the Brockhouse publication,
was incorporated into similar foreign works, as for instance, Encyclopedic
de Gens Dumont. The article ran the Wrothchilds at the

(01:54:12):
present time, the greatest of all business firms are among
those who have achieved greatness and prosperity simply through intelligently
taking advantage of opportunities which were available for thousands of others,
through a spirit of enterprise seasoned by calm judgment, and
through their understanding of men and affairs, and their capacity
to adjust themselves to the conditions of the time. Meyer

(01:54:33):
Amskill Rothschild, the father of the five brothers who are
now living, was the founder of this firm in a
short space of time. His knowledge, his tireless industry, and
his straight dealing won for him the confidence of highly
respected firms. He was given important orders, and his credit
as well as his wealth increased the relationship which Rothschild

(01:54:54):
established with the Landgrave Afterwards. Elector of Hesse was a
decisive factor in the enormous subst development of his business.
The Elector appointed him Crown Agent in eighteen o one,
having come to realize that he was as reliable as
he was useful. When in eighteen o six the French
occupied the Elector's territories and he himself was compelled to flee,

(01:55:16):
he left the rescue of his private possessions to Rothschild,
their value amounting to many million gulden. It was only
by sacrificing the whole of his own property and at
considerable personal risk, that Rothschild contrived to save the property
that had been entrusted to him. The well known fact
that all Rothschild's possessions had been confiscated by the French

(01:55:36):
led the exiled Elector to believe that his own property
had been lost too. In fact, he does not appear
to have thought it even worth while to make inquiries
about it. When matters had settled down again, Rothschild immediately
proceeded to do business with the property he had saved.
The brothers are most scrupulous in observing the injunction that
their father laid upon them when he was dying, which

(01:55:57):
was to collaborate in absolute brotherly hearty in ale business matters. Indeed,
they treat the memory of their father with such piety
that they refer to him in all important business matters,
and Nathan generally applies to doubtful cases, a rule his
father recommended. When the Elector returned to his states in
eighteen thirteen, the House of Rothschild not merely offered immediately

(01:56:19):
to return to him the capital sums with which it
had been entrusted. It also undertook to pay the customary
rate of interest from the day when it had received them.
The Elector, positively astonished by such an example of honesty
and fair dealing, left the whole of his capital for
several more years with the firm, and refused any interest
payments for the earlier period, only accepting a small interest

(01:56:40):
from the time of his return. Through recommending the House
of Rothschild, especially at the Congress of Vienna, the Electors
certainly assisted greatly in extending their connections until now. As
the result of the political development since eighteen thirteen, the
House has, through an uninterrupted series of great transactions, attained
the position it at present holds in the commercial and

(01:57:00):
financial affairs of Europe, which are partly directed by it.
Students of economics and politics have, no doubt frequently wondered
how the House of Rothschild has been able to achieve
so much in so short a time. Leaving the effects
of chance out of account. Its success is attributable principally
to the strictest observance of certain fundamental maxims, together with

(01:57:21):
wise business management and the exploitation of favorable opportunities. The
principal maxim is harmonious collaboration in all business matters, to
which reference has already been made. After their father's death,
every offer, whatsoever its origin might be, was made the
subject of joint discussion between the brothers. Any transaction of

(01:57:41):
any importance. That all was carried through according to a
concerted plan by their joint endeavors, and all the brothers
had an equal share in the result. They continued to
act in close agreement, in spite of the fact that
they gradually settled in places far removed from one another.
This circumstance, indeed, instead of interfering with their collaboration, has

(01:58:01):
proved an actual advantage. It has enabled them to obtain
the fullest information as to the state of affairs in
the principal markets, so that each of them can, from
his own center the more effectively take the preliminary steps
in any business. The firm as a whole then takes
it over and carries it through. Another of the principles
which the Rothchilds have adopted is to keep moving and

(01:58:22):
not allow themselves to become enmeshed by circumstances. Finally, it
should be noted that, apart from the reasonableness of their demands,
the punctiliousness with which they carry out their duties, the
simplicity and clarity of their schemes, and the intelligent way
in which they are put into operation, the personal moral
character of each of the five brothers has been a
determining factor in the success of their undertakings. It is

(01:58:45):
not difficult for those whose power enables them to attach
large numbers to their interests to secure the backing of
a powerful party, but to unite the support of all parties, and,
in the popular phrase, to win The esteem of gentle
and simple implies the possession not merely of material resources,
but also of spiritual qualities, not always found in association

(01:59:06):
with wealth and power. Ever ready to lend a helping
hand without distinction of person to those who have come
to them for assistance. All of the five brothers have
achieved a real popularity. They have rendered the most important
services in such a manner as to make the most acceptable.
For they have been actuated not by considerations of policy,
but by natural benevolence and kindness. This Eulogy of the

(01:59:29):
Rothschilds was a masterpiece executed by a clever stylist. It
was bound to raise the prestige of the house enormously,
especially in the opinion of those who did not know
how it came to be written. Then, as now, the
great mass of the unthinking public accepted anything in print
at its face value, and as the article, while containing
statements that were untrue, did contain much that was the

(01:59:50):
result of accurate observation and attributed excellencies that were not fictitious.
Even the more critical were inclined to give credence to
the description. It was not signed by against, although it
is true he admitted to being the author at any
rate in conversation with his friends. Indeed, he actually asked
Adam Muller to express his opinion on it. I should

(02:00:11):
be glad, he wrote, if you would read the article
on Rothschild in the supplement of the Conversational Encyclopedia. It
is my work, and I have endeavored to give briefly
as simple and I hope not in felicitous explanation of
the greatness of that house. I shall greatly appreciate your
opinion on this little article. Gens was proud of his work, and,

(02:00:31):
as he has noted in his diary, he read it
to Rothschild's manager, Wertheimstein, who naturally listened to it with
undisguised admiration. Ten days later Gens called on Rothschild and
received his actual cash reward. Apart from the great advantage
which its publication brought to the brother's Rothschild. His essay
contained some shrewd observations which are of general interest. One

(02:00:55):
passage in particular, although not included in the Conversational Encyclopedia,
may be worth quoting. There is a truth gainst remarks, which,
although not quite new, is generally not properly understood. The
word luck, is commonly used in the history of famous
individuals or eminent families, is bereft of all meaning when
we endeavor to dissociate it entirely from the personal and

(02:01:17):
individual factors. In each case, there are circumstances and events
in life in which good or ill luck may be
a determining, although not an exclusive factor in human destiny.
Lasting success, however, and constant failure are always, and to
a much greater degree than is generally supposed, attributable to
the personal deserts or the personal failings and shortcomings of

(02:01:39):
those who are blessed by the one or damned by
the other. Nevertheless, the most outstanding personal qualities may sometimes
require exceptional circumstances and world shattering events to come to fruition.
Thus have the founders of dynasties established their thrones, and
thus has the house of Rothschild become great? The circumstances
could not have been more aptly described. For the family

(02:02:02):
Rothschild of that generation did undoubtedly bring mental forces into
play in a definite direction, the results which they achieved
being favored by the circumstances of the time.

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RISE OF ROTHSCHILD - 5. Rothschild Business Throughout the World: The Rise of a Financial Superpower - Count Egon Caesar Corti

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