Rothschild family


The Rothschild family is a wealthy Ashkenazi Jewish noble banking family originally from Frankfurt, Germany. The family's documented history starts in 16th-century Frankfurt; its name is derived from the family house, Rothschild, built by Isaak Elchanan Bacharach in Frankfurt in 1567. The family rose to prominence with Mayer Amschel Rothschild, a court factor to the German Landgraves of Hesse-Kassel in the Free City of Frankfurt, Holy Roman Empire, who established his banking business in the 1760s. Unlike most previous court factors, Rothschild managed to bequeath his wealth and established an international banking family through his five sons, who established businesses in Paris, Frankfurt, London, Vienna, and Naples. The family was elevated to noble rank in the Holy Roman Empire and the United Kingdom. The only subsisting branches of the family are the French and British ones.
During the 19th century, the Rothschild family possessed the largest private fortune in the world, as well as in modern world history. The Rothschild family dominated international finance in Europe between the 1820s and the 1870s, when their hegemony over European finance was broken by joint stock banks. The family's wealth declined over the 20th century and was divided among many descendants. Today, their assets cover a diverse range of sectors, including financial services, real estate, mining, energy, agriculture, and winemaking. The family additionally has philanthropic endeavours and nonprofits. Many examples of the family's rural architecture exist across northwestern Europe. The Rothschild family has frequently been the subject of antisemitic conspiracy theories.

Overview

The first member of the family who was known to use the name "Rothschild" was Isaak Elchanan Rothschild, born in 1577. The name is derived from the German zum rothen Schild, meaning "at the red shield", in reference to the house where the family lived for many generations. A red shield can still be seen at the centre of the Rothschild coat of arms. The family's ascent to international prominence began in 1744, with the birth of Mayer Amschel Rothschild in Frankfurt am Main, Germany. He was the son of Amschel Moses Rothschild, a money changer who had traded with the Prince of Hesse. Born in the "Judengasse", the ghetto of Frankfurt, Mayer developed a finance house and spread his empire by installing each of his five sons in the five main European financial centres to conduct business. The Rothschild coat of arms contains a clenched fist with five arrows symbolising the five dynasties established by the five sons of Mayer Rothschild, in a reference to Psalm 127, "Like arrows in the hands of a warrior, so are the children of one's youth". The family motto appears below the shield: Concordia, Integritas, Industria.
Paul Johnson writes "he Rothschilds are elusive. There is no book about them that is both revealing and accurate. Libraries of nonsense have been written about them... A woman who planned to write a book entitled Lies about the Rothschilds abandoned it, saying: 'It was relatively easy to spot the lies, but it proved impossible to find out the truth.'" Johnson writes that, unlike the court factors of earlier centuries, who had financed and managed European noble houses, but often lost their wealth through violence or expropriation, the new kind of international bank created by the Rothschilds was impervious to local attacks. Their assets were held in financial instruments, circulating through the world as stocks, bonds and debts. Changes made by the Rothschilds allowed them to insulate their property from local violence: "Henceforth their real wealth was beyond the reach of the mob, almost beyond the reach of greedy monarchs." Johnson argued that their fortune was generated to the greatest extent by Nathan Mayer Rothschild in London; however, more recent research by Niall Ferguson indicates that greater and equal profits also were realised by the other Rothschild dynasties, including James Mayer de Rothschild in Paris, Carl Mayer von Rothschild in Naples and Amschel Mayer Rothschild in Frankfurt.
Another essential part of Mayer Rothschild's strategy for success was to keep control of their banks in family hands, allowing them to maintain full secrecy about the size of their fortunes. In about 1906, the Jewish Encyclopedia noted: "The practice initiated by the Rothschilds of having several brothers of a firm establish branches in the different financial centres was followed by other Jewish financiers, like the Bischoffsheims, Pereires, Seligmans, Lazards and others, and these financiers by their integrity and financial skill obtained credit not alone with their Jewish confrères, but with the banking fraternity in general. By this means, Jewish financiers obtained an increasing share of international finance during the middle and last quarter of the 19th century. The head of the whole group was the Rothschild family..." It also says: "Of more recent years, non-Jewish financiers have learned the same cosmopolitan method, and, on the whole, the control is now rather less than more in Jewish hands than formerly." Mayer Rothschild successfully kept the fortune in the family with carefully arranged marriages, often between first- or second-cousins. By the late 19th century, however, almost all Rothschilds had started to marry outside the family, usually into the aristocracy or other financial dynasties. His sons were:
The German family name "Rothschild" is pronounced in German, unlike in English. The surname "Rothschild" is rare in Germany.
Families by country:
The five sons of Mayer Amschel Rothschild were elevated to the Austrian nobility by Emperor Francis I of Austria, and they were all granted the Austrian hereditary title of Freiherr on 29 September 1822. The British branch of the family was elevated by Queen Victoria, who granted the hereditary title of baronet and later the hereditary peerage title of Baron Rothschild.

Napoleonic Wars

The Rothschilds already possessed a significant fortune before the start of the Napoleonic Wars, and the family had gained preeminence in the bullion trade by this time. From London in 1813 to 1815, Nathan Mayer Rothschild was instrumental in financing the British war effort, organising the shipment and transfer of bullion and funds from Britain to the Duke of Wellington's armies across Europe, as well as arranging the payment of British financial subsidies to their continental allies. In 1815 alone, the Rothschilds provided £9.8 million in subsidy loans to Britain's continental allies.
The brothers helped coordinate Rothschild activities across the continent, and the family developed a network of agents, shippers and couriers to transport gold across war-torn Europe. The family network was also to provide Nathan Rothschild time and again with political and financial information ahead of his peers, giving him an advantage in the markets and rendering the house of Rothschild still more invaluable to the British government. In one instance, the family network enabled Nathan to receive in London the news of Wellington's victory at the Battle of Waterloo a full day ahead of the government's official messengers. Rothschild's first concern on this occasion was not to the potential financial advantage on the market which the knowledge would have given him; he and his courier immediately took the news to the government. That he used the news for financial advantage was a fiction then repeated in later popular accounts, such as that of Morton.
The basis for the Rothschilds' most famously profitable move was made after the news of British victory had been made public. Nathan Rothschild calculated that the future reduction in government borrowing brought about by the peace would create a bounce in British government bonds after a two-year stabilisation, which would finalise the post-war restructuring of the domestic economy. In what has been described as one of the most audacious moves in financial history, Nathan immediately bought up the government bond market, for what at the time seemed an excessively high price, before waiting two years, then selling the bonds on the crest of a short bounce in the market in 1817 for a 40% profit. Given the sheer power of leverage the Rothschild family had at their disposal, this profit was an enormous sum.
Nathan Mayer Rothschild started his business in Manchester in 1806 and gradually moved it to London, where in 1809 he acquired the location at 2 New Court in St. Swithin's Lane, City of London, where it operates today; he established N M Rothschild & Sons in 1811. In 1818, he arranged a £5 million loan to the Prussian government, and the issuing of bonds for government loans formed a mainstay of his bank's business. He gained a position of such power in the City of London that by 1825–26 he was able to supply enough coin to the Bank of England to enable it to avert a market liquidity crisis.

International high finance

Rothschild family banking businesses pioneered international high finance during the industrialisation of Europe and were instrumental in supporting railway systems across the world and in complex government financing for projects such as the Suez Canal. From 1895 through 1907 they loaned nearly $450,000,000 to European governments. During the 19th century, the family bought up a large proportion of the property in Mayfair, London.
The Rothschild family was directly involved in the independence of Brazil from Portugal in the early 19th century. Upon an agreement, the Brazilian government should pay a compensation of two million pounds sterling to the Kingdom of Portugal to accept Brazil's independence. N M Rothschild & Sons was pre-eminent in raising this capital for the government of the newly formed Empire of Brazil on the London market. In 1825, Nathan Rothschild raised £2,000,000, and indeed was probably discreetly involved in the earlier tranche of this loan which raised £1,000,000 in 1824. Part of the price of Portuguese recognition of Brazilian independence, secured in 1825, was that Brazil should take over repayment of the principal and interest on a £1,500,000 loan made to the Portuguese government in 1823 by N M Rothschild & Sons. A correspondence from Samuel Phillips & Co. in 1824 suggests the close involvement of the Rothschilds in the occasion. Major 19th-century businesses founded with Rothschild family capital include:
The family funded Cecil Rhodes in the creation of the African colony of Rhodesia. From the late 1880s onwards, the family took over control of the Rio Tinto mining company. The Japanese government approached the London and Paris families for funding during the Russo-Japanese War. The London consortium's issue of Japanese war bonds would total £11.5 million.
The name of Rothschild became synonymous with extravagance and great wealth; and the family was renowned for its art collecting, for its palaces, as well as for its philanthropy. By the end of the century, the family owned, or had built, at the lowest estimates, 41 palaces, of a scale and luxury perhaps unparalleled even by the richest royal families. The British Chancellor of the Exchequer David Lloyd George claimed, in 1909, that Nathan, Lord Rothschild was the most powerful man in Britain. Niles' Weekly Register, Volume 49 had the following to say about the Rothschilds' influence on international high finance in 1836: