gain, which in turn would serve to increase its power. At this critical time the most important services were rendered to the Frankfort firm, not by its new chief, but by his incomparably more talented brother Nathan, in England, whose flair for finance amounted to positive genius. He now enjoyed the elector's full confidence. When in 1812 the Prince Regent of England seemed to be inclined to repay £100,000, Nathan was instructed to receive this amount, and to invest it in consols. This transaction brought him into immediate touch with the private finances of the royal family.

As Great Britain was the financier of the powers which were fighting on the Continent, and was also maintaining armies of her own abroad, enormous demands were made on the British Treasury in 1813. The officials were not equal to the task of raising the money or of sending it to the Continent. It had already been necessary for a naturalized foreigner to demonstrate that there were other ways of raising and sending money than for Englishmen abroad to draw bills on England. That method had a very bad effect on the English rate of exchange, which at the end of 1813 had already fallen by one-third.

Herries, who was charged with the sole responsibility for sending money to the Continent, again called in Nathan Rothschild to his assistance. While his principal problem was to supply the enormous sums that England had to provide under the subsidy contracts that she had just concluded, it was even more urgent and more important for the final overthrow of Napoleon to afford every possible support to Wellington, who was still pressing for money, but who was now free to advance into French territory, as Napoleon had transferred his best troops and generals to Germany.

Herries invited Nathan, whose name was still almost always wrongly spelled by the British Treasury, to a conference regarding the measures to be taken. The English official was completely convinced by the clarity and logic

of the scheme for sending money which Nathan submitted, and requested him to draw up a memorandum for the chancellor of the exchequer, explaining the methods to be adopted for rendering prompt financial assistance to the Duke of Wellington. The technical problem was now somewhat different, since Wellington attached most importance to being supplied with French currency.

In the interests of England, as well as of his own pocket, Nathan had hitherto worked almost consistently against Napoleon; but he had done it as inconspicuously as possible for fear of compromising his brothers on the Continent. Even now that Napoleon was retreating, and was soon to be fighting within the former frontiers of France itself, he still kept well in the background, although he adopted the anti-Napoleonic cause with all the more enthusiasm, since the Russian disaster and the defeat at Leipzig seemed to imply the end of Napoleon's power. Lord Liverpool, first lord of the treasury and prime minister, and Vansittart, chancellor of the exchequer, approved the scheme submitted by Herries, and in a secret letter entrusted its execution to Nathan's experience and discretion.

Nathan Rothschild thereupon proceeded personally to Holland and collected, in close cooperation with his brothers, the French metal currency with which the Continent was flooded, but which, owing to the blockade, was naturally unobtainable in England.19 James also acquired French cash on the spot in Paris, and managed to smuggle it across to his brothers in Holland. The sums thus collected were then shipped from the Dutch coast to Wellington's headquarters, this transaction becoming easier as his troops advanced from the west coast of France. In this way, a constant stream of gold and silver in current French coin flowed to the British army, which was thus enabled to pay in French money, whilst the allies, advancing from the east, were deprived of any such cash resources.

In the interests of the brothers Rothschild the secret was exceedingly well kept; Herries had every reason to be satisfied with his, and his country's relations with the foreign Jew, and did not grudge him the enormous profits which he was making. In later years Nathan himself stated that this was the best business he had ever done.20

Meanwhile the victorious allies had advanced beyond Frankfort, and had established their general headquarters in that city. The Emperor Alexander of Russia, the King of Prussia, and the Emperor Francis met in the ancient city where the Holy Roman Emperors were crowned. Metternich came with them, rejoicing in the triumph of his policy. The outward signs of the great change in the political situation were therefore particularly apparent at Frankfort, the home of the Rothschilds.

It is not surprising that the family regulated their future conduct accordingly. As yet they had had no relations with Austrian statesmen, but the brothers Rothschild now proceeded to sound members of the imperial entourage with a view to getting an opening. Accompanying Metternich was a previous acquaintance of theirs, Barbier, vice-president of the Austrian Treasury, who was responsible for the financial arrangements of the Austrian army. It was with him that the unsuccessful negotiations regarding the electoral loan had been carried on. Amschel accordingly called on him, and attempted although at first with little success to secure his interest and that of his powerful master Count von Metternich.

The name of Metternich was now on everybody's lips. The success of his policy had enormously strengthened the minister's position. It was a fair assumption that in the future he would exercise a very decisive influence in all matters affecting Austria, even in financial matters, although they did not come strictly within his province. In spite of his other outstanding qualities, Metternich had not a sound economic sense, either in public matters or in his private affairs. He spent money rather thought

lessly and extravagantly on his private account, and his natural inclination was to make finance secondary to foreign policy, rather than the reverse.21

The Emperor Francis had repeatedly come to the rescue of his minister with personal loans, and had waived their repayment later.22 Metternich had also frequently had recourse to various bankers, including such Frankfort bankers as Bethmann and the brothers Mühlen. As far as can be ascertained, he had had neither official nor personal relations with the Rothschild family before the year 1813.

Metternich was conscious of his own uncertainty in financial matters, and therefore relied largely on the advice of his indispensable secretary and counselor, the brilliant publicist Frederick von Gentz. This man had got to know the count intimately during the years 18021803, while he was still in the Prussian civil service and Metternich, who recognized his distinguished literary talent, was ambassador at Dresden; and it was Metternich who induced him to transfer to the Austrian civil service. Gentz was even worse than Metternich at managing his private affairs, and unlike the count, was completely unscrupulous in getting money from anybody he could, from his own or from foreign states, from persons who desired orders or titles, and wherever opportunity offered. In spite of this, and of the fact that he often managed to earn considerable sums of money with his pen, he was in a constant state of financial embarrassment owing to his extravagant manner of life, and was repeatedly on the verge of complete ruin. This, however, did not prevent him from being always on the most intimate terms with all the great men of his day, with poets and statesmen, with princes and the higher nobility, as well as with Jewish bankers and merchants.

Humboldt knew him well, and Goethe was interested in him too. Humboldt wrote to Goethe on one occasion: 23 "You have perhaps heard that a few weeks ago

poor Gentz went completely bankrupt. It is weakness, and not extravagance that has brought him to this pass.' Later events were to give the lie to this statement of Humboldt's; it would scarcely have been possible for anyone to dissipate money more thoughtlessly and extravagantly than Gentz.

In spite of these personal characteristics, Gentz had a bent for political economy, and had taken a very good course in that subject in England, where he stayed for some time. While studying in that country he had made the personal acquaintance of Herries, who translated several of his writings into English, and maintained a correspondence with him. He also told him of the firm of Rothschild. Gentz did not stay with Metternich at general headquarters, but he corresponded with him constantly on financial matters.

The Austrian state was again urgently in need of funds for continuing hostilities, as it had been decided to carry the war into the enemy's country across the Rhine. The immediate problem was to convert into cash the remaining instalments of the subsidies from England. This had been done hitherto by the four Viennese banking firms, but the government was not very satisfied with their services, and Gentz, for personal reasons apparently, was not on good terms with them. He therefore wrote to Metternich to say that as far as he was aware, the four Viennese firms had no exclusive right to conduct the financial affairs of the state, and recommended the Frankfort banker von Herz. But he too proved to be very disappointing; he succeeded in making several hundred thousand for himself, but got rid of the bills at absurdly low rates, thereby also damaging English credit. The problem as to who should carry through these transactions still remained to be solved.

A letter from Count Ugarte to Metternich indicated how much they were exercised as to the best means of getting the English money over.24 Ugarte observed that