CHAPTER IV

The Brothers Rothschild During the Period of Congresses, 1818-1822

TH

HE great fortune of the Rothschilds had been made; it was now a question not only of preserving it but of developing it and of employing it as remuneratively as possible. The convulsions through which all the states of Europe had passed, and the enormous military efforts made during the preceding quarter of a century, had produced general confusion in their finances, which could be straightened out only by hard work in peace conditions.

Every state had been spending money lavishly for a long time, and the resulting shortage of money was very acute. The poverty-struck states had to acquire the cash necessary for their recovery from those who had succeeded in profiting by war conditions to accumulate riches as contractors or through financial operations. Foremost among these was the House of Rothschild, and it gladly lent money to princes and states, as the repayment of such loans through their subjects was secured. Thus it advanced moneys to numerous small princely families, especially to those of the neighborhood, while its relations with the Elector of Hesse remained outwardly unchanged.

Although he was the third son, Nathan incontestably took the leadership among the five brothers. His long and fortunate connection with the English government had taught him both the advantage of concentrating on really big financial operations, and the comparative safety of carrying through such operations with powerful states. For the concern of these for their public credit and their prestige made them regard it as essential to carry out

their obligations punctually. Nathan was not in the least inclined to rest upon his laurels, or to limit himself to the preservation and enjoyment of the family's great fortune. His aim was to increase the power of his House; and he held the view that in order to win a victory, ducats, like soldiers, had to be concentrated in mass suddenly and unexpectedly upon a wisely selected point.1 This was the dominant note in the policy of his House during the following period.

In order to apply this policy it was necessary, now that his firm enjoyed the high regard of the business community, that he should secure his position in society as well. The Austrian patent of nobility had given him a good start in this direction; but his native city and the senate of Frankfort continued to adopt an unfriendly attitude toward the Jews, including the Rothschild family. Amschel at Frankfort, who had been placed in charge of the campaign against the senate, used every opportunity for exerting external pressure upon the authorities of the city, especially through Prussia and Austria. At the beginning of the year 1818 a favorable opportunity occurred for again enlisting the support of the Prussian Chancellor Prince Hardenberg, who was well disposed toward the Jews.

The state finances of Prussia were, like those of Austria, in great confusion. The deficit was large, and it seemed not improbable that the pay of civil servants and of the army would have to be suspended. The treasury lived from hand to mouth, and the king himself was being dunned by small tradesmen. In these circumstances, Barandon, the London representative of the Prussian Mercantile Marine, had recommended that a loan should be raised in England, and that for this purpose recourse should be had to Nathan Rothschild. Hardenberg readily agreed, and asked Amschel at Frankfort, whom he knew personally, to use his influence in favor of securing this loan. Amschel consented, and used this oppor

tunity of again appealing to the chancellor on behalf of the members of his faith at Frankfort.

2

"At the present time," he wrote, "when his Excellency the Minister and Envoy to the Diet, Count von Buol, is with your Excellency, I beg to renew my most humble representations regarding the fate of the members of my faith here, who are awaiting in great suspense the decision of the diet. We place our greatest hopes in the honored Prussian government, and cherish the most sincere wish that the principles recognized by it will be applied, convinced that your Highness knows too well how to appreciate the cultural progress made by our community during the last forty years to allow the way to their further development and improvement to be barred, or them to be limited in this respect."

Hardenberg was quite willing to accede to this request, since in doing so he would be acting in accordance with his own personal convictions. He had, however, a difficult task with his king, who was not well disposed to the Jews. The monarch told him the measures he could apply if action were taken by the magistracy of Frankfort, but at the same time expressed the desire that the wishes of the magistracy should be met as far as possible. "In any case," the resolution concluded, "I do not wish Prussia to support the Jews in the diet."

On this Hardenberg angrily commented: "First ad acta. We have at any rate the decisions of the Congress of Vienna to go upon.' 994

However, the king came off his high horse, for Hardenberg had made him realize that the Prussian state would need the brothers Rothschild for a loan, and that it would not be good policy for Prussia to alienate them by an attitude unfriendly to the Jews in the Diet of Frankfort. The majority of the diet were in any case in sympathy with the desires of the senate at Frankfort, and the rights which the Jews had acquired in 1811 seemed therefore to be in peril. Only the powerful influence of Metter

nich and Hardenberg had so far restrained it from taking a definite decision hostile to the Jews.

Amschel regarded the head of the House of Bethmann, which was being more and more overshadowed by the Rothschilds, as a natural enemy of the Jews; but Bethmann refused to admit that this was so. "If Herr James," he wrote at the time to David Parish, "will but visit me at Frankfort, he will soon realize that I am not influenced by any nonsense about Christians and that I have no prejudice against a reputable Jew. I have often attempted in vain to disabuse Amschel of the stupid illusion that I am opposed to the demands of the Jewish community at Frankfort in so far as they are reasonable. The fact that I am suspected by my fellow Christians of taking the Jewish side should convince him, if nothing else will, that he has no ground for his attitude." 5

Amschel Meyer certainly was greatly interested in keeping on good terms with Prussia and Austria. Prussia's acute financial distress seemed to provide a further excellent opportunity of earning a large amount of money, and he did all he could, in close collaboration with his brother Nathan in London, to induce Prussia to come to the Rothschilds for refuge.

That kingdom had very good reason to look around for money, for in 1817 the state was carrying a burden of twenty millions of floating debt, interest being charged on part of this amount at the extravagant rate of twenty percent per annum, the payments being met by further borrowings each year. Apart from this, the annual budget showed a deficit of several million thalers. Prince Hardenberg, by the king's command, accordingly instructed the Director of the Prussian Treasury to negotiate a loan. The director, Christian von Rother, was a highly competent official and Hardenberg's right-hand man in financial matters, and he had come into special prominence in raising money during the wars of liberation.

"It is essential," wrote the prince to Rother," "that we should obtain money for various purposes. The maintenance of the state urgently calls for it. I am eagerly waiting to hear from you. Act with decision and courage."

Rother first tried Berlin firms, but they attempted to exploit the difficulties of the situation, and, as he reported to the king, the conditions which they proposed were "exorbitant and humiliating." In Holland he had no success either; but he fared better at Frankfort. As Prussian commissioner of finance he had already come into contact with the House of Rothschild in Paris, and he now succeeded in getting on exceedingly good terms with Amschel Meyer.

Amschel referred him to his brother Nathan in London, as the most likely person to make the loan a success. Hitherto, Barandon had conducted the negotiations in England, but he was not liked by the House of Rothschild. Rother, on the other hand, the brothers had known in Paris, and they regarded him as a more pleasant person to deal with. Indeed they preferred him in every way, and were exceedingly gratified when he came to London and Barandon was left out in the cold.

They were now dealing only with two friends of their House, Rother and the Prussian ambassador in London, William von Humboldt, the brother of the great explorer Alexander. He himself was not only a diplomat, but also a distinguished scholar and philosopher. Humboldt understood little of money matters, and he left his private estate to be managed by Rothschild, whereas Rother was regarded as a financial genius in his own country. Humboldt was certainly a complete believer in Nathan Rothschild's indisputably superior talent for finance. He reported in this sense to Berlin, using words which are especially remarkable coming from such a man.

"If the loan is to succeed here," his report ran, "this can be managed in my opinion only through Rothschild.