disastrous state of affairs. If it were to continue for a longer period of years, it would involve the downfall of the monarchy.

Stadion stated that another loan to cover this deficit was urgently required, and suggested recourse again to the House of Rothschild, whose wealth had increased prodigiously of recent years. Moritz von Bethmann, who was staying in Vienna in February, 1822, expressed the following opinion regarding the House of Rothschild: 126

"I can understand that the Rothschilds prove exceedingly useful instruments to governments, and am far from wishing to cast aspersions on them or from envying them their good fortune. Solomon especially is a man of the most estimable character, and I am exceedingly fond of him. I have heard from a reliable source that Solomon Rothschild has stated that the annual balance sheet of the five brothers showed a net profit of six million gulden in 20-florin measure. This is certainly a case where the English proverb applies: 'Money makes money.'

"Observing their industry and judgment, we may expect their business to continue to flourish; indeed one hopes so, since the overthrow of this Colossus would be terrible. The harmony between the brothers contributes largely to their success. None of them ever thinks of finding fault with another. None of them adversely criticizes any of the others' business dealings, even when the results do not come up to expectations. Solomon has won people's affections here, partly through his general modesty and partly through his readiness to be obliging. Nobody leaves him without feeling comforted."

Stadion's gloomy report regarding the condition of the public finances induced the emperor to give his agreement to a loan being obtained from the House of Rothschild. Rothschild was approached in March, 1822, an amount of 28 to 30 million gulden being mentioned. The treasury official, Baron von Pillersdorff, wrote a consid

ered report on the offer sent in by the firm.127 Rothschild proposed that 30 million gulden should be issued at 70%, so that the loan certificates to be issued would represent a nominal capital sum of 42,957,000 gulden. As interest was allowed to be deducted, even before the money was paid, a capital amount of 42,875,000 florins would have to be issued in respect of cash received, amounting to 28,785,717 florins.

"If we compare the real underwriting figure (allowing for the deduction of interest) of 67%," Pillersdorff's report continued, "with the ruling price which averages 75%, we find there is a difference of eight points, or 10% in favor of the underwriters, which would mean a profit to them of 3,428,000 gulden. It further appears from the above statement of the case, that the interest payable on the suggested loan would amount to 72% per

annum.

"The view to be taken of these conditions," the report concluded, "follows naturally from a consideration of the figures detailed above. In my opinion they are exceedingly onerous and less favorable than any previous proposals, having regard to the fact that the first loan, concluded when Austrian credit was in its infancy, was a daring experiment. They are unacceptable in view of all the reactions that would result.

"Taking all these considerations into account, the proposals put forward do not seem to me such as should be accepted, even as a basis for further negotiation. It would certainly be a severe blow to the country's credit if it became known that, in the circumstances indicated above, a loan had been concluded at the price of 67%, especially when one bears in mind that the treasury would have to meet the reproach of having confined itself to a single offer."

The House of Rothschild was accordingly informed that the treasury was prepared to carry through a financing operation with them and Parish, if this could be ar

ranged on favorable terms, but that the proposals made could not be regarded as such. Moreover, the treasury wished to take up only a small amount. The Rothschilds, who wanted to get the business at all costs, replied in the following terms: 128

"We hasten hereby to inform your Excellency that we have just heard from our houses in London and Paris, that several firms in those cities have informed them of their desire to invest capital in Austrian funds, and thereby to participate in a loan arranged for his Majesty's service. In view of our friendly relations with those firms, we should be exceedingly glad to meet their wishes as far as we can. So we venture to inform your Excellency, in connection with the offer (we have now made) for underwriting twelve million gulden of five per cent loan, that we are prepared in any event to offer one and a half per cent more for the amount decided upon than is offered by any other firm."

The Rothschilds sent in a second letter on the same day, in which, together with Parish, they endeavored to get the large loan. They tried again to induce the finance minister immediately to issue the loan on a larger scale, as they stated,129 "principally in order that the credulous and uninstructed public should have no occasion to believe that a similar operation would be repeated at an early date." The letter concluded: "In the full conviction, that none, not even the smallest circumstance of any significance escapes the profound insight and business acumen of your Excellency, we are confining ourselves briefly to indicating the above consideration and are content to leave the appreciation of it entirely to your Excellency's wisdom and judgment."

When the Austrian Treasury did not accept this offer, Solomon Rothschild felt personally aggrieved. He took his troubles to Gentz, who had just received a gratuity of three thousand ducats from the court of Naples, through Carl Rothschild's interventions. Gentz reports 130 how

Solomon described, with many tears, how inconsiderately he had been treated in more than one quarter, in connection with his new loan proposals.

This failure was soon compensated for by other important transactions. Nathan had just concluded a loan of three and one-half million pounds with Prussia, and the repercussions of this transaction were felt as far as Frankfort and Vienna. Concurrently there were a large number of small loans arranged in Germany and Austria, with the higher nobility, who were short of money in both countries.

The loan, amounting to nine hundred thousand gulden, which Prince Metternich himself obtained from the House of Rothschild on September 23, is of particular interest. It was a perfectly straightforward business; the loan bore five per cent interest, and was to be repaid by 1834; in fact the prince repaid it in full in 1827. There was nothing in the least suggestive of bribery about the transaction-Metternich was no Gentz-but it was bound to make the chancellor, who thus became Solomon's debtor, feel not entirely free in his dealings with him. At all events it had the result that Metternich was more inclined to be sympathetic to the personal wishes and requests of Solomon Rothschild and his brother.

The chancellor had known for some time that the brothers Rothschild were not content with the simple "von" that they had acquired in the year 1817, and that they had their eye on the title of baron. Upon Gentz one day sounding Metternich as to whether a request in that direction was likely to meet with success, the chancellor gave him to understand that he would raise no objection. The brothers accordingly put forward this request, mentioning their services to Austria. And it was granted; by an imperial decree, dated September 29, 1822, all the brothers and their legitimate descendants of either sex were raised to the rank of baron.

Thus most of the objections raised by the College of

Heralds, the court officials, and Baron von Lederer, were automatically discounted. The Rothschilds obtained the seven-pointed coronet which, as a rather broad hint, they had drawn on the coat-of-arms submitted in 1817. The lion on the coat was also granted, and instead of the four arrows which the hand had grasped since they had been admitted into the ranks of the minor nobility, there were now five, symbolizing the five brothers. They were also granted supporters, a lion and a unicorn, and three splendid helmets adorned the coronet. The motto, "Concordia, integritas, industria," was intended to express the harmony between the brothers, as well as their honesty and tireless industry.

In view of the enormous value attaching to any title of nobility in those times, the promotion to the rank of baron signified for the Jewish House, which only twenty years ago had been almost entirely unknown outside its native town, an almost immeasurable increase of prestige. The private life of the brothers also changed from this time. They occupied luxurious dwellings in Frankfort, Paris, and London. Only the aged Gudula stuck faithfully to the family house in the Jewish quarter until her death in 1849 at the age of ninety-six.

Their efforts firmly to establish their social position also met with success, especially as the stories of the family's wealth had invested its members with a kind of legendary halo. They consciously encouraged this belief in their wealth and their power, for they fully realized that it increased the credit of their House. Astonishing though the achievements of the five brothers had been since their father's death, they showed no sign yet of flagging in their efforts. They were driven by the constant urge to accumulate ever-growing riches, and to increase their power and prestige.