CHAPTER V

The Rothschild Business Throughout the World

HROUGH his vigorous intervention, Metternich

That restored pea viger his fashion in the

had restored peace after his fashion in the Apennine Peninsula. The chancellor, however, was constantly apprehensive for the future of 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 1820.

In this country, which had wrung a constitution from the king, the opposing forces of the Right and Left were still in conflict. During the summer of 1820 the radical members of the Cortes treated the king practically as a prisoner, and on June 22 of that year Ferdinand VII wrote to the King of France requesting him to send forces to his assistance, and also endeavored to induce the other 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 Villèle, although one party, that to which Chateaubriand belonged, was very much in favor of it. The matter had come to be one that concerned the whole of Europe, and Metternich had grown accustomed to intervene decisively in any important European crisis. 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 20, 1822, another such congress met, this time at Verona. Metternich and Gentz accompanied the emperor to Verona as they had to Laibach, 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 on this occasion too. In the case of the congress at Laibach, 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, or that the Rothschilds 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 Rothschilds that Metternich 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 régime. Solomon therefore two days after his arrival at Verona hastened to write a letter to the chancellor refuting these rumors:1

"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 a loan with the Spanish government. Your Highness is far too familiar with the sentiments of myself and 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 High

ness may rest assured that we have never concluded any loan with the Spanish government, that we shall not conclude any such loan, and that 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 did not immediately communicate to the other brothers, and which these learned of only after the fait accompli; but on this occasion there had actually been no agreement concluded with Spain. After handing his letter to Metternich, Solomon called on Gentz. Alexander von Humboldt had just left him. Humboldt was attached to the King of Prussia's suite, and he had been discussing problems of high philosophy with the "Pen of Europe." In order to assure himself of Gentz's support during the congress, Rothschild held out to him the prospect of further profitable transactions, and Gentz noted with satisfaction in his diary that Rothschild had discussed with him "matters which although not so high were far more pleasant." 2

During the whole period of the congress Solomon and Gentz had been inseparable, and both had derived the greatest advantage from their association. Gentz introduced Solomon to the representatives of Russia, and the delegates of the tsar's dominions soon concluded a loan of £6,000,000. Apart from the business profit realized on this transaction, Solomon contrived to increase his personal prestige.

3

"Rothschild and his Paris brother had the Order of Vladimir conferred on them yesterday," Gentz wrote 3 to Pilat, the editor of the Oesterreichischer Beobachter, 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 man

ner in the near future. "I do not feel that this can conveniently be done in the Beobachter; its proper place would 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 Rothschild. You might give this matter your thought. In any case please see that it is mentioned as soon as possible in the Allgemeine Zeitung. 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 emperor has conferred the Order of Vladimir upon the barons Solomon and James von Rothschild.' Do not say St. Vladimir and do not refer to the class, which neither I nor the Rothschilds know."

Sometime later Gentz 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 Rothschilds. 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 Beobachter, and I do not see why this should not be done. At all events the news should be mentioned by you in the Allgemeine Zeitung 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 tsars was also having financial dealings with the House of Rothschild appreciably assisted in raising its credit with the general public.

Meanwhile Solomon had inaugurated a private service of couriers between Verona and Paris and Vienna, and the Rothschilds proceeded 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 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 Ouvrard, who was also staying at Verona, had concluded a loan with the 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 French bonds resulted. The capital of France reechoed with reproaches against ministers who had constantly averred that they were determined to avoid war with Spain. 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 Rothschild.

On November 18, Villèle wrote to his representative at Verona to say: "The Rothschilds' 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 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