32

The Rise of the House of Rothschild

pality, negotiated by Meyer Amschel. In 1804 Rothschild requested the Prince of Thurn and Taxis to bestow a similar favor upon one of his sons, in view of the fact that he himself bore the title of imperial crown agent.

It was characteristic that when asking the emperor for a title he should mention the services rendered to the House of Taxis, and that when he applied for a favor to that house he should have based his claim on the fact that his services had been recognized by the emperor. Such promotions were necessarily of service to him, too, in his relations with his old patron the Landgrave of Hesse, who in spite of everything was still inclined to be suspicious.

William of Hesse was in every way a most important person to Meyer Amschel, for he was colossally rich, richer than the emperor himself, and a much more important point in those days than now-he was close at hand. Moreover, he had family ties with England, where Nathan was living, and with chronically penurious Denmark, by lending money to which the firm of Rüppell and Harnier, as well as that of Bethmann, had made great profits.

Meyer Amschel advised the landgrave to participate in this loan by buying stock. He did purchase a small amount, Rothschild being commissioned to carry through the transaction. This was done to the landgrave's satisfaction; but Meyer Amschel required a considerable sum of ready money in order to take advantage of a favorable opportunity for purchasing goods and bills of exchange. Knowing that the landgrave, whose investments in England as well as in Germany brought in very good returns, had spare cash available, he asked, and obtained from him on two occasions-in November, 1801, and July, 1802-160,000 thalers and 200,000 gulden as a guaranteed loan, the securities being Danish and Frankfort debentures.

Although the security offered was exceptionally good,

William of Hesse was persuaded to lend the money only after pressure had been brought to bear, and on the special recommendation of his principal financial administrator Buderus. The transaction certainly marked a distinct advance in Rothschild's confidential relations with the landgrave.

The second amount was wanted, not merely for Meyer Amschel himself, but also to assist his two eldest sons, who were already beginning to acquire the titles of court appointments wherever they could. As early as 1801 they were appointed official agents for making war payments on behalf of the State of Hesse.

Meyer Amschel had been enviously observing Rüppell and Harnier's financial transactions with Denmark. It was his ambition to do similar business with Denmark, with landgraviate moneys, on his own account, independently of any other firm. He still lacked any large capital sum, such as others had available, but he was accurately informed by Buderus of the large amount of ready money in the possession of the ruler of Hesse, which was seeking investment. He was determined to put his competitors out of the field by offering the prince better terms.

The Frankfort firms were accustomed to wait until orders came to them, but he meant to get in and negotiate personally. He had put through the secured loans at Cassel personally; and he decided to go there again in order to secure the cooperation of William's counselors with Buderus at their head, so that they might make the landgrave disinclined to negotiate direct with Denmark.

An important point was that Denmark was not to know where the money came from, because William did not wish to be regarded as wealthy in his family circle, as he was afraid that some of them might ask for special favors. For this reason it was decided that a go-between who had relations with Buderus, and through him with Rothschild too, and who lived in Hamburg, which was conveniently near to Denmark, and far enough away from

Hesse to allay suspicion, should be the first person to make approaches to that country. This was a Jewish banker called Lawaetz.

Moreover, on Rothschild's own suggestion, and contrary to the usual practice, the loan was to run over a long period. Notice for repayment was not to be given for ten years or more, and after that period payment could be demanded only in quite small instalments, over a period of twenty or thirty years. They did actually succeed in securing William of Hesse's consent to granting such a loan; and no sooner were the conditions agreed than Lawaetz showed his hand to the extent of making the interest payable to Meyer Amschel Rothschild at Frankfort.

"The lender," the Hamburg banker wrote to Denmark, "is an exceedingly rich capitalist, and exceptionally friendly to the Danish Court. It is possible that even greater sums and better conditions may be obtainable from him." It is true that Lawaetz did not know Rothschild personally at this time.

The successful conclusion in September, 1803, of this, the first loan which he had carried through privately, not only brought Meyer Amschel financial profit, but also resulted in his obtaining the title of crown agent to the Court of Hesse. His rivals had been highly displeased to hear of this loan, and kept making representations of a nature calculated to damage Rothschild, to the landgrave. Rüppell and Harnier were particularly assiduous. They drew attention to the fact that the last Danish loan had been issued in the form of debentures, in the name of Rothschild; and in order to rouse Danish national vanity they stressed the idea that this suggested that "it was not the national credit of Denmark but merely the Jewish name of Rothschild that had got these obligations accepted in Hesse." 2

Rothschild's fight with his rivals involved the officials entrusted with the financial administration of the land

graviate in the struggle. Buderus became increasingly a partizan of Rothschild, whereas Lennep of the War Office took the side of Rüppell and Harnier. Rothschild and Buderus, however, had the upper hand for the time being, and by 1806 no less than seven landgraviate loans were issued. The profit realized from this transaction served to key up still further the hatred and enmity of the rival firms and of Lennep, and led to awkward developments.

Rothschild had shown the greatest energy in these undertakings. He did not even spare himself the journey to Hamburg, an exceedingly difficult one at that time, in order to get into personal touch with the banker, Lawaetz, and to see that the Danish business was carried on as energetically as possible.

3

A letter from the Hamburg banker to Buderus contains the following statement: "The Crown Agent Rothschild is coming to see me tomorrow in order to settle up our remaining accounts, and he intends to return the day after. It has been a pleasure to me to make the acquaintance of this man, and I shall be glad to be able to do him any service in future."

The intrigues of the rivals, however, did not wholly fail of their effect upon William of Hesse. His attitude continued to be suspicious, and he several times refused to have anything to do with other business propositions suggested by Rothschild, agreeing to them only as the result of much pleading and persuasion. Besides the Danish loans, loans were issued for Hesse-Darmstadt and the Order of St. John, these also being subscribed by landgraviate funds through the intermediary of Rothschild. The sums involved were already considerable, running into hundreds of thousands.

The larger they were, the better pleased was Meyer Amschel, because his percentage profit rose in proportion, while the risk was borne, not by him but by the landgrave, whose favorite occupation had always been

the careful administration and development of his property. The sums invested in England called for particular attention. Since the Peace of Basel, relations between Hesse and England had been rather strained, although they were not likely to become critical, as the landgrave had cleverly succeeded in enlisting the interests of responsible people on his side. He had lent the Prince of Wales, afterwards King George IV, about £200,000 in two instalments. The dukes of York and Clarence were guarantors of this loan, but they also borrowed money from the landgrave. In addition to this, William of Hesse had put out £640,000 at interest in London in various ways, a fact which was to prove exceedingly useful to him.

The example of their patron was a lesson to the House of Rothschild, and they soon learned to copy his wise practice of lending money by preference to persons in the highest position. Even though William of Hesse remained neutral in the second War of the Coalition, he secretly wished success to the enemies of France for he eagerly hoped for the resumption of his profitable subsidy contracts with England.

The Peace of Lunéville, which extended France's boundaries to the Rhine, also conferred on William the dignity of elector, which he had so much desired, and which was duly proclaimed in 1803; but the meteoric rise of Bonaparte and revolutionary France's position in the world seemed to him to be unnatural and menacing. His friendship with Prussia was rather shattered, because that state had succeeded in annexing considerable territory, but had left the Hessian prince in the cold.

The peace between France and England did not last long. As early as May, 1803, the Island Kingdom again declared war upon the usurper in Paris. It was not long before William of Hesse was forced to take an attitude toward the new world situation. In October, 1803, the French, having invaded English Hanover, tried to get