subsidiary agreement with Nathan, accurately defining his relation to the company.

Each partner of adult age was authorized to sign on behalf of the firm. The deed recited that "with the help of the Almighty, Meyer Amschel Rothschild has, through the industry which he has shown from his youth upwards, through his commercial capacity (i. e., business instinct) and through a tireless activity continued to an advanced age, alone laid the foundations of the present flourishing state of the business, and thereby provided for the worldly happiness of his children." It was therefore laid down that the decision in all transactions should remain with him, as being the head of the business. Moreover, he expressly retained for himself alone the right to withdraw money from the capital of the business as he might think fit, whereas the other partners could take out only their annual profits and what was necessary for their households.

It was also laid down that no daughters or childrenin-law should have any right to see the company's books. Finally there were provisions against "vexatious litigation," and any partner who set the law in motion was made liable to a penalty for doing so. Before he could appear before the judge he was required to deposit this amount. This article was cleverly designed to lessen the possibilities of disputes between the five brothers; and although they might perhaps have rendered it invalid at law, they fully appreciated its wisdom, and all five solemnly agreed to abide by it.

The deed of partnership gives some insight into the varied nature of the business of the House of Rothschild, and the vicissitudes to which it was liable. As "bad and unrealizable" mortgages, debentures, and outstanding debts of all kinds are mentioned, it is clear that in its numerous undertakings the House of Rothschild sometimes suffered losses and made mistakes. These certainly always brought indirect advantages, as Meyer Amschel

continually emphasized to his sons that mistakes have an educational value, and one must never lose courage. Meyer Amschel was careful to nurse the old connections which the elector had facilitated for him through his relations in high quarters, and to exploit them for the benefit of his house. Whereas previously he had acted as the middleman between the electoral lender and Denmark, he offered as early as December, 1810,52 a loan of 400,000 thalers to Count Schimmelmann, the Danish finance minister, which loan was to be advanced, not by the elector, but by Meyer Amschel Rothschild and his sons. It was another step towards his gradual financial emancipation from the elector, although, having now arrived at the point of doing business on his own account, he continued to apply in his own interests the business principles so well proved by William of Hesse.

Rothschild carefully watched the general political situation. Though by reason of his personality and origin, and his ignorance of language, he could not possess those qualities which are normally required in a diplomat, he had a sagacious understanding of human nature, entirely free of any preconceived ideas or prejudices. This was of particular advantage in a world which, at the time, was politically topsy-turvy. One really had to be a consummate diplomatist in order to carry on one's business without causing offense, either to the French or to the powers which they were oppressing.

As long as Napoleon's star was in the ascendant, the Rothschilds acted as if they were well disposed to France and her ruler; they lent money both to the French and to the native authorities, delivered flour to friend and foe alike, and hoped to be left entirely unmolested by Napoleon. They felt, as we know today, more secure than they really were. They were running great risks, for instance, in their commerce, or rather illicit trade, in merchandise with England.

It was not till some time after the proclamation of the

continental blockade that Napoleon realized that it inflicted hardship not only upon England but upon France, as France thereby lost her best customer, and the cost of living in that country rose much higher. He accordingly issued various decrees modifying the strict provisions of the continental blockade, so as to permit of a kind of official smuggling under departmental supervision, and also to allow the import of colonial goods on the payment of a very heavy duty approximating fifty per cent of their value. In spite of these alleviations, smuggling was carried on on a large scale, and its direction was naturally concentrated in the commercial city of Frankfort. Napoleon had sent his own spies there, and on receiving their reports he decided to take more active measures against Frankfort.

Buderus had just decided to give to the young crown agent, Carl Rothschild, who was about to attempt to bring to Prague the property which the elector had left in Schleswig, the final account for the year 1807, which the elector required. The official stated 5 that he was not inclined to venture on the journey himself, because he was too closely watched, and feared a further arrest, and the possible confiscation of all his property.

His letter also contained news that would be welcome

to his avaricious master. "After long arguments, and as the result of great efforts," he stated, "I have persuaded the crown agent, Rothschild, in effecting the third investment of £150,000 sterling, to charge one-quarter per cent less commission, so that he will deliver the stock for 7334, involving a saving of £4,521. .. The younger son of Crown Agent Rothschild will bring over the document relating to the first purchase of stock, as soon as means can be found for sending it safely."

But this could not be carried out so easily; Napoleon's anger because Frankfort did not respect his blockade regulations against England led to more stringent regulations, and Buderus was forced to change his plans com

pletely. "The crown agent, Kallmann Rothschild," he wrote on November 2, 1810,54 "should proceed to Prague at once, as several French regiments with artillery have come into the town, as well as a host of customs officials. All the gates have been occupied, and nobody is allowed to pass out without being closely inspected; all warehouses have been sealed, and an extensive search for English and colonial goods has been instituted, severe penalties being inflicted when such goods have been discovered. "The extent of the general confusion and distress which this has caused beggars descriptions. I myself have taken every conceivable precaution, and I feel justified in stating my absolute conviction that the sons of Crown Agent Rothschild deserve the highest praise for the tireless industry and zeal which they have shown in their devotion to your Electoral Highness. Fresh proclamations have been issued, promising a reward of fifteen per cent for information regarding the investment of your Electoral Highness's funds, and the number of spies and traitors under every guise is so great that it is impossible now to trust anyone. From this mild account of conditions here you may graciously be pleased to infer that it would be as impracticable for me to leave as it was formerly to transport the effects in custody at Gottorp. I shall arrange for Crown Agent Kallmann Rothschild to start as soon as it is possible to get a package out of Frankfort."

On instructions from Paris, a general domiciliary search for concealed English-manufactured goods had been ordered at Frankfort. The city which had just been described in such glowing colors by Hügel was now in a panic. Naturally the business House of Rothschild was also affected by this measure. A list was drawn up of two hundred and thirty-four tradesmen who had to pay the heavy duties prescribed for the colonial wares which were discovered.

Meyer Amschel Rothschild was the sixty-eighth name

in this list, and was made liable for a payment of 19,348 francs, which was certainly not a very large amount compared with the sums payable by other tradesmen. Hebenstreit, for instance, paid nearly a million francs, and Bethmann 363,000 francs. Altogether the French collected a total of nine and a quarter millions on the colonial stores discovered at Frankfort. Half the amount payable by Rothschild was for indigo. In view of Meyer Amschel's relations with the grand ducal government and his cleverness at concealment, we may assume that his actual stores of colonial goods were much greater, and that through his connections he substantially reduced the amount which he ought to have paid. Nevertheless this sudden incursion, personally ordered by Napoleon, had distinctly alarmed him.

Meanwhile the elector at Prague had received Buderus's letters, and sent the following reply to his trusty, official:58 "It is a special satisfaction to me that you have induced the firm of Rothschild, in view of the prospect of the further investment of £150,000, to reduce their commission by one-quarter per cent.

"In view of further representations made by the crown. agent Rothschild, and having regard to the favorable price, I have decided to increase this investment by a further £100,000 . . . but on the understanding that I shall pay this amount in instalments, and that I am not to be worried about it in any way. At the same time you are to see that the document regarding the first investment reaches me as soon as possible, and that I receive the others shortly afterwards. I note with pleasure that the House of Rothschild has shown its traditional devotion to me even in the present catastrophe at Frankfort. You will kindly convey to them my satisfaction and gratitude."

Meanwhile the Emperor of France had just experienced one of the happiest hours of his life. On March 20, 1811, Marie Louise had presented him with the son