_Sketch of the Life of Rothschild.—Comes to England.—Introduction
of Foreign Loans.—Large Purchases.—Anecdotes concerning
Rothschild.—His Difficulties and Annoyances.—His Death and
Burial.—Last Crisis on the Stock Exchange._
The eminent abilities of Nathan Meyer Rothschild were inherited
from his father, who, educated for the synagogue, distinguished
himself as a financier, and, though engaged in the uncongenial sphere
of a counting-house, became a learned archæologist. Frankfort,
Berlin, Vienna, London, Naples, and Paris, have alike witnessed the
prescience of the money-making Rothschilds; and it is reported that
the first great success of Meyer Anselm, the father of the house,
originated in the possession of the fortune of the Landgrave of Hesse
Cassel, which he saved from the grasp of Napoleon, and which must
have been to a commercial man of the utmost importance.[7]
By his own report, Nathan Meyer Rothschild came to Manchester because
Frankfort was too small for the operations of the brothers, although
the immediate cause was some offence to a customer; and it is
characteristic of the intrepidity of the man, that, with scarcely any
hesitation, and with an absolute ignorance of the English language,
he came to the country in which he realized such great results. On
Tuesday he told his father he would go to England, and on Thursday
he started. With £20,000 he commenced his career; and in a short
time his capital was trebled. At Manchester he soon saw there were
three profits to be made,—in the raw material, the dyeing, and the
manufacturing. It need hardly be added, that his great mind had
stomach for them all, and that, having secured the three, he sold
goods cheaper than any one else. This was the foundation of that
colossal fortune which afterwards passed into a proverb; and, in
1800, finding Manchester too small for the mind which could grapple
with three profits, Rothschild came to London. It was the period when
such a man was sure to make progress, as, clear and comprehensive in
his commercial views, he was also rapid and decisive in working out
the ideas which presented themselves. Business was plentiful; the
entire Continent formed our customers; and Rothschild reaped a rich
reward.
From bargain to bargain, from profit to profit, the Hebrew financier
went on, and prospered. Gifted with a fine perception, he never
hesitated in action. Having bought some bills of the Duke of
Wellington at a discount, to the payment of which the faith of the
state was pledged, his next operation was to buy the gold which was
necessary to pay them, and when he had purchased it, was, as he
expected, informed that “government required it.” Government had it,
but doubtless paid for the accommodation. “It was the best business
I ever did!” he exclaimed triumphantly; and he added, that, when the
government had got it, it was of no service to them until he had
undertaken to convey it to Portugal.
In 1812, Meyer Anselm, the head of the house, died at Frankfort. A
princely inheritance, unbounded credit, and solemn advice never to
separate, were left to his four sons. From this period, Nathan Meyer
Rothschild was regarded as the head, though not the elder of the
family; and skilfully did he support and spread the credit of the
name. Previous to the advent of Mr. Rothschild, foreign loans were
somewhat unpopular in England, as the interest was receivable abroad,
subject to the rate of exchange liable to foreign caprice, and
payable in foreign coin. He introduced the payment of the dividends
in England, and fixed it in sterling money, one great cause of the
success of these loans in 1825.
Although Mr. Rothschild was commonly termed a merchant, his most
important transactions were in connection with the Stock Exchange. It
was here that his great decision, his skilful combinations, and his
unequalled energy, made him remarkable. At a time when the funds were
constantly varying, the temptation was too great for a capitalist
like Mr. Rothschild to withstand. His operations were soon noticed;
and when the money-market was left without an acknowledged head
by the deaths of Sir Francis Baring and Abraham Goldsmid,—for the
affairs of the latter were wound up, and the successors of the former
did not aim at the autocracy of the money-market,—the name of Nathan
Meyer Rothschild was in the mouths of all city men as a prodigy of
success. Cautiously, however, did the capitalist proceed, until he
had made a fortune as great as his future reputation. He revived all
the arts of an older period. He employed brokers to depress or raise
the market for his benefit, and is said in one day to have purchased
to the extent of four millions.
The name of Rothschild as contractor for an English loan made its
first public appearance in 1819. But the twelve millions for which
he then became responsible went to a discount; it was said, however,
that Mr. Rothschild had relieved himself from all liability before
the calamity could reach him. From this year his transactions
pervaded the entire globe. The Old and the New World alike bore
witness to his skill; and with the profits on a single loan he
purchased an estate which cost £150,000. Minor capitalists, like
parasitical plants, clung to him, and were always ready to advance
their money in speculations at his bidding. Nothing seemed too
gigantic for his grasp; nothing too minute for his notice. His mind
was as capable of contracting a loan for millions, as of calculating
the lowest possible amount on which a clerk could exist. Like too
many great merchants, whose profits were counted by thousands, he
paid his assistants the smallest amount for which he could procure
them. He became the high-priest of the temple of Janus; and the
coupons raised by the capitalist for a despotic state were more than
a match for the cannon of the revolutionist.[8] From most of the
speculations of 1824 and 1825, Mr. Rothschild kept wisely aloof. The
Alliance Life and Fire Assurance Company, which owes its origin to
this period, was however, produced under his auspices; and its great
success is a proof of his forethought. None of the loans with which
he was connected were ever repudiated; and when the crash of that
sad period came, the great Hebrew looked coolly and calmly on, and
congratulated himself on his caution. At his counting-house a fair
price might be procured for any amount of stock which, at a critical
time, would have depressed the public market; and it was no uncommon
circumstance for brokers to apply at the office of Mr. Rothschild,
instead of going in the Stock Exchange.
He was, however, occasionally surpassed in cunning, and, on one
occasion, a great banker lent Rothschild a million and a half on
the security of consols, the price of which was then eighty-four.
The terms on which the money was lent were simple. If the price
reached seventy-four, the banker might claim the stock at seventy;
but Rothschild felt satisfied that, with so large a sum out of the
market, the bargain was tolerably safe. The banker, however, as much
a Jew as Rothschild, had a plan of his own. He immediately began
selling the consols received from the latter, together with a similar
amount in his own possession. The funds dropped; the Stock Exchange
grew alarmed; other circumstances tended to depress it; the fatal
price of seventy-four was reached; and the Christian banker had the
satisfaction of outwitting the Hebrew loan-monger.
But, if sometimes outwitted himself, there is little doubt he made
others pay for it; and, on one occasion, it is reported that his
finesse proved too great for the authorities of the Bank of England.
Mr. Rothschild was in want of bullion, and went to the governor to
procure on loan a portion of the superfluous store. His wishes were
met, the terms were agreed on, the period was named for its return,
and the affair finished for the time. The gold was used by the
financier, his end was answered, and the day arrived on which he was
to return the borrowed metal. Punctual to the time appointed, Mr.
Rothschild entered; and those who remember his personal appearance
may imagine the cunning twinkle of his small, quick eye, as, ushered
into the presence of the governor, he handed the borrowed amount in
bank-notes. He was reminded of his agreement, and the necessity for
bullion was urged. His reply was worthy a commercial Talleyrand.
“Very well, gentlemen. Give me the notes! I dare say your cashier
will honor them with gold from your vaults, and then I can return
you bullion.” To such a speech the only worthy reply was a scornful
silence.
One cause of his success was the secrecy with which he shrouded all
his transactions, and the tortuous policy with which he misled those
the most who watched him the keenest. If he possessed news calculated
to make the funds rise, he would commission the broker who acted
on his behalf to sell half a million. The shoal of men who usually
follow the movements of others, sold with him. The news soon passed
through Capel Court that Rothschild was bearing the market, and the
funds fell. Men looked doubtingly at one another, a general panic
spread, bad news was looked for, and these united agencies sunk the
price two or three per cent. This was the result expected; and other
brokers, not usually employed by him, bought all they could at the
reduced rate. By the time this was accomplished, the good news had
arrived, the pressure ceased, the funds arose instantly, and Mr.
Rothschild reaped his reward.[9]
But it was not an unvaried sunshine with this gentleman. There were
periods when his gigantic capital seemed likely to be scattered to
the four quarters of the globe. He lost half a million in one English
operation; when the French entered Spain in 1823, he was also in the
utmost jeopardy; but, perhaps, the most perilous position in which he
was placed was with the Polignac loan, although his vast intelligence
again saved him, and placed the burden on the shoulders of others.
With this, however, he suffered greatly, as the price fell thirty per
cent.
He had, also, other sources of apprehension. Threats of murder were
not unfrequent. On one occasion, he was waited on by a stranger,
who informed him that a plot had been formed to take his life; that
the loans which he had made to Austria, and his connection with
governments adverse to the liberties of Europe, had marked him for
assassination; and that the mode by which he was to lose his life was
arranged. But though Rothschild smiled outwardly at this and similar
threats, they said, who knew him best, that his mind was often
troubled by these remembrances, and that they haunted him at moments
when he would willingly have forgotten them. Occasionally his fears
took a ludicrous form. Two tall, mustachioed men were once shown into
his counting-house. Mr. Rothschild bowed, the visitors bowed, and
their hands wandered first in one pocket, and then in another. To the
anxious eye of the millionnaire, they assumed the form of persons
searching for deadly weapons. No time seemed allowed for thought;
a leger, without a moment’s warning, was hurled at the intruders;
and, in a paroxysm of fear, he called for assistance, to drive out
two customers, who were only feeling in their pockets for letters
of introduction. There is no doubt that he dreaded assassination
greatly. “You must be a happy man, Mr. Rothschild,” said a gentleman
who was sharing the hospitality of his splendid home, as he glanced
at the superb appointments of the mansion. “Happy! me happy!” was the
reply. “What! happy when, just as you are going to dine, you have a
letter placed in your hands, saying, ‘If you do not send me £500,
I will blow your brains out!’ Happy! me happy!” And the fact, that
he frequently slept with loaded pistols by his side, is an indirect
evidence of a constant excitement on the subject.
The name of this gentleman, the entertainments given by him, the
charities to which he occasionally subscribed, and the amount of
his transactions in the money-markets were blazoned abroad. Peers
and princes of the blood sat at his table; clergymen and laymen
bowed before him; and they who preached loudest against mammon bent
lowest before the mammon-worshipper. Gorgeous plate, fine furniture,
an establishment such as many a noble of Norman descent would
envy, graced his entertainments. Without social refinement, with
manners which, offensive in the million, were but _brusque_ in the
millionnaire, he collected around him the fastidious members of the
most fastidious aristocracy in the world. He saw the representatives
of all the states in Europe proud of his friendship. By the
democratic envoy of the New World, by the ambassador of the imperial
Russ, was his hospitality alike accepted; while the man who warred
with slavery in all its forms and phases was himself slave to the
golden reputation of the Hebrew. The language which Mr. Rothschild
could use when his anger overbalanced his discretion, was a license
allowed to his wealth; and he who, when placed in a position which
almost compelled him to subscribe to a pressing charity, could
exclaim, “Here, write a check,—I have made one —— fool of myself!”
was courted and caressed by the clergy, was fêted and flattered by
the peer, was treated as an equal by the first minister of the crown,
and more than worshipped by those whose names stood foremost on the
roll of a commercial aristocracy. His mode of dictating letters was
characteristic of a mind entirely absorbed in money-making; and his
ravings, when he found a bill unexpectedly protested, were translated
into mercantile language ere they were fit to meet a correspondent’s
eye. It is painful to write thus depreciatingly of a man who
possessed so large a development of brain; but the golden gods of
England have many idolaters, and the voice of truth rarely penetrates
the private room of the English merchant. Mr. Rothschild’s was a
character which may be serviceably held up as a warning. There was,
however, an occasional gleam of humor in him, sternly as his thoughts
were devoted to heaping up riches. “I am as much as you,” he said
to the Duc de Montmorenci, when his title was granted; “you style
yourself the first Christian baron, and I am the first Jew baron.”
He was a mark for the satirists of the day. His huge and somewhat
slovenly appearance; the lounging attitude he assumed as he leaned
against his pillar in the Royal Exchange; his rough and rugged
speech; his foreign accent and idiom,—made caricature mark him as
its own; while even caricature lost all power over a subject which
defied its utmost skill. His person was made an object of ridicule;
but his form and features were from God: his mind and manners were
fashioned by circumstances; his acts alone are public property; and
by these we have a right to judge. No great benevolence lit up his
path; no great charity is related of him. The press, ever ready to
chronicle liberal deeds, was almost silent upon the point; and the
fine feeling which marked the path of an Abraham Goldsmid, and which
brightens the career of many of the same creed, is unrecorded by the
power which alone could give it publicity. Dr. Herschel, indeed, said
that Mr. Rothschild had placed some thousands in his hands for the
benefit of his poorer brethren; but thousands spent in a career of
thirty-five years, by one who counted his gains in millions, assume a
narrow form. The Jewish code prescribed a tithe; but Jewish laws are
often abrogated, when Jewish ceremonies are closely followed.
At last the time arrived which proves a millionnaire to be a man.
Mr. Rothschild’s affairs called him to Frankfort, and he was seized
with his last illness. The profession there could do nothing for him,
and, scarcely even as a last hope, Mr. Travers, the eminent surgeon,
made a rapid journey to see if English science could avail the dying
Crœsus. The effort was vain, and the inevitable fate was well and
worthily met. There appears even a certain degree of dignity in his
resignation to the last struggle, and something touchingly manful
in the wording of the will which was to surrender to others the
gold won by the sweat of his brain. Breathing an almost patriarchal
simplicity, it recommends his sons to undertake no great transaction
without the advice of their mother, of whom he speaks with tender and
even touching affection. “It is my special wish that my sons shall
not engage in any transaction of moment, without having previously
asked her maternal advice.”
The first intelligence of his death was received by the same method
which had so often contributed to his success. Beneath the wings
of a pigeon, shot in sport at Brighton, were discovered the words
“_il est mort_.” The intelligence created an intense sensation,
as the uninitiated were ignorant that his illness was dangerous,
and calculations were plentiful as to the amount of his fortune. A
greater tumult than had been produced since the violent death of his
predecessor, marked the precincts of the Stock Exchange, as it was
impossible to tell the tendency of his speculations, or what effect
might be produced by his unexpected demise.[10]
His remains were brought to England. The Austrian, Russian, Prussian,
Neapolitan, and Portuguese ambassadors assisted at his funeral;
and his sons, who were deeply affected, attended him to his last
resting-place. The coffin which contained his massive remains was
elaborately carved and gorgeously ornamented, looking like some
splendid piece of man’s cunning, destined for the boudoir of a lady,
rather than the damp of the grave.
His children inherit his business; but they do not inherit his
position in the stock-market. They are competitors for government
loans; but, though with the name remains a certain _prestige_ of its
former power, they do not appear willing to entertain the extensive
and complicated business in the funds in which their father delighted.
The few anecdotes recorded of the gentleman whose life has been
so imperfectly sketched, form a portion of many which have been
carefully collected. A good life of Nathan Meyer Rothschild would be,
to some future Tooke, a complete and perfect key to the financial
history of the early portion of the nineteenth century.[11]
The last crisis in the Stock Exchange which it is the writer’s
purpose to record was that memorable era, in 1836, when a
convulsion—scarcely equalled in degree, though limited in its
extent—made bears and bulls alike bankrupts.
For many years previous, the business of Capel Court had been
decreasing. The attempts made to excite public feeling were
insufficient to produce much result. Consols remained without those
great and sudden movements so beneficial to the members; little
was done in shares; and it was remarked that the Stock Exchange
had become a monetary dead sea; that the carriage seemed likely to
be exchanged for the wheelbarrow; the breaking of credit for the
breaking of stones; and that, when the eagle eye of the hungry broker
and jobber looked round for dupes, all was barren.
At length the spell was broken. The attempt of Don Pedro to seize the
crown of Portugal afforded the members an opportunity of exercising
their vocation; and it has been confidently said, that, long before
a loan was attempted, their money was employed in assisting the
above expedition. Every art was used to blacken the character of Don
Miguel. Every trick was attempted to excite sympathy for Don Pedro.
Private memoirs were published, and anecdotes related. Truths were
distorted, and falsehood not unfrequently perpetrated. Paragraphs
made their constant appearance, in which “our ancient ally” was
represented as suffering from a most intolerable tyranny. Unbearable
torture and insufferable trials were the lot of the Portuguese
people; darkness and dungeons the doom of the aristocracy. The Tagus
was red with the blood of the populace; and the “tower of Belem,”
said a writer in Fraser’s Magazine, “emitted more doubtful and
indescribable sounds than its predecessor of Babel.”
All these things tended to prepare the mind of the English
capitalist. But a further temptation was offered. The revenues of
the kingdom were portrayed in glowing colors. It was said that Don
Miguel could, but would not, pay the interest of the existing debt,
and that Don Pedro could and would. The scheme proved thoroughly
successful. The note of expectation being thus sounded, a band of men
was engaged, vessels were hired, and, with the aid of English money,
English men, and English ships, Oporto was taken. The public mind
was now ripe for a loan. The success was magnified, the achievement
enlarged on, and £800,000 were demanded on the security of some
port-wine. The money was lent; Don Miguel fled to Rome; and the young
queen was installed in his place. A further loan of two millions
followed; the interest was difficult to pay, the dividends were
capitalized, and great excitement pervaded the Stock Exchange at the
rumors which were currently circulated.
But another important movement was going on in connection with loans
to Spain. The principal powers of Europe had agreed that Spain
and Portugal should assist each other in the expulsion from their
respective territories of Don Carlos and Don Miguel, and that the
other courts should assist the belligerent parties. From this treaty
arose an auxiliary force raised in England to assist the youthful
queen of Spain, and “The British Legion” is yet named with derision.
From the courts and from the alleys of St. Giles’s, from the town
jail and from the rural workhouse, came half-clad, wretched, and
miserable beings, who preferred being shot to being starved. Efforts
to gain commissions were made by as motley a crew. Youths from the
counting-house and from the shop were assiduous in endeavouring to
attain them. Gentlemen with small incomes and no knowledge of war put
forward their pretensions; and the officers were, in their way, a
match for the men.
With all these disadvantages, the legion secured the success of the
cause for which it fought; and, after a series of battles, Don Carlos
was compelled to fly from the territory. A loan of course became
advisable; and, although the interest on the previous debt could not
be paid, it was proposed to advance an additional four millions.
It need scarcely be said that, to procure this, promises were as
plentiful as ever. The property of the Church was to be confiscated,
and the Church itself to be upset, rather than not remunerate the
bondholder. By means of deferred stocks, active stocks, and passive
stocks, bargains were concluded, and, for a time, all was excitement
in the foreign market. Every kind of security became sought for;
however worthless, it had a price; however valueless, it found a
buyer; and the debts of states which had never paid one dividend,
which were scarcely in existence, and which had not any revenue,
advanced 100 per cent.
But the market became overloaded, and holders began to realize. Every
packet from abroad bore foreign securities, and the price drooped.
During the fever, Spanish Cortes stock, which in 1833 was 16½, was
forced to 72. Portuguese was done at 102, and every foreign stock
rose in proportion.
By May, 1835, the market became overloaded; all were sellers; the
price drooped; and on the 21st the panic commenced. Spanish stock
fell at once sixteen per cent.; the scrip went to three discount; and
the lower the price, the more anxious were the holders to sell. Every
one grew alarmed; and those who had bought as a permanent investment
parted with all their interest. Private gentlemen, who had been
tempted to buy, hurried with heavy hearts to their brokers; and the
Stock Exchange may be said to have groaned beneath the burden.
To add to the distress, the greatest holder turned bear; and it is
difficult to describe the confusion with which the market closed
on the evening of the 21st of May. Some were rejoicing at their
deliverance, though suffering a large loss, while others were
absolutely ruined. In many panics there had been hope. They were
known to be alarms which time would rectify; but there was no hope
for the holder of foreign stock; it was worthless, and it was known
to be worthless. Every one felt assured that no dividend would ever
be paid upon it; and when this was remembered, men cursed the fatuity
which had led them to buy waste-paper, and execrated the greediness
which had lured them to ruin. Those who the week before possessed
securities which would have realized hundreds of thousands, were
reduced to bankruptcy. Brokers who had kept to their legitimate
business were defaulters; most who had bought for time were unable
to pay their differences; while respectable men, who had laughed
at speculation, and thought themselves too clever to be taken
in by companies, had ventured their all on the faith of foreign
governments. Establishments were reduced, families were ruined,
delicately-nurtured women were compelled to earn their bread. Death
ensued to some from the shock, misery was the lot of others, and
frantic confusion once more marked the alleys and the neighbourhood
of Capel Court. Consternation reigned paramount, and almost every
third man was a defaulter. All foreign securities were without a
price; the bankers refused to advance money; the brokers’ checks
were first doubted, and then rejected; nothing but bank-notes would
be taken; and, with a desperation which will never be forgotten,
the jobbers closed their books, refused to transact any business,
and waited the result in almost abject despair. The stocks bore no
price, the brokers ceased to issue their lists, and the blackboard
was found inadequate to contain the names. Differences to the amount
of ten millions were declared; and the entire wall would have been
insufficient to contain the names. The practice was, therefore,
dispensed with, and an additional time allowed to settle the accounts.
To mitigate the evil, the principal holders of foreign securities
formed themselves into a society to purchase all stock below forty;
but it was found inadequate to meet the catastrophe in the house,
while out of it the excitement in Spanish, Portuguese, and other
foreign funds created evils which never met the public eye, but which
are yet felt by innumerable private families.
During this period, the Royal Exchange, previous to the assembling of
the merchants, witnessed a curious scene, and beheld a motley group
of speculators; and, says Mr. Evans, in his work on the city, such
was the rage for shares in companies which had arisen out of the
general excitement, that the beadle was obliged to drive them away,
as the frequenters of ’Change could not get to their places. In the
height of this speculation, some of the dabblers made a price of one
farthing per share on a railway now promising to be the first in the
kingdom, but of which there were then no buyers.
With the above panic the present chronicle of the Stock Exchange
closes. To have brought it to 1849 would have involved living men
and their actions, and to some future historian must be left the
many whose names assume so important a position in English financial
history.
FOOTNOTES:
[7] “The prince of Hesse Cassel,” said Rothschild, “gave my father
his money. There was no time to be lost; he sent it to me. I had
£600,000 arrive unexpectedly by post; and I put it to such good use,
that the prince made me a present of all his wine and linen.”
[8] In 1824, it was said that public attention was so entirely
absorbed by financial operations, that the movements of Mr.
Rothschild and a few London capitalists excited an intensity of
expectation scarcely inferior to the march of armies.
[9] The intelligence of this gentleman was so good, that he was the
first to announce the Paris revolution of July to Lord Aberdeen, and
the victory of Waterloo was known to him some days before it was made
public.
[10] Mr. Salomons attributed the difficulties which followed his
death to the sudden withdrawal of the dexterity with which he managed
the exchanges, as Mr. Rothschild prided himself on distributing his
immense resources, so that no operation of his should abstract long
the bullion from the Bank.
[11] For a Memoir of Rothschild, see the Bankers’ Magazine, Vol. II.
p. 473, _et seq._