CHAPTER VI — THE CHALLENGE (1849-68)

 

‘I had heard a great deal about the famous place that the Rothschilds were building,’ wrote an American tourist who visited London in 1864, ‘and I sallied forth on this particular morning for the purpose of seeing it.’

The mansion was rising at 148 Piccadilly, next door to the Duke of Wellington’s Apsley House; and its owner was Baron Lionel de Rothschild, head of the London bank. The tourist was shown over the half-finished structure by the master-builder and afterwards stood on the side-walk gazing at the work with admiration.

… I noticed a gentleman a few feet from me watching the building [he continued]. He was a fat, portly old fellow, with a good-humoured face in spite of his haughty look, and I thought from his appearance he might be a contractor for the work, so I determined to accost him and gain what information I could … He was very kind in telling me much that was of interest. At last I said abruptly.

‘I suppose you have seen Rothschild, sir?’

‘Which one?’ he asked.

‘The old cock,’ I replied.

‘I see the old cock every day,’ he answered giving me a strange glance.

‘By George,’ I went on, ‘I should like to have a look at him! People say he is a gay old chap, and lives high. I wish I had him in my power — I’d not let him get away until he had shelled out a pile of money.’

The old gentleman burst out into a laugh. ‘Baron Rothschild had to work for his money and deserves to enjoy it,’ he said at length, when he had got over his merriment.

‘May be so,’ I remarked; ‘but I reckon he did a heap of squeezing to get it.’

The old man’s face flushed.

‘I have never heard the honesty of the House called into question,’ he said stiffly.

 

 

‘Didn’t you? Well to tell the truth neither have I. But I wouldn’t be surprised if I’m right after all.’ The old man’s face grew as black as a thundercloud, and he bit his lip without speaking.

‘People tell me,’ I continued, not heeding this, for I thought it natural that the old fellow should be annoyed at anything said against his employers, ‘people tell me the Rothschilds have made two fortunes. Now, as most people only make one, I feel somewhat interested to learn the manner in which this was done. Can you tell me, sir?’

‘Certainly, sir. People do say the House of Rothschild made one fortune by being careful to mind their own business and the other by letting that of others alone. Good morning, sir.’

When the tourist had recovered from the shock of this pungent observation he strolled over to a good-looking young man who was watching the construction and asked if he knew the gentleman to whom he had just been talking.

‘Baron Rothschild,’ came the reply.

There was a poignant silence, after which the American regained his composure and said: ‘He’s a crusty old chap … He’s as cross as a bear … Do you know Baron Rothschild?’ ‘I have an appointment to wait upon him today.’ ‘Then I wish you’d say to him that I did not know to whom I was talking this morning or I would not have said as much; and that he need not have been so huffish about it.’

The young man gave his promise and when he departed the American stopped a workman and asked the name of the receding figure.

‘That is one of the younger Rothschilds …’[73]

The portly, huffy gentleman with the ready wit — Baron Lionel — was the most celebrated banker in Europe, partly because London was the world’s money centre, partly because the cooperation between the five Rothschild establishments, coupled with cash resources, gave them advantages against which other financiers could not compete, partly because Nathan had passed on to his eldest son all that he had learned. For some years he had given Lionel complete responsibility. For instance, when Britain abolished slavery in 1833 the Government had borrowed £20,000,000 from the Rothschild bank with which to recompense the slave owners; and Nathan had placed Lionel in charge of the funding operation.

From that time onwards Lionel spoke with authority, and when his father died three years later, he stepped easily into the position of Senior Partner, assisted by his three brothers, Mayer, Anthony and Nathaniel. In 1839 he floated a massive loan for the United States. In 1845 he helped his uncle James to finance the French Northern Railway; in 1846 he formed the British Relief Association Fund at New Court to aid victims of the Irish famine; and the following year joined with Barings to raise another £8,000,000 for the Irish Famine Loan, this time waiving his commission. In 1854 he floated £16,000,000 to finance the Crimean War. Indeed during the forty-three years that he was head of the bank, Rothschilds raised over £1,000,000,000 in foreign loans. Prussia, Russia, Portugal, Greece, Holland, Belgium, France, Hungary, Egypt, Turkey, the United States, Brazil, New Zealand, all came to New Court for money.[74]

Unlike the swashbuckling Nathan, the new generation did not despise charity. All the sons had inherited from their devout mother strong feelings for race and religion, and were glad to serve as benefactors and protectors. If a rabbi married he was sure to receive a gift from the family, while the London synagogues celebrated their feast days bedecked in flowers ‘with the compliments of N. M. Rothschild & Sons’. Lionel was meticulous in observing the various ceremonies. On the morning of the Feast of Tabernacles he personally hammered palm leaves on to the walls of New Court. The office was closed on Saturdays, and like his father and uncles before him, he frequently used Yiddish as a code. Once when fighting was taking place in South Africa and Lionel got wind of a truce he wired: ‘Mr Sholem is expected soon’. Sholem was the Jewish word for peace.

At the end of the 1830s Mrs Nathan began to complain that her sons were pasty-faced from spending so much time indoors. Furthermore they were putting on weight. Exercise was what they needed; and as Mrs Nathan was not a woman to do things by halves, she decided that the boys must ride to hounds. Without more ado she bought a few fields and a cottage near Aylesbury, in Benjamin Disraeli’s ‘beloved, beechy Bucks’, thus launching the Rothschild invasion of the Chilterns.

All the brothers found hunting an irresistible pastime, particularly Lionel, who set up his own kennels at Hastoe in the wood above Tring. In those days the Aylesbury Vale was a wild, rough country which had scarcely been hunted over. The fields were almost entirely destitute of gates, there were no bridges over the brooks and not a draining tile between Tring and Bicester. New Court, only forty miles away, was another world.

In the early 1850s Mayer and Anthony bought adjoining estates near Aylesbury; but whereas Anthony was content with a modest farmhouse at Aston Clinton, Mayer acquired seven hundred acres and built a fantastic house, Mentmore Towers, which created a sensation not only in Buckinghamshire, but throughout England.

Mentmore was the child of the Great Exhibition of 1851, which was dominated by the epoch-making Crystal Palace, that miracle of glass and iron designed by Joseph Paxton. As soon as Baron Mayer saw the stupendous, fairy-like structure, he got in touch with ‘the new Christopher Wren’ and asked if he would build him a palace. Baron James of Paris soon followed suit. On a trip to England he met Paxton at Mayer’s house and was shown the plans for Mentmore. He was ecstatic and longed to see a replica erected on his own vast estate, twenty-five miles east of Paris, which he had bought in the 1820s. ‘Build me a Mentmore,’ he commanded Paxton, ‘only twice as big.’ Paxton did as he was bid and the result was Ferrières, which today is owned by Baron Guy de Rothschild.

Lord Crewe called Mentmore ‘an amazing creation’, while Lady Eastlake wrote: ‘I do not believe that the Medicis were ever so lodged at the height of their glory.’ The massive square towers and pinnacles, the glass roof over the gigantic hall, and the sheets of plate glass through which one could see the Chilterns, were startling innovations; so was the hot-water heating, the artificial ventilation and the parquet floor …

Most of the furniture came from France, some of it bearing the cypher of Marie Antoinette; there was also a priceless collection of French tapestries, Limoges enamels, Sèvres porcelain. Italy was represented by objets d’art from the Doge’s Palace at Venice and spectacular gilt lanterns from the Doge’s barge, while Belgium contributed a black and white marble chimney-piece that had been taken from Rubens’ house in Antwerp. In order to protect himself from criticisms of parvenu vulgarity, Baron Mayer was fond of saying that it was cheaper to buy French antiques than to go to Sir Blundell Maples’ new department store on the Tottenham Court Road. Nevertheless guests were astonished to find priceless French commodes, one end sliced off to lie flush with the wall, covering the wash basins in their bedrooms.

Baron Mayer’s ostentation, however, did not upset the local population. Indeed, he and Anthony were the most popular squires in the country, for they not only used their money to embellish their houses but kept their farm labourers employed all winter, which was not the general practice in the 1850s. Although this was the age of inevitability, ‘the rich man in his castle, the poor man at the gate’, a state of affairs believed to be ordained by no less a being than the Almighty, no beggar was ever turned away hungry from a Rothschild house. Indeed all Rothschilds of the new generation had a strong sense of duty. Their public spirit combined with the millions of money sometimes produced startling results. For instance when Baron Anthony’s daughter, Constance, approached her sixteenth birthday and her father asked her what she would like to have for a birthday present, ‘I boldly answered “an infants’ school”. My request was granted and I was allowed to lay the first stone of the new building.’ It was not everyone’s father who could humour a daughter with such panache.

All Rothschilds liked horses; and although Anthony told his bride, a Montefiore, ‘you will perceive, my dear Louise, that all the family are complete slaves to business,’ the brothers managed to hunt stags with the ‘Baron’s Staghounds’ (Baron Mayer was the Master) every Monday and Thursday, and frequently found time to go fox-hunting on Tuesday, but not on Saturday, which was the Sabbath. Lionel’s kennels had been moved to Mentmore some years before the house was built and the Rothschilds financed the pack. Lionel was the only unlucky brother. He often hunted on Tuesday and Thursday but invariably had to forgo the Monday sport in order to attend the bank. He complained that he was ‘badly used’ but managed to make up for his disappointment by rising at dawn and ‘turning out a deer’ before catching the London express from Tring Station.

A shadow fell over this agreeable existence when Nathaniel, the soft-hearted brother who had helped his sister, Hannah, to marry Mr Fitzroy, had a terrible fall. He was left half-paralysed, a permanent cripple. Nathaniel, however, was a man of great character, and soon set about reorganizing his life. He loved France and in 1851 moved to Paris, where he settled down to become a collector and connoisseur of the arts. In 1853 he bought vineyards near Bordeaux which became known as Mouton Rothschild and where he lived for several months each year.

Not long after he had taken up his new residence, the organizers of an exhibition scheduled to open in Paris in 1855, with the hope of rivalling the Great Exhibition of London, decided to display France’s most celebrated red wines. As there were over two thousand separate wine growers, a committee was set up to select sixty of the best clarets. Mouton was placed first in the second cru. Nathaniel was highly indignant at the classification, particularly as Lafite, a vineyard owned by a Dutchman M. Vanlerberghe, running adjacent to his own, was placed first in the first cru. He tried to get the rating altered and when he failed dismissed the matter with contempt, insisting that the decision had been purely arbitrary. As a result someone paraphrased Rohan’s ditty Roi ne peux, Prince ne veux, with the following lines: Premier ne puis,

Second ne daigne,

Mouton suis.

Baron Mayer was the second of the four brothers to give up hunting but for very different reasons. Increasingly his interests became concentrated on the turf. He set up a stud farm at Crafton, near Mentmore, and had the joy of breeding a number of great horses. In the course of his racing career he won the Derby, the Oaks, the St Leger, the Cesarewich, the Goodwood Cup twice, the Thousand Guineas three times. When the crowd spoke of ‘Baron Rothschild’ they did not refer to the man who ran the bank but the man who ran the horses.

The banking Baron — Lionel — grumbled about working too hard, yet he gave a great deal of time to causes dear to his heart, the chief of which was a long battle with the Mother of Parliaments. Benjamin Disraeli persuaded him to throw down the gauntlet. Although in his infancy, Disraeli had been baptized a Christian, he resented the fact that although Jews could stand for Parliament, they could not take their seats if elected, for the simple reason they had to make a statutory declaration ‘on the true faith of a Christian’. Lionel not only was the most prominent Jew in England, Disraeli argued, but he had the necessary money and prestige to win what was bound to be a bitter and protracted fight. At first Lionel refused. He was a shy man who hated making speeches, and the idea of becoming a controversial figure appalled him.

But in the end Disraeli’s persuasiveness overcame his friend’s diffidence, and Lionel fired the opening salvo in 1847 when he mounted the hustings as Liberal candidate for the City of London. ‘My opponents say that I cannot take my seat,’ he told the voters. ‘That is rather my affair than theirs. I have taken the best advice. I feel assured that as your representative, as the representative of the most wealthy, the most important, the most intelligent constituency in the world, I shall not be refused admission to Parliament on account of any form of words.’[75]

Lionel was only half right. Although, when he was elected, the House of Commons passed a Bill permitting him to take his seat, the House of Lords rose in revolt. To drop the word ‘Christian’ was the thin end of the wedge. The Duke of Cambridge could not consent to admit Jews as long as the British Government was to remain ‘Christian’. The Earl of Winchelsea declared the Bill to be an insult to the honour and glory of God. The Bishop of Oxford maintained that sitting in Parliament was not a right but a trust, and warned that Jews were an alien race, secretly conniving with other nations. Lord Ellenborough was the most passionate of all. He spoke to his fellow peers in 1848, when the French revolution had swept Louis-Philippe from his throne, when the Prussian King had fled from Berlin and the Hungarians had broken away from the Habsburg Empire. ‘After the warnings of Providence in the shape of famine and distress,’ cried Ellenborough, ‘nations convulsed on every side, how can this country hope to escape such contamination except by heavenly aid?’ He went on to warn their lordships not to offend the Heavenly Father ‘by abandoning the exclusively Christian character of this Legislature’.[76] Their Lordships responded warmly, and the Commons Bill eliminating the restrictions against Jews was defeated.

This was the beginning of a siege that lasted eleven years. Six times Lionel was elected by the City of London. Six times he marched to the Table demanding to be sworn by the tenets of his faith. Ten times the Liberals introduced a Bill revising the Oath of Abjuration. Ten times Benjamin Disraeli who, as a baptized Jew, did not suffer from the disability clause, crossed his own party, the Conservatives, and spoke in favour of the Liberal revision. The Jewish race, argued Disraeli, were men who acknowledged the same God and admitted the same revelations; if they did not believe all that Christians did, Christians believed all that they did.

The seventh time, in 1858, the Lords relented, consenting to a Bill which allowed each House to modify the oath for its own members. On 26 July Lionel became a Member of Parliament. Although for over a decade he had spent huge sums of money electioneering, although he had stirred emotions from one end of the Empire to the other, although his long-suffering wife complained wearily, ‘for eleven years we had the M.P. question screaming in every comer of the house’, at last he had established his principle. Now the portals of the Commons swung open and he took his seat, but much to everyone’s surprise he remained silent. Indeed, during the decade that he sat as a member of Parliament he never made a single speech.

*

While the English Rothschilds made money almost effortlessly in their land of milk and honey, warmed by a political climate so stable as to be the envy of Europe, the French Rothschilds had no alternative but to continue along the same windswept path that they had been travelling for forty years, continuously harassed by the storm of change. The fact that Baron James, confidant of the deposed King Louis-Philippe, had survived the revolution and managed to scrape up a polite acquaintance with the new President of the Republic, Louis Napoleon, nephew of the great Napoleon, whom the Rothschild family had fought so bitterly, was remarkable enough. Yet it had cost James a fortune. Not only had he been left with millions of francs’ worth of French bonds which had plummeted to new lows, but he had been forced to dig deep in his pocket to protect life and property. And now, at the end of 1849, he suffered an even worse blow when he learned that his bitterest enemy, Achille Fould, whose banking firm, Fould and Oppenheim, had backed Louis Napoleon’s bid for power, had been appointed Minister of Finance.

Achille and James had opposed each other not only as bankers but as railway entrepreneurs. In 1830s the two men had built tracks from Versailles to Paris on opposite sides of the Seine, prompting Heinrich Heine to refer to them as the ‘Chief Rabbis of the Rive Gauche and the Rive Droite’. Soon the rivals were vying with one another for a plum concession: permission to build the Northern Railway. James triumphed and assigned the task to his brilliant protégé, Émile Pereire, who could be relied upon to outwit all newcomers.

The Pereires were Portuguese Jews who had emigrated to France in the early part of the century. The fact that Émile was a convinced socialist who contributed articles to Le Temps and the Journal des Debats did not disturb James, who believed that the views of his assistant would modify in proportion to the money he accumulated. By 1845, when the main track of the Chemin de Fer du Nord was completed, Émile was a rich man; yet he not only clung stubbornly to his convictions but watched closely for an opportunity to put his ideas into practice.

He reached a dramatic decision in the autumn of 1849 when the President of the Republic, Louis Napoleon, accompanied by Baron James and himself, attended the opening of the Saint-Quentin station. The President was acclaimed by the crowds with cries of ‘Vive l’Empereur’. Émile Pereire was impressed. If Louis Napoleon had such a firm hold on the affections of his people, Achille Fould, the new Minister of Finance, and not James de Rothschild, would dominate the second half of the century. A few weeks later Émile deserted his patron and joined Fould. Baron James was so stunned that he refused to believe it. He gave instructions that Émile’s desk was not to be removed, for ‘le petit Pereire reviendra’.

But Pereire did not return. Instead he gave Achille Fould a novel idea: the conception of a popular bank to be known as the Crédit Mobilier, into which all the small savings of France would flow. Not only would this semi-socialist institution break the grip of private bankers by enabling the government to raise loans directly from the public, but it would allow the Minister of Finance to direct money into the areas where it was most needed.

This last argument was enough to convince Fould, for France lagged far behind England in industrial development and Louis Napoleon was determined to quicken the pace. His resolve had been strengthened by London’s Great Exhibition where, in the acid words of Karl Marx, ‘wonders far surpassing the Egyptian pyramids, Roman aqueducts and Gothic cathedrals’ were on display. Although France had a larger population than any other European country, and enjoyed huge agricultural resources, she only had 2000 miles of railway as compared to England’s 6600 miles. Indeed Britain was producing 57 million tons of coal compared to Germany’s 6 million and France’s 4½ million; 2½ million tons of iron, compared to the USA’s ½ million, France’s 400,000 and Germany’s 250,000. Half the world’s tonnage of ocean-going shipping was British; and among the amazing inventions displayed at the Exhibition were locomotives and textile machines and Applegarth’s vertical printing press which turned out 10,000 sheets of the Illustrated London News in an hour.

While the formation of the Crédit Mobilier was being discussed in secret, James de Rothschild was fighting to maintain his position with every weapon that came to hand. He knew that he could never gain the confidence of Prince Louis Napoleon, if only because the Rothschild family had risen to fame and power by its implacable opposition to Napoleon I. Secretly James hoped that Louis Napoleon would be replaced as President of the Republic. The only man capable of ousting him was General Changamier, who controlled the military forces of the capital, the National Guard.

The general was a Rothschild man in a literal sense as he was madly in love with James’s wife, Baroness Betty. He did not try to conceal his infatuation, and although the world is supposed to love a lover, apparently he was so indiscreet that he became a figure of fun. ‘The feelings of popular resentment from which the General is suffering just now,’ the Austrian ambassador reported to Vienna, ‘is largely attributable to his intimate relations with the Rothschild family, arising out of a sentiment de cœur for Madame James de Rothschild. The Prince, whom Changamier has on several occasions provoked by holding reviews of the troops without even advising him previously, learnt that the said lady was present at one of them in a magnificent equipage, and that the gallant general saluted her before the whole army of Paris.’[77]

As the prestige of the love-sick general declined, that of Louis Napoleon rose. By January 1851 the Prince felt strong enough to dismiss Changamier. The National Assembly protested hotly but the Prince retaliated a few months later by dismissing that body as well. ‘Your Constitution and your National Assembly are detestable,’ he told the people of France. ‘I liberate you from them.’ Now he was a dictator, and in the next months deported or arrested 27,000 people, among them Changamier. ‘The arrest of the General has brought sorrow into the home of the Rothschilds,’ reported the Austrian ambassador, ‘but it must be admitted that Baron James is bearing the blow with great resignation.’[78] A plebiscite of the French people declared overwhelmingly in favour of a restoration of the monarchy; and in November 1852 Louis Napoleon became the Emperor Napoleon ill.

That same month Pereire’s new bank, the Crédit Mobilier, sprang into being. Achille Fould had found no difficulty in winning the Emperor’s approval. That the State should make itself independent of the anti-Napoleonic, pro-Orleanist Rothschilds, and raise its loans through souscriptions nationales was bound to interest the sovereign. Furthermore Napoleon saw the venture as an institution that would befriend the common man. Oddly enough the semi-socialist conception appealed to many leading capitalists, but for very different reasons. They envisaged an opportunity to use the huge flow of shareholders’ money on the Stock Exchange.

The Crédit Mobilier’s twelve thousand shares, at 500 francs each, were introduced on the Bourse at 1,100 francs; and four days later they had risen to 1,600. The list of founder shareholders was imposing. Not only did it include such eminent bankers as Barings of London, Torlonia of Rome, Heine of Hamberg, Oppenheim and Laffitte of France, but millionaire socialites such as the Due de Galliera and the Duchess of Leuchtenberg, a daughter of Tsar Nicholas I of Russia. As Minister of Finance, the name of Achille Fould was not on the list; but his brother, Benoit, owned a quarter of the shares. Another large block was owned by Émile Pereire and his brother, Isaac. But the most surprising of the large shareholders was Napoleon III’s half-brother, the Due de Morny. It was considered astonishing that this gentleman had managed to reconcile his Government position as Président du Corps Legislatif with the commercial post Director of the Crédit Mobilier.

Baron James Rothschild had no faith in the new organization. He did not believe that a bank based partly on credit, partly on speculation, and which had the right to purchase and grant loans on the security of its own shares could remain solvent. James’s opinions were dismissed, however, as wholly biased.

Meanwhile the launching of the new company had provoked an unexpected wave of speculation, which this time penetrated to the working man. By encouraging butcher, baker and candle-stick maker to put their savings into the new venture the government was, in fact, introducing the public to the exciting pastime of gambling. Money, we are told, ‘became the God, speculation the Creed, the Bourse the Temple, the quotation list the Bible, the bankers the Priests, the brokers the Believers, the investors the Martyrs’. The daily newspapers featured stock-market quotations in leading positions, while James de Rothschild alone grumbled that it was impossible for everyone to become rich. When in due course the market fell those who lost their savings blamed the Due de Morny, but he had made so much money that he did not mind becoming a scapegoat.

Baron James continued to fight a rearguard action to retain some shred of his former influence. His wife still gave the best parties in Paris, and from 1850 onwards a beautiful Spanish girl in her twenties, Eugénie de Montijo, the daughter of a Scotswoman and an Andalusian grandee, was a frequent guest. At first no one could understand why the Rothschilds made such a fuss of Eugénie. They were aware, of course, that Napoleon III had tried to seduce her but as the Emperor had an eye for the ladies this was not a singular event. Then came rumours that Napoleon was thinking of marrying Eugénie. Government circles hotly denied the stories; the Emperor would wed a princess of royal birth. Sophisticated Paris decided that Napoleon was playing a devious game in order to conclude an alliance worthy of his position.

The speculation came to an end in January 1853 when the Emperor gave a ball at the Tuileries. Baron James accompanied Eugénie while his son Alphonse escorted his mother. The gentlemen took the two ladies to the exclusive Marshal’s Chamber. Eugenie had just seated herself on a sofa in the middle of the room when Madame Drouyn de Lhuys, the wife of the Foreign Minister, whispered to her that the settee was reserved for wives of ministers. Eugénie rose, her face flushed with embarrassment. The scene was observed, however, by no less a person than Napoleon himself, who hurried up to Eugénie, offered her his arm, and led her to the room set apart for members of the Imperial family. Eleven days later Napoleon announced to the world that he had chosen Eugénie, ‘the woman I love and honour’, for his wife.

Although James was still excluded from the Emperor’s council chamber he confided to Betty that he had half a foot in the Emperor’s bedroom. Yet even now life did not proceed smoothly. The Austrian ambassador, Count Hübner, was long on pedigree and short of money, and therefore resentful of the Austrian consul-general, no other than James de Rothschild. ‘In other countries,’ Hübner observed contemptuously, ‘where everything has not yet been levelled by sixty years of revolution, as it has here in France, there are still, thank God, separate classes; but here money is everything, and in the sentiments of the nation the Rothschilds and the Foulds have the precedence of the Montmorencys and the Rohans.’[79] Hübner’s disobliging comments were repeated to James, who remarked that it was a pity that the Habsburgs had not sent to Paris a grand seigneur instead of ‘a puffed-up little man’.

When Hübner learned of this remark he was so incensed that he decided to back Fould and the Pereires in every move they made against the Rothschilds. He even indulged in petty warfare on his own account. When an invitation from the Emperor for the betrothal ceremony in Notre-Dame arrived for James, sent care of the Austrian Embassy, it was not forwarded. On the great day everyone was present except the Rothschilds. Eugenie discovered what had happened and complained to Napoleon. At the court ball in March the Emperor walked past Hübner without so much as a bow, and shook James by the hand. But unfortunately this incident did not signify a change of heart on the part of Napoleon III, and only served to increase Hübner’s hatred of the Rothschilds.

*

While Baron James was fighting Achille Fould and his new financial colossus in Paris, his brothers were exerting the maximum pressure on the governments of Europe to alleviate the condition of the Jews. Carl of Naples extracted promises from the Pope in return for loans, while Amschel of Frankfurt applied pressure on Prussia to lift the restrictions on German Jewry re-imposed after the defeat of Napoleon I. Salomon in Vienna, however, was far too busy breaking through anti-Jewish barriers on his own account to give much time to his co-religionists, and in 1853 Austria suddenly passed a law which once again barred Jews from acquiring property. Although Salomon was exempted by special statue, the family rose in arms. Under James’s leadership they formed a financial syndicate and drove down the price of Austrian bonds on all the European exchanges. The Austrian ambassador in Paris reported to Vienna that Baron James was ‘beside himself’ and advised his Government ‘to soothe the children of Israel’. The Government responded and the new law was repealed.

Although the victory had been achieved by James’s strategy. Amschel was convinced that the Lord had answered his prayers. As the most orthodox of Gutle’s five sons, and the least intelligent (Gentz had described him as actually ‘possessing a very weak intelligence’), Amschel relied on his brothers to tell him what to do and on Jehovah to see that it was done well. Nevertheless, he occupied a geographically strategic position as Frankfurt was the most important city in northern Europe, lying mid-way between Paris and Vienna, a natural distributing point for Germany west of the Danube and the small countries contiguous to it. ‘Every great operation originating in London, Paris and Vienna reached the investors in those markets through Amschel’s hands, and the Frankfurt Bourse, as the outlet of the Rothschild world consortium, attained an importance it had never had before.’[80]

Furthermore, as no one knew the actual distribution of power within the family circle, Amschel enjoyed a prestige fantastically out of proportion with his ability. For instance, the North German Confederation, the forerunner of the German Empire, kept its funds on deposit with him, and when it needed a loan for the Imperial Navy, the Federal Council, which sat in Frankfurt, quite naturally turned to him.

Like all Rothschilds, however, Amschel had an eye for a coming man, and when, in 1851, Prussia appointed Otto von Bismarck its representative to the Frankfurt Diet, Amschel lost no time in extending him an invitation to dinner. He asked him so many weeks in advance, to make sure of his acceptance, that Bismarck replied puckishly that he would come if he were still alive. ‘“Why shouldn’t he be alive?” the famous Jew asked in puzzled tones, “why should he die? The man is young and strong! …”’

I like the Baron though, [Bismarck continued in a letter to his wife] because he is a real old Jew pedlar and does not pretend to be anything else; he is strictly orthodox and refuses to touch anything but kosher food at his dinners. ‘Take thome bread for the deer,’ he said to his servant as he went out to show me his garden, in which he keeps tame deer. ‘Thith plant,’ he said to me, ‘cotht me two thousandth gulden — on my honour it cotht me two thouthand gulden cash. You can have it for a thouthand; or if you like it ath a prethent, the thervent will bring it to your houthe. God knoweth I like you, you’re a find handthome fellow.’ He is such a short little thin person … childless, a poor man in his palace.[81]

Amschel not only was religious but extravagantly generous, giving huge sums to charities, supporting whole hospitals on his own, such as the Frankfurt Jewish Hospital. Yet, ironically, the Almighty had singled him out, the most religious of the five brothers, for punishment. He was the only one to be denied that most precious of the Rothschild commodities: sons. For years he had prayed that God would relent. ‘I have never seen any man so distressed, beat his breast so much and implore the mercy of heaven as Baron Rothschild on the long day [Day of Atonement] in the synagogue,’ wrote a contemporary. ‘He often faints from the strain of interminable prayer, and strong smelling plants from his garden are then brought and put under his nose to bring him around. In earlier years he inflicted severe mortification on himself in order to prevail upon heaven to grant him a child, but it turned out to be in vain.[82]

Amschel’s joyless life was brightened by his superb garden which was filled with rare blooms from all over the world; and by his decision in 1850 to adopt one of his nephews as a son, Mayer Carl, offspring of his brother Carl of Naples. The Prussians were eager to keep on the right side of the banking Baron and advised the King, Frederick William IV, to appoint young Mayer Carl Court Banker to the Prussian kingdom, and to give him the Order of the Red Eagle, Third Class. The mistake His Majesty’s advisers made, however, was to transform the Red Eagle, Third Class, into a Jewish Eagle. Normally the medal had a base in the shape of a cross: but now it appeared as an oval. Apparently Prussian courtiers felt that a Jew should not be allowed to wear anything that suggested a crucifix.

The young man, soon to be head of the Frankfurt House, graciously accepted the decoration, then put it in a drawer and never wore it. After three years the Prussian Government took umbrage and ordered Bismarck to send them a detailed report on Mayer Carl’s medal-wearing habits, with particular reference to the Red Eagle.

Bismarck replied:

In accordance with the Royal Command of the 27th instant I have the honour dutifully to inform you that I have not seen Court Banker Mayer Carl von Rothschild wearing such a decoration, since he does not go to big functions, and when he does wear orders, prefers to wear the Greek Order of the Redeemer or the Spanish Order of Isabella the Catholic. On the occasion of the official reception which I myself gave … which he would have to attend in uniform, he excused himself on the grounds of ill-health, it being painful to him to wear the Red Eagle decoration for non-Christians, as he would have to do on that occasion. I draw similar inference from the fact that whenever he comes to dine with me3 he merely wears the ribbon of the Order in his buttonhole …[83]

Prussia never de-segregated its eagles and the Rothschilds never forgot. Even though Berlin became one of the great cities of Europe after 1870, even though the Hohenzollem Emperor, William II, pressed the family to establish a branch of the bank in his capital, the Rothschilds refused. As things turned out, it saved the family from large financial losses, but it was not shrewdness that prompted the decision, only reluctance bred of a long memory.

*

Meanwhile the battle between the Crédit Mobilier and Baron James de Rothschild was reaching its climax, not only in Paris where Achille Fould had moved from the Ministry of Finance to the Ministry of State, but in Carl von Rothschild’s Sardinia and Salomon von Rothschild’s Austria. Pereire made an attempt to lure Sardinia away from the family by offering loans on cut-rate terms. James sent his son, Alphonse, to forestall the move. Alphonse succeeded but it cost him a great deal of money.

The directors of the Crédit Mobilier merely shrugged their shoulders for they had far more important plans in the offing. Meanwhile in 1854 the Crimean War broke out. Russia had attacked Turkey the previous year, and Britain was determined to prevent her from over-running the country and dominating the Dardanelles. Napoleon III joined England as the Tsar persisted in treating him as a parvenu and had insulted him by addressing him as ‘Sire et bon ami’ instead of the customary ‘Mon frère’.

Although ‘peace on earth’ was a basic Rothschild principle, conducive to high profits, for the first time no branch of the family found itself on an opposing side. Austria tried to remain neutral but gave the allies her blessing: even Prussia, despite the close relationship between her King and the Tsar, refused to throw in her lot with Russia. If war was inevitable the Crimean War was an ideal conflict for the Rothschilds, as Nicholas I’s anti-Semitic policies lent a moral tone to the cause. Amschel and Lionel underwrote the British war loan of £16,000,000 while James took a large part of France’s war loan of 750,000,000 francs. Rothschild unity was not lost on Bismarck. ‘The attitude a Government brings to bear upon the Jewish problems … profoundly affects the House …’, he reported to the Prussian Government. ‘… There are occasions when other than purely business considerations determine the policy of the family …’[84]

Yet business — at least the business of the Crédit Mobilier — fared not at all badly as a result of the Crimean War. As usual, the Austrian Government was desperately short of cash; despite its neutrality it had to keep its army at the ready, and this cost money. Count Hübner, always eager to do a bad turn to the Rothschilds, whispered in the ear of Émile Pereire that the Austrian State Railways might come up for sale. All the railways in the Habsburg monarchy, except for the Rothschilds’ Nordbahn and a railway line in the south, which belonged to the rival Sina, were owned by the state.

Pereire immediately got in touch with the bitterest of the Rothschild enemies — the Barons Sina, Eskeles and Pereira — and formed a company. Other directors were the ubiquitous Due de Morny, Adolphe Fould, son of the minister, and the two Pereires. The object of the company was to assist the Crédit Mobilier in gaining control of the Austrian lines; and on l January 1855 the latter managed to buy a large chunk of the railways at a price nearly a quarter lower than the actual cost of construction. This was a great shock to the Rothschilds who had been trying for years to increase their railway ownership and who now feared that the Nordbahn might slip from their fingers.

As the battle raged with increasing fierceness, and the concentrated strength of the family was needed more urgently than at any time since the heyday of Napoleon Bonaparte, three of the four brothers died, all in the year 1855: first Carl of Naples, then Salomon of Vienna, and finally Amschel of Frankfurt. Only death could stalk the family through the boardrooms of Europe and for much of the year business was suspended while cantors wailed their burial rites and women hooded their mirrors in order to conceal even from themselves grief that might be interpreted as a protest against God’s will. The financial world watched with avid attention: was Rothschild supremacy coming to an end because the brothers insisted upon displaying the same sense of unity in dying as in living?

Certainly the Crédit Mobilier looked unbeatable. Not only had it snatched away the Austrian railways, not only had it replaced the Rothschilds as France’s financial arm and gained control of over half the nation’s issuing business, but now it was making record profits in a partnership with the Prefer de la Seine, Baron Eugène Haussmann. The Emperor had given Haussmann the gigantic task of ‘transforming’ Paris. He was to clear away the higgledy-piggledy streets and slum dwellings and to produce a network of boulevards and parks and squares that would free the monuments of the past — the Louvre, the Hôtel de Ville, Nôtre-Dame and many others. Paris was to be made ‘a capital worthy of France’; and a capital in which insurrection would be a problem. A city with straight avenues would not favour ambushes; furthermore troops could march abreast to reach a trouble spot in record time.

During the next decade over twelve thousand houses were pulled down in the department of the Seine alone; and as the Government indemnified the owners, speculators made a fortune. ‘There are people who specialize in buying, building and establishing a commercial house in the district which they consider should soon disappear …’, wrote a contemporary observer. ‘… A coffee house keeper … has been demolished three times thanks to careful calculations. He had progressed from one indemnity to another until he recently managed to build an enormous and marvellous cafe — which he hopes to see demolished before he dies …’[85]

The Crédit Mobilier lent Baron Haussmann large sums of money at reasonable rates; in return the directors always seemed to know where the next demolitions would occur. Madame Haussmann innocently observed that the Baron himself no sooner purchased a house than he had to hand it over to the Government to make way for a new road.

In 1856 when the Crédit Mobilier published its accounts for the preceding year the public learned that the company had made a profit of £28,000,000 on a capital of £60,000,000. It paid the amazing dividend of forty-seven per cent. Whatever James de Rothschild might say, the directors appeared to have the patent for a formula that eventually would put every type of bank out of business.

While persistent rumours swept the Bourse that Messieurs de Rothschild Freres was facing hard times the Rothschild chief accountant, a man called Carpentier, ran off with 30,000,000 francs (about £1,200,000). For many months he had been appropriating neatly stacked bundles of share certificates and selling them in small amounts on the stock exchange. In the autumn of 1856 he had taken a few days’ leave and never returned. By the time the theft was discovered, however, the culprit had sailed the Atlantic in a specially chartered liner and disappeared into the anonymity of the United States. Baron James de Rothschild made a public statement saying that he, personally, would absorb the loss. There was no more talk of insolvency. Only one family in Europe could make such a grandiose gesture.

Meanwhile the Crédit Mobilier had received its first setback. At the end of 1855 the directors, encouraged by their take-over of the Austrian railways, decided to establish a Crédit Mobilier in Vienna. But when they applied to the Habsburg ministers they were told that a ‘people’s bank’, very much like their own, was about to spring into being. It boasted the greatest families in the Empire: Fürstenbergs, Schwarzenbergs and Auerspergs. Even its name was similar to the Crédit Mobilier, for it would be known as Kreditanstalt. And it was organized and led by Salomon von Rothschild’s fifty-two-year-old son, Anselm.

As a youth Anselm had been regarded as a trifle wild. His refusal to take life seriously and his tendency to gamble at cards had so worried his father that Salomon had curtailed his stay at Berlin University and sent him to Paris to serve as an apprentice to his uncle (and brother-in-law) James. But Paris was scarcely a place for prodigals and the family heaved a sigh of relief when the austere, childless, deeply religious Uncle Amschel offered his nephew a partnership in the Frankfurt Bank.

Oddly enough Amschel was not a stem taskmaster and allowed his nephew all the latitude he desired. Not unnaturally the latter frequently stayed out until the small hours of the morning, invariably driving home in a two-horse cab and invariably giving his driver a handsome tip. Once Baron Salomon happened to hire the cab that Anselm normally used. When he paid the fare the driver stared incredulously at the money in his palm. ‘What’s the matter?’ asked Salomon. ‘Isn’t it correct?’ ‘Yes sir. But your son usually gives me four times as much.’ ‘Indeed,’ said Salomon, ‘but you see he has a wealthy father and I have not.’

Anselm’s wild oats were short lived, for when he was only twenty-three he married Lionel de Rothschild’s sister, Charlotte, and settled down to an exemplary existence in the exacting confines of Frankfurt society, where he remained for nearly thirty years. According to Constance de Rothschild, who married Lord Battersea, he was a man of imagination and wit; according to his son, Ferdinand, a man who loved sport and whist and amusing talk but took ‘only a feeble interest in his children’. No doubt Frankfurt was something of a penance, for when Salomon died in July 1855, and Anselm was summoned to Vienna to take his place, his whole personality seemed to change. Suddenly he was smiling and animated and frantically busy. He made trips to London and Paris in a flurry of activity, and travelled regularly between Frankfurt and Vienna.

All became clear on 12 December 1855 when he invited subscriptions for shares in his great Austrian enterprise. People queued all night to buy, and by evening over 644,000,000 florins had been offered for the 15,000,000 florins’ worth of shares for sale. ‘Everyone believed that the golden age of cheap credit had come,’ remarked a contemporary, ‘and everyone flocked to be among the first to receive the blessings …’ The public was not mistaken; within a week the shares had risen from 17 to 34.

The unassuming, middle-aged, forgotten Anselm, who had spent the major part of his life in the shadow of his father’s and uncle’s fame, had proved himself a true blue Rothschild by stepping forward and successfully bearding the giant; and in 1857, almost as a suitable commemoration for the family deliverance, a Rothschild once again married a Rothschild. Lionel’s eldest daughter, Leonora, one of the most beautiful girls in England, wed James’ eldest son, Alphonse, the crown prince of French finance. The wedding took place at Gunners-bury Park. The bride had ‘lovely … liquid almond-shaped eyes, the sweet complexion of a tea rose’. Benjamin Disraeli gave the toast. ‘Under this roof,’ he said, ‘are the heads of the name and family of Rothschild — a name famous in every capital of Europe and every division of the globe — a family not more regarded for its riches than esteemed for its honour, integrity and public spirit.’[86]

Soon the four cousins were working together as smoothly as the brothers before them: Alphonse of Paris,[87] Anselm of Vienna, Lionel of London, Mayer Carl of Frankfurt. To call them cousins, of course, was something of an understatement, for the plethora of Rothschild intermarriages had produced a jungle of double and triple relationships. Anselm, for instance, was married to Lionel’s sister Charlotte, so he was not only Lionel’s cousin but his brother-in-law, and as Alphonse’s mother was Anselm’s sister, the two were uncle and nephew as well as cousins. And as Mayer Carl was married to Lionel’s sister Louisa he not only was Lionel’s cousin but his brother-in-law; and of course this also made Mayer Carl Anselm’s brother-in-law as well as his cousin.

Together the third generation not only attacked the Crédit Mobilier on the bourses of Europe but mounted an assault on the Habsburg railway business. Early in 1856 they offered the Austrian Minister of Finance £10,000,000 for the Lombard-Venetian railway; and later more millions for the Austrian Southern Railway. Then not only came the threat of war, but war that might be fought over the Rothschilds’ newly acquired property. The great Sardinian Finance Minister, Cavour, was determined to achieve the independence of the northern Italian states from Austria, and eventually to bring about Italian unification. He was said to have paid large sums of money to the famous courtesan, the Comtesse de Castiglione, to persuade her lover, Napoleon III, that it was in France’s interest to support Italy. Apparently she succeeded for, in 1858, when Cavour visited Paris, he made a secret treaty with the French Emperor who promised to assist him if Austria tried to prevent the secession of the northern Italian states by force.

James was appalled at the prospect of war between France and Austria. Repeatedly he sought audiences with Napoleon III who alarmed him by his evasiveness. Although Napoleon had once upon a time declared: ‘The Empire is peace,’ he now explained: ‘I want peace but one can be carried away by the force of circumstances.’ James went about Paris prophesying darkly in his bad French ‘Entendez-fous, bas de baix, bas d’Embire.’

The war broke out in April 1859 and ended three months later with the defeat of the Austrian Armies at Magenta and Solferino. Tuscany, Parma and Modena won their independence and France annexed Nice and Savoy. The hated Count Hübner was recalled to Vienna and Prince Richard Metternich sent to Paris in his stead.

Although the Crédit Mobilier had financed Napoleon’s war effort, by i860 their shares had fallen from 1600 to 800. Then came a scandal involving one of the company directors, Jules Mires, who was arrested for fraud. Although Fould was forced to resign it was only a temporary reprimand, for he was reappointed a year later.

But Fould now regarded the Pereire brothers with a cold and critical eye. The Crédit Mobilier was clearly over-extended and badly managed, for every year its profits shrank. Fould advised Napoleon III that the French Government no longer could rely on the bank to provide it with loans, and advised him to patch up the quarrel with the Rothschilds. As a result, on 17 February 1862, the Emperor, accompanied by Fould, and a party which included the French Minister for Foreign Affairs and the British and Austrian ambassadors, visited Baron James’s estate at Ferrières. Joseph Paxton, who had designed the house, had not lived up to his promise as ‘a new Christopher Wren’, and some people thought Ferrières heavy and ugly. No one, however, could fault the wonderful estate with its parks, lakes and greenhouses, its riding school and sheep farm, its bakery and Dutch dairy.

When the Imperial train arrived at Ferrières station Baron James and his four sons, Alphonse, Gustave, Salomon and Edmond, were waiting to greet the Emperor. A green carpet embroidered with Bonaparte bees ran from the train to a waiting carriage. Napoleon III stepped out wearing hunting dress. He was escorted to the Rothschild coach and four, which was attended by lackeys in new dark blue, gold-braided liveries. When the party approached the chateau the Imperial standard was hoisted on the flag mast of the four towers. The Emperor planted a young cedar in the garden, then sat down to a memorable luncheon eaten off Sèvres china. In the afternoon over a thousand head of game were shot.

That night a choir from the Paris opera sang a song specially composed by Rossini: and when the Emperor finally departed he rode back to his train along several miles of road flanked by torches. Despite all these civilities the rapprochement was only skin-deep and Baron James continued to allude to the Emperor as ‘this third-class Napoleon’.

*

Even modest Lionel caught the fever of grandeur. Although he had lived all his life at 107 Piccadilly and Gunnersbury Park, he now began to acquire new properties on a breath-taking scale. In 1864 he started building 148 Piccadilly, the edifice that the American tourist had found so enthralling. When it was finished, it was one of the most pretentious houses in London. An imposing marble staircase led to the ballroom on the first floor, which had huge windows overlooking the Park, hung with silk curtains embroidered for no particular reason with river goddesses.

The marble and gold and scarlet, sumptuous, ornate, overpowering, included some wild and wonderful extravaganzas: a silver table service by Garrard weighing nearly ten thousand ounces and an apple green Sèvres china service painted by Le Bel. Every chair, a wit remarked, offered gilt-edged security.

Occasionally, very occasionally, instead of moving into a palace, a Rothschild moved out of a palace. Adolph von Rothschild of Naples was a case in point. The drive for Italian unification continued, and in 1861 the Kingdom of the Two Sicilies (of which Naples was one) was snuffed out by Garibaldi. The King and Queen fled to Paris and Adolph, who had succeeded his father Carl as head of the bank, pulled down the shutters and followed the Royal family into exile. The Italian branch never was reopened, which meant that the Rothschild banks now numbered four.

More rarely still did the Rothschilds produce a black sheep. In 1864 Baron James’s third son, the brilliantly clever Salomon, dropped dead. The boy had become a compulsive gambler which had caused his father great anxiety, as anyone with the Rothschild name was given unlimited financial credit. Apparently Salomon died of a heart attack, which fascinated the Goncourt brothers. ‘Cabarrus, Rothschild’s doctor,’ one of them wrote, ‘told Saint-Victor that the young Rothschild who died the other day really died of the excitement of gambling on the Stock Exchange. Imagine it; a Rothschild dead of a paroxysm over money.’

However, if the Goncourt brothers had known the details of a previous heart attack suffered by Salomon they would have been even more enthralled. Three years earlier Salomon had ‘dropped dead’. He had been placed in a coffin and, according to Jewish custom, carried into every room in the house. One of the pall bearers had stumbled, the coffin had crashed into a door and — Salomon had woken up! Not for another three years was he well and truly buried.

*

Meanwhile the Crédit Mobilier, the tiger that had threatened the very existence of Messieurs de Rothschild Frères, had fallen into a moribund state. In 1864 it was forced to raise huge loans for the Emperor Napoleon m in his attempt to place the Archduke Maximilian on the throne of Mexico. The ill-fated venture had involved the company in heavy losses; furthermore it was becoming plain that the ‘novel’ methods of the Pereire brothers were often nothing more than rash speculation. Now individuals were taking the company to court for ‘unfair practices’. ‘I shall do everything to support them because the Empire is deeply indebted to them,’ Napoleon said. ‘But I cannot afford to impede the course of justice.’[88]

This was the final slight. The company’s luck had turned, its unfortunate investments had caught up with it. It began paying dividends out of capital: and in 1866 showed a loss of 8,000,000 francs. The shares dropped to 350.

Now everyone recognized that the battle between the two great combines had ended with the Rothschilds as victors. In October 1867 the shares fell to 140 and the Crédit Mobilier went into liquidation. The Pereire brothers returned to private life and Achille Fould resigned his ministry for the last time. A few months later he died.

Baron James seemed in the best of health and, at the urging of his sons, Alphonse and Gustave, even bought a new estate — a vineyard in the Médoc, adjoining his cousin’s property. As this vineyard was none other than the famous Château Lafite which had been rated first in the first cru, as compared to Nathaniel Rothschild’s vineyard, Mouton, first in the second cru, the atmosphere between the cousins was distinctly cool; but, of course, that was the fun of the purchase.

Unfortunately James did not live long enough to enjoy his claret. A few months later, in 1868, at the age of seventy-six, he followed Achille Fould to the grave. Some people were shocked by the fact that the awesome Baron was made of the same flesh as his rival, and half Paris took part in the funeral. Crowned heads all over Europe sent representatives, and even the President of the United States, who had never clapped eyes on James, telegraphed his condolences.

James was buried in the cemetery at Père-Lachaise; and according to his wishes, the resting place of the man whose splendour had dazzled Paris was marked by a tombstone en-scribed with nothing but the letter ‘R’.