CHAPTER I — THE JEW AND THE PRINCE (1763-1806)

 

When the Seven Years War came to an end in 1763, two young men at opposite ends of the social scale, one a Prince, one a Jew, both twenty years old, returned to the great imperial city of Frankfurt on the Main. The Prince had never heard of his lowly contemporary: yet their paths were destined to cross and re-cross until the fame of the Jew and his sons had spread across Europe, eclipsing the importance of the Prince so completely that his name is remembered only as an incident in the rise of the Rothschild family.

Mayer Amschel Rothschild was a tall, spare man with piercing black eyes and a slightly quizzical smile. His inky beard was small and pointed and he wore a wig which, as a Jew, he was not allowed to powder. On his coat was sewn the yellow patch compulsory in Frankfurt for members of his race. When he crossed the bridge over the Main he had to pay Jew tax; and as he walked through the city streets more than one urchin jeered: ‘Jew, do your duty’. Almost automatically and with remarkable good temper he removed his hat each time and bowed.

There was no mistaking the ghetto. Although it was nothing more than a street twelve feet wide, wedged between the city walls and a trench, it differed from other streets by its dramatic entrance: a pair of heavy iron doors, closed on Sundays, and Feast days, and an arch over which was written: ‘Under the Roman Emperor’s Majesty and the Holy Emperor’s Protection.’

The 2,800 inmates of the ghetto had to pay high taxes for this fictitious protection. The custom had been instigated in the thirteenth century after a pogrom which had wiped out the two hundred Jewish inhabitants of Frankfurt, whose ancestors had lived in the city since the days of Charlemagne. Although in those times the Jews were not confined to a ghetto and enjoyed the same rights as the Christians, the current Emperor, Frederick II, had seized upon the idea of ‘protection’ to raise extra revenue. But nothing stopped the periodic pogroms which always seemed to spring from a wave of utterly irrelevant hysteria. In 1349, when the Black Plague was raging, bands of Flagellants burst into Frankfurt accusing the Jews of poisoning the wells. When the citizens ignored these provocations the Brothers secretly set fire to several houses and ran through the streets crying ‘Now the Jews are burning down your houses.’ This resulted in a general massacre.

Yet it was not for another hundred years, in 1442, that the Holy Roman Emperor bowed to pressure from the Church and ordered the Jews to remove themselves to a specified quarter of the city. The Judengasse, or Jews’ Alley, offered enough space for the 150 inhabitants but by 1760 nearly three thousand people were crammed into three hundred houses. The street was almost always deep in mud and garbage, and the stench unbearable. The heavily-bearded, Oriental figures in caftans and stove-pipe hats rooting through the stalls of second-hand junk alarmed young Goethe who grew up in Frankfurt. ‘The limited area, the filth, the crowd, the accent of an unpleasant language, all combined to produce a most disagreeable impression,’ he wrote, ‘even if one merely looked in as one passed the gates.’[1] Not only disagreeable but frightening for Gottfried’s Chronicle, read by German schoolboys, claimed that Jews spirited away Christian children and offered them as human sacrifices. Yet to Mayer Amschel Rothschild the jostling and the bargaining brought back nostalgic memories. He had grown up in the Judengasse with its welter of cheap merchandise, as had his father and grandfather before him. Despite the insistence of many writers, Jews were not denied the right of a surname; indeed, the fact that they clung to Oriental habit, referring to their male children as Sons of So and So, was a source of irritation and confusion to the authorities who eventually forced them to conform to Christian practice. Until this happened, however, many families identified themselves by nailing a picture or a sign over their front door. In 1585 records show that Mayer’s forebears had lived in a house with a red shield — hence the name Rot-schildt.

But now home meant a small, damp dwelling known as the House of the Saucepan, which Mayer shared with his two brothers, Moses and Kalmann. The boys had lost their parents in a smallpox epidemic in 1755 when Mayer was eleven years old. The father had been a small trader, and as a child Mayer liked nothing better than to accompany him on journeys in the surrounding countryside, walking behind a donkey laden with samples. Although the man and the boy rarely covered more than ten or fifteen miles a day, they frequently passed through several principalities, for the Holy Roman Empire, the system under which Central Europe had lived for a thousand years, still encompassed most of Germany. As an institution it was almost moribund; indeed Voltaire inquired caustically in what sense it was either Holy or Roman or an Empire. Its elected Emperors, almost always chosen from the Habsburg family, were no more than honorary presidents of a loose confederation which, by the middle of the century, consisted of over three hundred independent states. Governed by absolute rulers ranging from imperial knights to sovereign abbots, from landgraves to dukes, from electors to princes and kings, almost all of them were feudal and military.

As each state had its own treasury, and each treasury minted its own coins, Mayer Amschel was taught the intricacies of money at a tender age. He not only learned to translate gold and silver into the copper coins in common use, but to calculate with lightning speed the exchange rate between thalers and ducats and florins and gulden. He became so proficient that when his father opened a money bureau in the ghetto he often left his youngest son to mind the shop. The many picturesque and obsolete coins that passed through Mayer’s hands awakened the collector’s instinct; and before long the child had an array of rare specimens coming from such faraway places as the Palatinate and Russia and China.

When Mayer was ten he was sent by his parents to a yeshiva — a Jewish religious school — near Nuremberg to study to be a rabbi, a calling which several of his ancestors had adopted. The ghetto was famous for its scribes and scholars and no occupation commanded more respect than the pursuit of knowledge. Mayer was thought to have the application for such a life, but after a few months the boy became restless. The jingle of coins not only conjured up ancient lore but sang a song of freedom and power that was heady music to a ghetto boy.

Mayer remained at the school for eighteen months after his parents’ death but finally persuaded one of his mother’s relations that he was not cut out to be a scholar. Although he was only thirteen in 1757, he was sent to live in Hanover with a cousin who got him a job as an apprentice in the famous Oppenheimer bank. Here life was far from dull as the Seven Years War was in progress and the city crowded with troops. The conflict had begun when Frederick the Great of Prussia had grabbed Silesia from Maria Theresa of Austria. The latter persuaded Russia, Sweden and France to support her and soon almost all the states of the Holy Roman Empire were drawn into the quarrel. Frederick aptly compared himself to ‘a stag pursued by a pack of kings and princes’. Although most of his battles took place in eastern Germany, one of his few military allies, Duke Ferdinand of Brunswick, with an army made up of Hessians and Hanoverians subsidized by Britain, fought the French in and out of Hanover, Frankfurt and Cassel.

Very little is known of Mayer Amschel’s life in Hanover except that the city was invested several times, and that he made the acquaintance of General von Estorff, an ardent numismatist who was so impressed by the boy’s rare coins that he employed him to help with his own collection. The general does not seem to have been very active in the war; but he followed Duke Ferdinand’s fortunes closely, as much of the fighting took place in the principality of Hesse-Cassel, not far from Hanover, which was owned by his friend, the Landgrave Frederick II.

Indeed, when peace was signed in 1763 the general accepted an invitation to join the court of the Landgrave’s son and heir, Prince William, who had been fighting in the Duke of Brunswick’s army. Although William’s father ruled from Cassel, which had been occupied by the French for several years the Prince had inherited a property from his grandfather in Hanau, on the outskirts of Frankfurt, where he had the power of life and death over fifty thousand people.

A few months later Mayer Amschel followed in the general’s footsteps and made his way south. Some biographers puzzle as to why he left Hanover, where Jews had a tolerable life, for the oppression of the Frankfurt ghetto. But the truth was that the city on the Main vibrated with energy and excitement, and offered more hope of riches than any other place in Germany. Lying as it did, close to the Rhine, it was brash and competitive, and one of the great centres of Europe. For centuries its merchants had exploited its geographical position by organizing fairs which attracted buyers from every part of the continent. Perhaps the most famous event was the autumn Trade Fair, started in the eighteenth century by the ambitious owner of a printing press. It drew a monster crowd of 400,000 people, and to this very day remains an annual fixture.

The Jewish community did everything in its power to increase Frankfurt’s trade, as trade was one of the few occupations open to their race. They accelerated business by initiating bills of exchange, a novelty on the continent, the equivalent of the modem cheque. ‘I don’t think I exaggerate,’ wrote a diarist, ‘when I aver that, without the Jews, our city would not be as flourishing or as important as it now it.’ Silver was heavy and dangerous to carry. The fact that visitors could buy without paying in cash not only increased sales but earned Frankfurt a reputation for modem methods.

Apart from being drawn by the city’s magnetism, Mayer Rothschild was eager to exploit his acquaintanceship with General von Estorff and to establish a link with Prince William of Hesse. The latter was a rich man and if a Rothschild succeeded in winning his confidence there was no telling what the future might hold.

*

The German princes of the eighteenth century were famous for their unsatisfactory family relationships; and the Hesse-Cassels were no exception. The son of the Landgrave, Frederick II, was estranged from his wife, and rarely saw his sons and daughters. The trouble had started when he abandoned the Protestant faith and became a Roman Catholic. His consort, a daughter of George II of England, was so outraged that she had packed her belongings, scooped up her children from the nursery and left her husband’s roof never to return. As the Hesse family owned a great many houses she was not homeless; but any suggestion that her offspring should come into contact with their father’s pernicious ideas threw her into such hysterics that the notion was always abandoned. Supported by her father-in-law, the ruling Landgrave at that time, she sent her two sons to Copenhagen to be educated under the vigilant eye of her sister, the Queen of Denmark. The eldest boy, Prince William, struck up a friendship with his cousin, Princess Caroline, whom he wed years later when he was twenty-one. His younger brother obediently followed suit and married Caroline’s sister.

Meanwhile the old Landgrave had died and the unrepentant Catholic convert, Frederick II, moved to Cassel where he resided without family in solitary splendour. From this small capital, 120 miles north of Frankfurt, he ruled over an area fifty miles square, containing 330,000 inhabitants. As much of his territory had been ruined by the fighting in the Seven Years War, his main task was to restore prosperity. He revised the land laws, instigated a new system of weights and measures and introduced the potato, hitherto unknown in Germany. He lived very frugally in an ugly palace and attended mass twice a day, praying to God to have mercy on his soul.

His son, the Crown Prince William, was a very different kettle of fish. He was neither religious nor conscientious. He lived in a beautiful schloss at Hanau, ten miles from the centre of Frankfurt, which had been left to him by his grandfather. He had a talent for stitching and carpentry and a good eye for buying pictures. The only trait he seemed to have inherited from his father was thrift, which in middle age turned to avarice and in old age to miserliness. As a young man he cared about only two things, both odd for the times: making money and siring illegitimate children. As a bride Caroline of Denmark was a bitter disappointment. She was so repelled by the sexual act that she screamed when William approached her. However, she submitted long enough to give him three children. Not surprisingly he turned to more sensual ladies for comfort, and apparently was so potent that almost every woman he slept with became pregnant. Some biographers claim that he fathered seventy children; others set the figure as forty; the most conservative at twenty-one.

The Prince’s sexual activity did not preclude love. After fathering half a dozen bastards by a woman who has faded into oblivion, he became greatly attached to the daughter of an apothecary, Fräulein Ritter, who became his mistress in the early 1770s and bore him eight children. As she presided over his table and ran his household, he took the trouble to write to the Holy Roman Emperor to secure for their joint progeny patents of nobility; and for the lady herself the respectable title ‘Frau von Lindenthal’.

William threw himself into the business of making money with the same fervour as in procreation. He studied the investment market each day and loaned out his gold to those who could couple security with high rates of interest. Unlike the Christian burghers of Frankfurt he admired the Jews for their financial acumen and learned as much as he could from them. He was receptive to any scheme that would increase his capital. Indeed in 1765 when General von Estorff convinced him that rare coins would appreciate in value he decided to begin a collection, and he welcomed the suggestion that Mayer Amschel Rothschild be summoned to the schloss to show his wares. 

No one knows whether or not the Prince and the Jew met on this occasion. Romantic story tellers insist that William was playing chess with Estorff when Mayer was ushered into the room. The Jew stood watching the game in silence. Suddenly His Highness looked up. ‘Do you know anything of chess?’ Mayer pointed to the board. ‘Perhaps if Your Highness moved this piece …’ Defeat, of course, was turned to victory and William congratulated the general on sending him ‘no fool’.

Although some biographers scoff at the account, arguing that it was most unlikely that a Jewish pedlar would be admitted into the presence of a prince, it seems equally unlikely that such a keen bargainer as William would allow his underlings to buy coins for him. Whatever the truth of the matter two facts are clear: Mayer Amschel sold coins to the Prince for the next four years at ridiculously low prices, and in 1769 claimed his reward by submitting to his ‘lofty Princely Serenity’ a humble petition ‘for the advantage of being appointed Crown Agent to the Prince of Hesse-Hanau’.

I am making so bold as to beg for this with more confidence in the assurance that by so doing, I am not giving any trouble; while for my part such a distinction would lift up my commercial standing and be of help to me in so many other ways that I feel certain thereby to make my way and fortune in the city of Frankfurt.[2]

Mayer was not asking an outrageous favour. The designation merely signified that the merchant had done business with the royalty in question; and that the royalty was willing to advertise the fact. It corresponded to the modem practice of displaying a coat-of-arms with the fiction: ‘By special appointment’. And yet, because it was not automatic, it was an honour.

Although Mayer showed a certain amount of effrontery in pushing his claim on the basis of having sold a few coins to His Serene Highness, his extreme candour was refreshing. Moreover he knew his Prince; and his Prince clearly intended to continue to snap up coins at bargain prices, as the request was granted. Mayer celebrated the news by investing in wig and pigtail, donning a three-cornered hat and pinning a lace jabot under his coat front. He was right to array himself as splendidly as possible for he was the first Jew to tack the Crown Agent’s sign on the front of his house, and the event created a stir in the ghetto. Not only were the neighbours impressed but the Rothschild’s landlord suddenly relented and allowed Mayer to buy the freehold of the House of the Saucepan, something he had been trying to do for seven years. Most important of all, Wolf Schnapper, a well-to-do merchant who lived in the Judengasse, decided that he could fare worse than have Mayer Amschel for a son-in-law. Mayer was courting Wolf’s shrewd, bright-eyed, seventeen-year-old daughter, Gutle. The father gave the couple his blessing and the marriage took place in 1770. Mayer’s two brothers moved into another house, and he used the space to set up a money exchange bureau in one of the bedrooms. He also had an antique coin catalogue printed which, in his new capacity as Crown Agent, he sent to all the most illustrious gentlemen in the neighbourhood, including Goethe’s patron, Duke Carl August von Weimar, who apparently showed no interest.

*

Yet Mayer Rothschild had no intention of remaining an antique dealer all his life. He was an odd mixture of the philosopher and the entrepreneur, a perfect reflection of the two strains that ran through the ghetto. Because of his coin collection he had acquired an impressive knowledge of the customs of ancient times and liked to discuss the medieval world with his erudite neighbours. Yet he was anything but a cultivated man. The moment he opened his mouth he branded himself as an uneducated ignoramus. Three years at school had not taught him to master the German language; not only was he unable to write it, but he could not speak it correctly. He talked in a comical mixture of Yiddish-Deutsch, the dialect of the ghetto.

Apparently he was not troubled by these deficiencies for he had a gentle, courtly way about him that pleased and charmed his betters. His ambition was to make money, and his immediate aim to persuade the vastly rich William of Hanau to give him some business. Banking was in such an elementary state that men of property had to pay high commissions for the management of their cash incomes. Loaning out money often meant physically dispatching bullion to the borrower; collecting interest literally meant collecting the coin and bringing it to the lender.

Prince William employed a number of people to look after his affairs, including two old-established firms, the Bethmann Brothers and Ruppell and Harnier, as well as half-a-dozen Jewish middle-men who received generous commissions for their trouble. Yet although Mayer courted His Serene Highness year after year, selling his coins at ridiculously low prices, the Prince was satisfied that his investments were well handled and refused to employ newcomers.

So Mayer Amschel jogged along selling cloth and tobacco and wine, running his Wechselstube and hoping that the future would bring him a windfall of royal florins. Nevertheless, he earned a comfortable livelihood, something in the region of £4 a week, the same income that the prosperous Goethe family enjoyed. Encouraged by affluence, the Rothschilds produced a torrent of children in the 1770s, many of whom died. The survivors of this decade consisted of a daughter and three sons, Amschel, Salomon and Nathan; in the 1780s three more daughters and a son, Carl; and in the 1790s a daughter and a son, James.[3]

Meanwhile His Serene Highness, William of Hanau, and his father, the Landgrave, were busy carving out a fantastic new fortune for themselves. Ever since the beginning of the century the rulers of Hesse-Cassel had hired out Hessian soldiers to the highest bidder. The Duke of Marlborough had been a customer; also Frederick the Great during the War of the Austrian Succession. Even in the Seven Years War the old Landgrave, William VIII (Frederick’s father and William’s grandfather) had struck an amazing bargain with George II of England. His Britannic Majesty hired a regiment of Hessians whom he lent to the Duke of Brunswick, who, in turn, employed them to defend their Hessian villages against the French. The Landgrave could compliment himself, for it was not everyone who managed to make someone else pay for the defence of one’s own hearth and home.

As George in’s North American subjects began to make trouble in the 1770s more than one German prince smelled a chance of gain. According to Burke the sky above the British Treasury was alive with royal vultures; but no family struck such a fantastic bargain as the Hesse-Cassels, who were more experienced than anyone in ‘trafficking in valour’. The new Landgrave, the Catholic Frederick II, managed to conscript an army of seventeen thousand men which meant that one out of every three able-bodied youths were forced to join the colours. Thousands tried to escape impressment by fleeing to neighbouring states, but the princes prided themselves on solidarity and kept their eyes open for ‘deserters’ who were put in irons and quickly sent back to their rightful kingdoms.

Even Prince William managed to scrape up an army of two thousand men in tiny Hanau. He drilled the soldiers himself and was known as a stickler for shining buttons and boots. He insisted that the officers’ pigtails should be of uniform length and frequently went down the lines on the parade ground with a measuring tape in his hands.

Although Hessian soldiers were not in the least extraordinary the Landgrave made history by driving the hardest bargain ever known for mercenaries with the British Government. He induced London to sign what he called ‘a subsidy contract’; apart from a guaranteed flat sum, an extra fee was payable for each man wounded, and still another for each man killed. Furthermore the contract would not cease when the fighting stopped, but only when the Hessians had been back in Germany for at least twelve months. Altogether he was believed to have netted £5,000,000 from these arrangements. Indeed, huge sums of money were still flowing into his treasury in 1785, when he had a heart attack at his midday meal and died an hour later. Upon reading his father’s will William learned to his great joy that he was the richest prince in Europe, with an inheritance in the vicinity of forty or fifty million thalers (between £8,000,000 and £10,000,000), an almost unheard of sum for the times. The Prince moved his court, his officials, his mistresses and bastards from Hanau to Cassel; and because he was short of space commissioned an Italian architect to present him with plans for a fine new palace.

*

The same year that Prince William moved to Cassel, Mayer Amschel Rothschild moved from the Saucepan to the House of the Green Shield. This new dwelling was a semi-detached residence, one half of which was occupied by the Schiff family, who had taken their name from the gay little boat painted on a sign over their door. Their descendants were destined to become distinguished American bankers who do business with the Rothschilds to this day.

As the ghetto was fiercely overcrowded it was a miracle that any house had become available and the Rothschilds regarded it as a direct portent of the Lord’s favour. The new residence was not as damp as the Saucepan and had the rare advantage of possessing a pump. It was a three-storied house, narrow and dark, and almost unbearably small for a family which eventually consisted of five girls and five boys. All ten children had to share one bedroom, for apart from the sitting room, known as the Green Room because of the colour of the upholstery, there were only three rooms. One was occupied by the Rothschild parents, and one used as a money exchange bureau, the first Rothschild bank.

The great asset of the house was its much cherished terrace looking on to the back yard. As Jews were not allowed to set foot in the Frankfurt public gardens, the family could sit out of doors in the fine weather, Gutle sewing, Mayer talking about the carefully tended pots of flowers. Here under the ghetto stars they celebrated the Feast of the Tabernacles which must not be held under a roof.

The house had other excitements. Every time the front door opened a bell clanged, a feature introduced some years earlier when pogroms were frequent and even the police could be unfriendly. The wooden stairs creaked and every passage had hidden shelves and cupboards built to overcome the shortage of space. Across the back yard was a shed which covered nine square feet where the girls played house. When the children grew older Mayer Amschel turned the shed into a counting house. It contained a large iron chest which was so cunningly contrived that it would open only if the lid was lifted from the back near the hinges. The chest itself was a decoy, covering a trap door which led to an underground room quite separate from the cellar. Here Mayer Amschel kept his money and account books. In 1785 he could not know how precious his hiding place would prove to be in twenty years’ time.

The Rothschilds had no secrets from their children. Crowded together, life might have been intolerable; instead it was an adventure, for from their earliest days they were part of the family struggle. Mayer Amschel imbued everything he touched with a sense of urgency; for others success might mean fame or luxury but for them it would open doors to a new world. Solidarity was what mattered. As a member of a persecuted race he saw life as a challenge, not to the individual but to the whole. ‘All the brothers shall stand together,’ he taught them, ‘all shall be responsible for the action of each one.’

Both Mayer and Gutle were deeply religious. Like other orthodox married women, Gutle cut off her hair and covered her head with a large wig on which she placed an even larger bonnet. At night Mayer took down the Talmud and hummed the sacred words while Gutle sewed and commanded the restless boys to listen. The young Rothschilds showed little taste for philosophy. Their attention wandered from a finely spun casuistical argument; only in the market place did their eyes come alive.

Like their father they rebelled against school, and Mayer allowed each to enter the family business at the ripe age of twelve. Trading seemed to be in their blood for they could calculate before they could read, and their lives revolved around the maxim: buy cheaply, sell dearly.

The boys pursued their objectives with exhausting concentration, no doubt derived from the example of Mayer Amschel’s dogged persistence with William of Hesse. For twenty years Mayer had tried in vain to capture a trickle of the Prince’s mighty flow of business. When the latter became Landgrave in 1785, and moved north, it would not have been odd if Mayer, now a well-to-do merchant, had washed his hands of the whole unsatisfactory affair. Instead, in 1787 he made the long trip to Cassel to keep in touch with the court.

As usual Mayer sold the Prince antiques; but far from usual was the important new friend he acquired. Although William’s wife, poor Caroline of Denmark, lived in the palace with her three children, William’s mistress, Frau von Lindenthal, was also present with her eight children. These noisy little bastards, ranging in ages from fifteen to three, were tutored by a schoolmaster, Buderus; and Mayer learned that the man’s son, young Carl Buderus, was the rising star of the Landgrave’s treasury.

Apparently Carl had come to Prince William’s attention two years earlier when he had pointed out that His Serene Highness’ milk profit would be increased if he would cease to omit the fractions in his dairy accounts. As the Landgrave was becoming increasingly penurious, counting and recounting his money, and working for hours with paper and pencil figuring out rates of interest, Carl’s scheme had thrown him into rhapsodies of delight. He not only promoted Carl over the heads of older men but he put him in charge of his private purse. The following year, when the Prince was complaining about the cost of his many offspring, Buderus suggested a Salt tax. This innovation not only proved an easy tax to administer but brought in so much revenue that after the children’s requirements were met he had a delightful surplus. Buderus again was promoted and now was serving as the Landgrave’s chief financial adviser.

Carl was amiable, serious and ambitious, not unlike Mayer Amschel himself. The two men seemed to understand each other at once. Mayer presented Carl with a rare and expensive coin as a gift and murmured that he would give him a cut of the profits if he succeeded in persuading His Serene Highness to favour the Rothschilds with some of his business … Nothing happened until 1789 when Mayer paid a second visit to Cassel. Suddenly Buderus’ influence made itself felt and Mayer was given £800 of bills to discount for the Landgrave.

*

Was this tiny episode the start of the Rothschild fortune? Or was it the momentous event of the French Revolution, which shattered the calm of Europe that same year, 1789? No one could know that the curtain was rising on twenty-five years of war, and that the war would create acute shortages which the Rothschilds would be in a unique position to exploit both for themselves and the Landgrave. As usual infant opportunity seemed to be the child of coincidence.

Yet for many, 1790 appeared to herald the end of the world. Prince William’s court was crowded with French refugees who could talk of nothing but the Terror. The Landgrave became so fearful that the disease might prove contagious that he could not sleep at night. Envisaging a mob storming his palace and stealing his gold, he decided to delay no further in investing his money in bricks and mortar, much more difficult to displace. He accepted the plans of his Italian architect and commissioned a stupendous new palace on the scale of Versailles. The residence was called Wilhelmshöhe; and although some people said it was too heavy to be beautiful, it was set in a wonderful park, where it stands to this day.

The building took place during the tumultuous years from 1791 to 1798. Indeed, the troubled times seemed to begin as workmen walked on to the site, for in the summer of 1791 the Holy Roman Emperor, Leopold II, followed ministerial advice and met Frederick William II of Prussia to discuss what military action they could take against revolutionary France. ‘If the cabinets of foreign courts try to stir up a war of Kings against France,’ angrily cried the revolutionary Foreign Minister in Paris, ‘we will stir up for them a war of the peoples against the Kings.’ 

Nevertheless Austria and Prussia took the field against the French in 1792; and for once the Landgrave pledged his wholehearted support. In a letter to the Archduke Francis of Austria he observed that anyone ‘blest by God with any possessions … must realize … that the war is a universal war declared upon all forms of private property …’

The war was fought badly by everyone concerned. The French invasion of Belgium was a fiasco; so was the Austrian-Prussian-Brunswickian invasion of France in the Champagne area. The French general, Custine, managed to cross the Rhine and for a time occupied Frankfurt. He pasted manifestos on the walls calling on the Hessian soldiery to forsake ‘the tyrant and tiger who sold their blood in order to fill his chests’.

His Serene Highness was in Cassel, but when he learned of these developments he was so enraged that for the first and only time in his life he financed a few battalions with his own money and drove the invaders out of the city. Although he moaned about the costliness of the operation, he soon recovered what he had spent by signing a subsidy contract with Britain for eight thousand soldiers which the latter threw on to the battlefield.

Although the anti-French coalition grew in size the generalship was incredibly inept and in 1795, at the end of three years of desultory fighting, the Prussian King, a stupid blond giant very different from his uncle, Frederick the Great, left Austria in the lurch by making a separate pact with France. William of Hesse-Cassel, who had become a Prussian field-marshal, was glad to follow suit, as he found it much more lucrative to hire his soldiers to Britain than to employ them himself. The new Holy Roman Emperor, Francis II, was furious at what he regarded as a rank piece of treachery, but as he was very short of cash William managed to appease him by loaning him £120,000.

Meanwhile the Rothschild family business was expanding by leaps and bounds. By the 1790s they had half a dozen irons in the fire. Apart from their money bureau and their antiquities they acted as forwarding agents and did a good trade in wine. But the bulk of their business was importing manufactured articles from England, mainly cloth, for re-sale. As the wars continued and the continent became increasingly starved of essential goods, people showed their willingness to pay famine prices. Mayer Amschel doubled and tripled both his orders and his charges and profits soared.

At this point Mayer made a proposition to the enterprising Carl Buderus. England was paying the Landgrave large sums of money for the hire of Hessian soldiers; and the Rothschilds were paying England large sums of money for the goods they were importing. Why not let the two-way movement cancel itself out, and pocket the commissions both ways on the bills of exchange? Buderus agreed, and soon this extra string to the Rothschild bow was producing an impressive revenue.

Indeed every ill wind of the 1790s seemed to blow good to the Rothschilds. When the French invaded the Netherlands in 1795 and brought the Amsterdam Bourse to a close, every Frankfurt financier benefited, including Mayer Amschel; and when the French tried to cut off the Austrian army by bombarding Frankfurt, the Jews were freed from the ghetto. Over 150 houses on the Judengasse were destroyed, which gave the Christian burghers no alternative but to allow the Jewish population to live in the main part of the city. Mayer Amschel was quick to take advantage of the relaxation by renting warehouses and filling them with English imports.

When the 1790s drew to a close the Rothschilds had become rich and independent. The change had taken place in six short years. Until 1794 the family property had been assessed for twenty years at the constant figure of 2000 gulden a year (about £170). Mayer had paid annual taxes amounting to twenty-seven English shillings. Suddenly in 1795 — the year that Holland fell — the amount was doubled; and in the following year the family was placed in the highest category of those earning 15,000 gulden or above. This figure shrouded a fortune for by 1800 Mayer’s capital lay in the region of £13,000, making his the eleventh richest family in the ghetto, and far richer than most of the Christian burghers who still smugly patronized them.[4]

Yet the tide had only begun to flow in the Rothschild favour. In 1798 a quarrel took place which must rank as the luckiest altercation in the family’s history. If an important Lancashire cotton manufacturer had not annoyed Mayer’s third son, the red-headed, hot-tempered, twenty-one-year-old Nathan, the Rothschilds might never have sprung into world prominence. As Germany was entirely dependent on Britain for its cotton goods, English travelling salesmen were often bad-mannered and arrogant. ‘One great trader came to Frankfurt who had the market all to himself’, Nathan explained years later. ‘He was quite the great man, and did us a favour if he sold us goods. Somehow I offended him and he refused to show me his patterns. This was on a Tuesday, I said to my father: “I will go to England” … On the Thursday I started.’[5]

Nathan arrived in Manchester with a few letters of introduction and not a word of English. But he had something even more valuable: at least £10,000 in cash and the promise from his father that if he did well he would send him even more capital. Mayer regarded Nathan as the cleverest of his sons. If anyone could buy shrewdly it would be Nathan, although at the moment not much discrimination was necessary as the continent was so starved of goods that almost anything from England fetched a high price.

*

Despite the sellers’ market, Mayer Amschel and the Landgrave of Hesse, both in their fifty-seventh year, knew that their future prosperity depended on events outside their control. As the year 1800 slid into being, the name of the newly-created French First Consul, Napoleon Bonaparte, rang through Europe. The two men watched the march of events with fervid attention for the new decade, like the old, was bound to drag them in its rough political wake, and each nursed a deep concern; the Prince had a fortune to keep and the Jew a fortune to make.

‘As long as I am alive France shall have peace,’ Bonaparte told his ecstatic countrymen; yet within a few months France once again was at war with Austria. ‘Between old monarchies and a young republic the spirit of hostility must always exist,’ Bonaparte explained with a charming lack of embarrassment. ‘… I believe that, while I fill my present office, my destiny is to be fighting almost continually.’

Austria, however, was too exhausted to oblige him for long, and a year later signed the humiliating peace of Luneville which not only recognized Napoleon as the master of Italy and the Low Countries, but acknowledged his ownership of all German territory on the left bank of the Rhine. In order to placate the dispossessed German princes the First Consul announced that he would recompense them at the expense of the Church. William of Hesse-Cassel was one of the many Serene Highnesses who travelled to Paris for the ‘Great Auction’ at which Napoleon wielded the hammer. He returned to Germany with a large slice of Mainz in his pocket and the title ‘Elector’ which he had always wanted.

Yet William of Hesse was still unwilling to knuckle under to the Corsican upstart. He had no wish to alienate England with whom he did a roaring trade in soldiers, and where he had over £500,000 invested in securities and another £100,000 on loan to the Prince of Wales and the Dukes of York and Clarence. Furthermore, he was deeply impressed by the way in which Britain demonstrated the superiority of sea power.

Such an instance took place in 1802 when Napoleon inveigled Russia, Prussia, Sweden and Denmark into signing a pact of ‘armed neutrality’, directed against England. The British Admiralty sent a fleet into the Baltic and shattered the alliance in a single afternoon. The ships attacked the Danish flotilla which lay in Copenhagen harbour protected by seven hundred guns. The engagement was so fierce and bloody that the English Admiralty finally gave the order to ‘discontinue the action’; but the second in command, Horatio Nelson, turned his blind eye to his telescope and sent out a signal, ‘Engage more closely.’ Although the British lost 943 men, the Danes suffered casualties of over 1,700 and had the humiliation of seeing many of their ships towed away to England.

The Danish King, a brother-in-law of William of Hesse-Cassel, felt himself badly used for he could not see why the British had picked on him rather than the Prussians or the Swedes. Danish bonds fell in value; and the King’s private funds shrank so dramatically that his bankers put out feelers for a loan. But although the Elector of Hesse-Cassel had plenty of money he told Buderus that he was unwilling to lend it to his in-laws as he did not want them to know how rich he was.

Buderus repeated the story to Mayer Amschel who proposed lending the money anonymously. The Elector was delighted with this cunning suggestion and on Buderus’ recommendation appointed two middlemen: Rothschild and a Hamburg Jew named Lawaertz. The latter made the approach to Copenhagen. ‘The lender’, he wrote, ‘is an exceedingly rich capitalist and exceptionally friendly to the Danish Court. It is possible that in the future even greater sums and better conditions may be obtainable from him.’ The loan was concluded in September 1803 with instructions that the interest should be paid regularly to Rothschild.

After thirty-six years of persistence Mayer Amschel had done a major piece of business for the Prince. Although the transaction remained secret for many months, eventually he was allowed to alter his Crown Agent sign to read ‘Hesse-Cassel’ in place of ‘Hesse-Hanau’. Mayer recognized, of course, that Buderus was responsible for his good fortune and now offered to make him a secret partner in his business. Carl was delighted. Not only did he like and trust Rothschild but he was only too well aware that he would never grow rich if he relied solely on his salary from the miserly Elector. It was good business on Rothschild’s part for during the next three years the Elector made a further six loans to Denmark all of which were handled by Mayer.

Although Prince William paid the commissions promptly he was not an easy man to serve. The artistic impulses and intellectual curiosity of his youth had given way to a neurotic and querulous old age. He could think and talk of nothing but protecting his vast fortune against the uncertainties of war. He was safe while Napoleon was preoccupied in organizing a camp at Boulogne, in building two thousand barges and threatening the British. ‘I do not say,’ airily pronounced Britain’s First Lord of the Admiralty, ‘that the French cannot come. I merely say that they cannot come by water.’ Apparently the First Consul finally reached the same conclusion for he turned his attention back to the continent; and among those on whom his glance fell was the fabulously rich Elector of Hesse-Cassel.

His Serene Highness squirmed, for he had hoped to remain unnoticed until the winning side had emerged so clearly that he could join it with impunity. Napoleon, however, was eager to enlist the opulent Prince as an ally, and asked him whether he would like to buy a slice of English Hanover. William politely declined, and Bonaparte then invited him to join the Union of Princes who were meeting at Mainz to discuss a Federation of the Rhine. Once again the Prince refused, this time pleading an attack of gout. ‘On n’oublie pas,’ the French ambassador observed menacingly, pointing out that history was favouring France. The prophecy seemed alarmingly accurate for in 1804 Napoleon proclaimed himself Emperor of the French; and Francis II, well aware that Napoleon’s next move would be to supplant him as Holy Roman Emperor, gracefully relinquished the title, assuming the more modest appellation of Francis I, Emperor of Austria.

Poor William was caught in a cleft stick, for while he was being coerced by France, France’s enemies were offering him inducements to join an anti-Napoleon coalition; the bait was a subsidy of £1,250,000 for every hundred thousand men put in the field. As Hesse-Cassel could raise an army of twenty thousand, it would mean a cool quarter of a million pounds in the Prince’s pocket.

The fact that he was too frightened to accept this tantalizing offer made William more irritable than ever. Even his mistress of thirty years, Frau von Lindenthal, could not stand his bad temper any longer, and ran off with a subaltern half her age. William consoled himself with a young Russian beauty, Caroline von Schlotheim, who tried to soothe him as he strode through his great palace, locking and unlocking the doors that led to his hundreds of treasure chests.

The trunks took up one whole wing of the palace and contained everything from jewels to objets d’art, from silver to pictures, from mortgage documents to porcelain. Half belonged to the Prince; the other half to borrowers who had been obliged to put up collateral. Apart from this he had some ten million thalers (about £1,800,000) in cash or bills of exchange.

In 1805 Mayer Amschel instructed his eldest son, thirty-two-year-old Amschel, to remain in Cassel so as to be on hand in case the Elector had any sudden business impulses. But William was not in a fit state to think clearly. He inveighed against the forces that threatened his property; and when Austria, along with Russia, joined the anti-French coalition, and announced that as she was short of bullion in future she would pay interest on loans in paper rather than specie, the Prince became hysterical. He wrote to Emperor Francis II reminding him of his loan of £120,000 and begging him to make an exception in his case. The Austrian ambassador, von Wessenberg, advised the sovereign to try and pacify him as His Majesty might want to borrow more money. ‘Since avarice is the Elector’s greatest weakness,’ he counselled Francis, ‘to grant Frau van Schlotheim the title of Countess without payment might be the best way of quietening him.’ The Emperor acted accordingly but the Elector continued to rant and rave against his cruel fate.

Carl Buderus and Mayer Rothschild begged the Prince to loan out more of his money, arguing that it was safer outside the country than stored at Wilhelmshöhe. The Elector did not agree. Already half the crowned heads of Europe were in his debt, as well as scores of petty rulers. Altogether he had some thirty million thalers (c. £6,000,000) out on loan — not to mention the pounds sterling in England — and he insisted that this sum already was much too large for complacency. Furthermore he was not sure that he wanted Mayer to handle any more of his business. The Bethmann brothers and Ruppell and Harnier had discovered that the ‘ghetto firm’, as they called the Rothschilds, had ousted them from their profitable trade. Ruppell and Harnier had started a whispering campaign against old Mayer and the Elector was inclined to believe what was being said. Buderus, of course, did his best to dispel the malicious talk but William stubbornly clung to his own notions.

The truth was that His Serene Highness was so harassed by the turn the war was taking that it was difficult to talk to him at all. He clung to the hope that Russia and Austria might deliver a mighty blow to Napoleon’s Grand Army. Not only would such a development send the price of his English bonds soaring, but it would encourage bankers to lend to Vienna, perhaps enabling him to call in his loan from the Emperor. Unfortunately, his hopes were dashed, for Napoleon attacked the Austrians at Ulm before the Russians had time to come to their assistance, and the Russians at Austerlitz before the Prussians made up their mind to join the coalition.

The guns of Austerlitz blew the anti-Bonaparte coalition to pieces. The Russians made their way home; the Austrians sued for peace; even Britain felt the blow. ‘I, too, was hit at Austerlitz,’ murmured William Pitt before he died. Napoleon stripped Austria of the German Empire and established a German Confederation of the Rhine, composed of sixteen reigning kings and princes, with himself as Protector.

Too late Prussia saw the danger and began to prepare for war, frantically trying to draw to her side her traditional ally, Hesse-Cassel. But William was so overwrought that not even his Countess could comfort him. First he plastered his principality with signs saying ‘Pays Neutre’. Then he behaved like a lunatic in trying to ingratiate himself with both sides. He got in touch with the French Government and asked to be assigned the city of Frankfurt in exchange for his neutrality; at the same time he wrote to the Prussian King declining to be his ally but offering to hire him twenty thousand Hessian soldiers for the quarter of a million pounds he had itched to accept the year before. When his offer was accepted he argued that this piece of business in no way infringed his neutrality. Unfortunately both Prussians and Hessians were routed by Napoleon at Jena, then at Auerstadt. In October 1806 Bonaparte entered Berlin in triumph. When he visited the tomb of Frederick the Great with his aides-de-camp he said: ‘Hats off, gentlemen — if he were still alive we should not be here.’

The French Emperor then turned his attention to the Elector of Hesse-Cassel; and by doing so unwittingly opened Aladdin’s Cave to the Rothschilds.