Original subtitles

Now let's take a look at the role of the Rothschild family, the family said to

be the wealthiest in the world.

Money is the god of our time, and Rothschild is his prophet,

Heinrich Heine.

The mythology surrounding the Rothschilds' wealth and power is two

old.

The resulting mythology has proved almost as long -lived as the firm of N

Rothschild and Sons itself.

Ever since the second decade of the 19th century, there has been speculation

about the origins and extent of the family's wealth, about their political

influence, not only in the five countries where there were Rothschild

but throughout the world, about their Judaism.

The five Rothschild houses constitute an early version of what later became

known as the multinational.

Perhaps the most important point to grasp about this multinational

is that for most of the century between 1815 and 1914, it was easily the biggest

bank in the world.

Strictly in terms of their combined capital, the Rothschilds were in a

their own until, at the earliest, the 1880s.

The 20th century has no equivalent.

Because they were so rich, the Rothschilds could plainly claim a

equivalence with the European aristocracy.

They relished the sense that they were sans pare.

In this sense, phrases like kings of the Jews, which contemporaries applied to

them, contained an important element of truth.

That was exactly the way the Rothschilds saw and conducted themselves.

There are no fewer than 153 species or subspecies of insect which bear the name

Rothschild, as well as 58 birds, 18 mammals, and 14 plants, including a rare

slipper orchid, Paphiopedilum rothschildianum, to say nothing of three

three spiders, and two reptiles.

The family's almost equally recurrent enthusiasm for the pleasures of the

has also bestowed the name on a souffle and a savory, prawns, cognac, and

gruyere on toast.

There are towns and numerous streets named after members of the family in

Israel, Rothschild -owned vineyards at Mouton and Lafitte whose wines are drunk

the world over, numerous Rothschild -built houses from the Vale of Aylesbury

the Riviera, and there is even a Rothschild Island in the Antarctic.

At the same time, the Rothschilds energetically pursued and acquired

decorations, titles, and other honors.

securing the ultimate prize, an English peerage, in 1885.

The third generation also threw themselves into hunting and horse

quintessentially aristocratic pastimes.

They also extended their patronage to include writers, Benjamin Disraeli,

de Balzac, and Heinrich Heine, musicians, notably Frédéric Chopin and

Rossini, as well as architects and artists.

In more ways than one, they were the 19th century's Medici's.

From the very earliest days, the Rothschilds appreciated the importance

proximity to politicians, the men who determined not only the extent of budget

deficits, but also the domestic and foreign policies which so influenced the

financial markets.

And politicians soon came to realize the importance of proximity to the

Rothschilds. who at times seemed indispensable to the solvency of the

politicians governed, and who could always be relied upon to provide up -to

-minute political news.

When the former de Rothschild frère director, Georges Pompidou, became prime

minister in April 1962, and later president in 1969,

Le Canard Enchaîné commented simply, RF equals République Française

equals Rothschild frère.

Similar echoes can be found in the British press, too.

Inferences were sometimes drawn in the 1980s from the fact that a number of

conservative politicians had worked for N .M. Rothschild and Sons Limited,

either before or after their political careers, at a time when the firm was

handling a number of important privatizations.

In the 1880s and 1890s, their advice on imperial matters was sought by both the

Marquess of Salisbury and the Earl of Rosebury.

Gladstone's successor as liberal prime minister.

Indeed, Roseberry was married to a Rothschild, Byers' daughter Hannah.

Rothschild influence extended to royalty as well.

It is extraordinary to find that the family's interests in the financial

of King George IV predated his accession to the throne by as much as 15 years.

How did Meyer Amschel, then the father of an obscure Manchester textile

merchant, come to acquire a bill on the Prince Regent?

The likeliest answer is that he bought it from the elector of Hesse Castle, who

had made a number of loans to the sons of George III in the 1790s.

Ten years later, with Nathan firmly established as a banker in London, the

of Meyer Amschel turned to these other royal debts with the intention of making

Nathan

in Amschel's somewhat old -fashioned phrase, court banker in England.

Nor was George IV the only member of the British royal family to whom Nathan

lent money in the 1820s.

In 1824, for example, he lent 10 ,000 pounds to the Duke of York, as well as

giving him 100 complementary shares in the Alliance Assurance Company.

The Rothschilds also looked ahead to the next generation.

In 1816, the only child of the Prince Regent, Princess Charlotte, was

to a minor German prince, Leopold of Saxe -Coburg, the youngest son of Duke

Francis Frederick.

The brothers at once recognized Leopold's potential importance.

Not for nothing did one Rothschild writer of the 1840s point out the

between the house of Rothschild and the house of Saxe -Coburg -Gotha.

Those two extended German families which were to rise from obscurity to glory in

the course of the 19th century.

Indeed, theirs was to be an almost symbiotic relationship.

The 3 .5 million gulden lent to the Saxe -Coburgs by the Frankfurt House between

1837 and 1842 was only one aspect of the connection.

Of greater importance was the support which the Rothschilds gave to those

members of the family who left Coburg in search of new thrones elsewhere.

Not that the Rothschilds lost interest in the question of the British

following Princess Charlotte's death.

When the Prince Regent's brother, the Duke of Kent, set off for Germany to

Victoria of Saxe -Coburg, he took with him a letter of credit on the Frankfurt

Rothschilds. When the marriage produced a daughter, Victoria, who at once became

next in line to the throne, Nathan hastened to offer the proud father

advice and his exclusive messenger service.

Nathan's sons continued to act as the Duchess's banker after the Duke's death,

relaying money to her brother, Ferdinand of Saxe -Coburg.

These tenuous links were enhanced by careful cultivation of Leopold of Saxe

-Coburg. who later became King Leopold I of the Belgians.

Nor was his nephew Albert above turning to the Rothschilds for financial

assistance after he became Queen Victoria's prince consort.

In turn, Victoria and Albert's eldest son was on friendly terms with many

members of the family before and after he succeeded his mother as Edward VII.

The list of Victorian politicians who were close to the Rothschilds is a long

one. Lionel's campaign for admission to the House of Commons in the late 1840s

and 1850s enjoyed support from Whigs like Lord John Russell and Peelites like

Gladstone, but also protectionist Tories like Disraeli and Lord George Bentinck.

They were attracted not only to Disraeli, but also to Lord Randolph

Joseph Chamberlain, and Arthur Balfour.

Even as late as the first decade of the 20th century, the system of partnerships

continued to function in such a way that English Rothschilds had a financial

stake in the Paris house and French Rothschilds a stake in the London house.

The history of the Rothschilds also helps to illuminate the long -running

differences between British, French, and German banking, for the obvious reason

that the various Rothschild houses worked in similar, though not identical,

in each country.

In addition to the inevitable web of credits and debits with other firms

arose from these activities, the Rothschilds also offered to a select

customers, usually royal and aristocratic individuals whom they

cultivate, a range of personal banking services, ranging from large personal

loans, as in the case of the Austrian Chancellor Prince Metternich, to a first

-class private postal service, as in the case of Queen Victoria.

And the Rothschilds were also major industrial investors, an aspect of their

business which has often been underestimated.

When the development of railways raised the possibility of transforming Europe's

transport system in the 1830s and 1840s, the Rothschilds were among the leading

financial backers of lines, beginning in France, Austria, and Germany.

Indeed, by the 1860s, James de Rothschild had built up something like a

-European railway network.

extending northwards from France to Belgium, southwards to Spain, and

to Germany, Switzerland, Austria, and Italy.

From an early stage, the Rothschilds also had major mining interests,

in the 1830s with their acquisition of the Spanish mercury mines of Almaden and

expanding dramatically in the 1880s and 1890s when they invested in mines

producing gold, copper, diamonds, rubies, and oil.

Like their original financial business, this was an authentically global

operation extending from South Africa to Burma, from Montana to Baku.

Unlike modern multinationals, however, this was always a family firm, with

executive decision -making strictly monopolized by the partners, who, until

1960, were exclusively drawn from the ranks of male Rothschilds.

There are numerous apocryphal business maxims attributed to the Rothschilds.

For example, to hold a third of one's wealth in securities, a third in real

estate, and a third in jewels and artworks.

To treat the stock exchange like a cold shower, quick in, quick out.

Or to leave the last 10 % to someone else.

The economic history of capitalism is therefore incomplete until some attempt

has been made to explain how the Rothschilds became so phenomenally rich.

All 19th century states ran budget deficits and some almost always did.

And it was war and the preparation for war which generally precipitated the

biggest increases in expenditure.

For it was by lending to governments or by speculating in existing government

bonds that the Rothschilds made a very large part of their colossal fortune.

The answer lies in the way these investments were carried out.

Only a few years previously, Meyer Amschel had been arranging payments of

620 ,000 gulden from the elector to Austria to pay for troops and horses in

1809 campaign against France.

Shortly after Meyer Amschel's death, his son Amschel was advancing 255 ,000

gulden to purchase horses for the French army.

He simply backed both sides.

Such a strategy has obvious attractions, and it was to become a frequent

Rothschild gambit in the decades ahead.

Amschel was only half -joking when he wrote, urging Solomon, Do your stuff.

Make the Frankfurt house richer by a million francs, the Paris house richer

million louis d 'or, and the London house richer by a million pounds, and

be awarded the Order of the Grande Armée.

Such transactions probably accounted for the lion's share of the profits the

Rothschilds made in this decisive period.

In June 1814, Harris listed the payments they had so far made to Prussia,

Austria, the French King, and the British Army.

Including money that had not yet been disbursed, the total was 12 .6 million

francs. More was to come.

By now, the markets were tending to follow the Rothschild lead.

As Carl noted, When we buy, everybody buys.

This reflected the widespread belief that the Rothschilds were acting on

of the English government and that this was being done in order to force the

rate of the pound sterling up and that we succeeded very well in doing so.

But now, let's return to Napoleon.

Because nothing else in history more aptly demonstrates the ingenuity of the

Rothschild family than their control of the British stock market after Waterloo.

In 1815, a year after the end of the War of 1812 in America, Napoleon escaped

his exile and returned to Paris.

Just as the brothers appeared to be losing the peace, Bonaparte's Hundred

plunged Europe back into war.

restoring the financial conditions in which the Rothschilds had hitherto

thrived.

This time, not only Russia and Prussia, but the previously aloof Austrians found

they had little option but to accept payment from the Rothschilds, as did a

gaggle of other states, including Saxony, Baden, Württemberg, Bavaria, Sax

Weimar, Hesse, Denmark, and Sardinia.

Altogether, Harris' account with Nathan in 1815.

amounted to £9 ,789 ,778.

In this, the Rothschilds had invaluable accomplices in the Allied powers

themselves, who naturally wished to pocket as much as they could before

was signed and the subsidies ceased.

As their father had taught them, the brothers were always careful to make

terms attractive not only to governments, but also to the individual

with whom they were negotiating.

That Nathan profited from the dramatic events of 1815 is central to Rothschild

mythology.

By obtaining the first news of Napoleon's defeat at Waterloo, before

government itself, Nathan was able to make a huge sum of money on the stock

exchange.

This is the Waterloo battlefield about 200 miles northeast of Paris in what

today is Belgium.

Here Napoleon suffered his final defeat.

but not before thousands of French and Englishmen gave their lives on a steamy

summer day in July of 1815.

The outcome was certainly in doubt.

In fact, had Napoleon attacked a few hours earlier, he would probably have

the battle.

Rothschild stationed a trusted agent, a man named Rothworth, on the north side

of the battlefield, closer to the English Channel.

Once the battle had been decided, Rothworth took off for the challenge.

He delivered the news to Nathan Rothschild a full 24 hours before

own courier.

If Wellington had been defeated and Napoleon was loose on the continent

Britain's financial situation would become grave indeed.

You've lost your luck.

Sir.

Sir.

Sir.

Look at Rothstein.

You think he was selling apples instead of government bonds?

That's an hour fifty -three.

All right.

I'll keep on selling that kind of stuff.

You're creating something like a panic on the exchange, sir.

I know.

Other nervous investors saw that Rothschild was selling.

It could only mean one thing. Napoleon must have won. Wellington must have

The market plummeted. Soon everyone was selling their consoles, their British

government bonds, and prices dropped sharply.

But then Rothschild started secretly buying up the consoles to his agents for

only a fraction of their worth hours before.

What's even more interesting about this story is that some authors claim that

the day after the Battle of Waterloo, in a matter of hours, Nathan Rothschild

came to dominate not only the bond market, but the Bank of England as well.

Whether or not the Rothschild family seized control of the Bank of England,

first privately owned central bank in a major European nation and the

wealthiest, one thing is certain. By the mid -1800s, the Rothschilds were the

richest family in the world, bar none.

They dominated the new government bond markets and branched into other banks

industrial concerns.

Like France and Britain, the Central and East European states emerged from the

war with dire financial problems which could be addressed only with the

assistance of foreign capital.

As Disraeli later put it in his novel, Coningsby, After the exhaustion of a war

of 25 years, Europe must require capital to carry on peace.

France wanted some, Austria more, Russia a little, Russia a few millions.

Moreover, the policy of the Holy Alliance was bound to greed additional

financial needs from which the Rothschilds could also profit.

For the principal aim of the Alliance was to avert a recurrence of the

revolutionary epidemic which had caused such upheaval in Europe between 1789 and

1815, if necessary by military intervention.

That implied further expenditure.

The Rothschilds were notoriously the chief ally of the Holy Alliance.

To the German writer Ludwig Werner, they were the nation's worst enemies.

They have done more than any to undermine the foundations of freedom,

unquestionable that most of the peoples of Europe would by this time be in full

possession of liberty if such men as Rothschild did not lend the autocrats

support of their capital.

Moreover, the Rothschilds were also, as Berna said, lending money to establish

Greece as an independent monarchy, which had been another liberal goal of the

1820s. Indeed, they even appeared to be in a position to influence the decision

as to which prince would become the new Greek king.

It therefore made more sense to argue that the Rothschilds were beginning to

supplant rather than merely shore up the European monarchies.

The first major post -war loan which the brothers succeeded in making was to

Prussia, which had ended the Napoleonic period with a debt burden of around 188

million thaler and continued to run large deficits in 1815, 1816, and 1817.

The size of the floating debt reached 20 million thaler by the autumn, and the

government began to contemplate raising a loan in London.

Banking, the third Lord Rothschild once remarked, consists essentially of

facilitating the movement of money from point A, where it is, to point B, where

it is needed.

All banks have histories, though not all have their histories researched and

written. Only the Rothschilds, however, have a mythology.

The world's bankers.

The Rothschilds are the wonders of modern banking.

We see the descendants of Judah, under a persecution of 2 ,000 years, peering

above kings, rising higher than emperors, and holding a whole continent

hollow of their hands.

The Rothschilds govern a Christian world.

Not a cabinet moves without their advice.

They stretch their hand with equal ease from Petersburg to Vienna, from Vienna

to Paris, from Paris to London, from London to Washington.

Baron Rothschild, the head of the house, is the true king of Judah, the prince

of the captivity, the messiah so long looked for by this extraordinary people.

He holds the keys of peace or war, blessing or cursing.

They are the brokers and counselors of the kings of Europe and of the

chiefs of America.

What more can they desire?

Niles Weekly Register, 1835 -36.

Whatever its significance for Prussian politics, the 1818 Prussian loan was

without question a watershed in the history of the European capital market,

contemporaries came to recognize.

Firstly, the loan was not to be in Toller, but in Sterling, with the

payable, half yearly, not in Berlin, but in London.

Secondly, there was to be a British -style sinking fund to ensure the

amortization of the loan.

This deliberate anglicization of a foreign loan was a new departure for the

international capital market.

Now it was much easier to invest in foreign funds.

The fact that throughout the century all foreign government bonds paid higher

yields than British consoles meant that people did.

The Times did not exaggerate when it later described Nathan as the first

introducer of foreign loans into Britain.

Moreover, the loan was issued not just in London, but also in Frankfurt,

Hamburg, Amsterdam and Vienna.

In other words, it represented a major step towards the creation of a

international bond market.

In stipulating these conditions, Nathan not only succeeded in making the

Prussian loan attractive to British and continental investors, he also

established a model for such international bond issues, which would

become standard.

In his book, On the traffic in state bonds, 1825, the German legal expert

Johann Heinrich Bender identified this as one of the Rothschilds' principal

contributions to modern economic development.

Any owner of government bonds can collect the interest at his convenience

several different places without any effort.

Henceforth, an investor could receive the interest on Austrian metallic,

Neapolitan Ront or any other Rothschild -issued bonds from any of the Rothschild

houses.

Although the terms of the loan were heavily criticized in Berlin, not least

the bankers there, Humboldt and Rother were impressed.

Rother went further.

The Rothschild in this country has an incredible influence upon all financial

affairs here in London.

It is widely stated, and is indeed close to the truth, that he entirely

regulates the rate of exchange in the city.

His power as a banker is enormous.

In an unpublished passage of The Baths of Lucca, Heine sought to analyze the

nature of the Rothschild's power more precisely.

Here he acknowledges that in the short term it served to shore up the

reactionary regimes.

Revolutions are generally triggered off by deficiency of money.

By preventing such deficiencies, the Rothschild system may serve to preserve

peace in Europe.

This system, or rather Nathan Rothschild, its inventor, is still

foundations for such peace.

It does not inhibit one state from making war on another exactly as before,

it does make it difficult for the people to overthrow established authority.

Religion is no longer able to guarantee the governments that the people will

remain peaceful.

The Rothschild system of loans can perform the task much better.

It possesses the moral force or power which religion has lost.

It can act as a surrogate for religion.

Indeed, it is a new religion. When the old religion finally goes under, it will

provide substitutes for its practical blessings.

Strangely enough, it is once again the Jews who invented this new religion.

As early as 1828, Prince Udler -Muskow, Referred to Rothschild, without whom no

power in Europe today seems able to make war.

In a multipolar world in which five powers with distinct interests sought to

resolve international crises without resorting to war, the Rothschilds acted

so much to ensure peace as to underwrite it once it had been made.

The case was put in a more sophisticated form by the left -leaning liberal J .A.

Hobson. author of the classic Imperialism, A Study, 1902.

Like many radical writers of the period, Hobson regarded the Boer War as having

been engineered by a small group of international financiers, chiefly German

origin and Jewish in race.

The Rothschilds, in his view, were central to this group.

Does anyone seriously suppose, he asked in Imperialism, That a great war could

be undertaken by any European state or any great state loan subscribed if the

House of Rothschild and its connections set their face against it?

Cherub had made much the same point from a German nationalist perspective in his

history.

The House of Rothschild has arisen from the quarrels between states, has become

great and mighty from wars, and the misfortune of states and peoples has

its fortune.

English examples can also be found.

In refusing Gladstone's request to make Lionel the Rothschild appear, Queen

Victoria explicitly questioned whether one who owes his great wealth to

contracts with foreign governments for loans or to successful speculations on

the stock exchange can fairly claim a British peerage.

A good illustration is John Reeves' book, The Rothschilds, The Financial

of Nations, which returns a typical verdict.

The Rothschilds belonged to no one nationality. They are cosmopolitan. They

belong to no party.

They were ready to grow rich at the expense of friend and foe alike.

The central dilemma which confronted the Rothschilds lay here.

Because of their wealth, other Jews looked to them for leadership in their

pursuit of equal civil and political rights.

They themselves had no desire to forsake their palatial town and country

residences for barren Palestine.

Lionel's nephew Victor struck a similar note of ambivalence when he addressed a

meeting of the Earl Baldwin Fund for Refugees. The slow murder of 600 ,000

people, he told his audience, is an act which has rarely happened in history.

Yet, he went on, in spite of humanitarian feelings, we probably all

there is something unsatisfactory in refugees encroaching on the privacy of

country. even for relatively short periods of time.

Even in 1946, speaking in the House of Lords, Victor defended the policy of

restricting immigration to Palestine.

The only logical solution was therefore to find some alternative territory for

the Jews to go to.

The Nazis themselves thought of Madagascar. At around the same time, the

House forwarded to Newcourt a proposal to purchase 200 ,000 acres of Brazil's

Mata Grosso, and another to settle Jews in Sudan's Apanal Valley.

Kenya, northern Rhodesia, and Guyana were also considered.

Only at the 11th hour, it seems, did the Rothschilds recognize the need to admit

refugees into Britain and France.

This was broadly the argument of the early Zionists like Theodor Herzl, who

to believe that the only solution to the Jewish question was indeed for the Jews

to leave Europe and found their own Judenstadt.

Herzl made a succession of attempts to win the support of the Rothschilds in

belief that they were about to liquidate their vast capital as a response to

anti -Semitic attacks.

But his 66 -page address to the Rothschild family council was never

concluded from an initial rebuff that they were vulgar, contemptuous,

egotistical people.

The Rothschilds, he later declared, were a national misfortune for the Jews.

He even threatened to liquidate them or to wage a barbaric campaign against them

if they opposed him.

If a Zionist could use such language in the 1890s, it is perhaps not surprising

that the radical anti -Semites who flourished in the defeated states of

Europe after the First World War did so too.

A good example is Dietrich Eckart's address to all working people.

of 1919.

The House of Rothschild owns 40 billion.

They only need to administer their wealth to see that it is nicely placed.

They do not need to work, at least not what we understand by work.

But who provides them and their like with such an enormous amount of money?

Who does this?

You do it. Nobody but you.

That's right, it is your money, hard -earned through care and sorrow, which

drawn as if magnetically into the coffers of these insatiable people.

Another early National Socialist who cited the Rothschilds as examples of the

Jewish problem he pledged to solve was Adolf Hitler.

In an article in the Nazi Völkischer Beobachter in May 1921, for example, he

named them as one of a group of Jewish capitalists who controlled the socialist

press.

On at least two occasions in 1922, he gave speeches in which he referred to

significant difference between the achievements of a man like Alfred Krupp,

has bequeathed an immense national achievement through his indefatigable

an innovator, and the rapacity of a Rothschild who financed wars and

and brought the peoples into interest servitude through loans.

The television preacher and Republican politician Pat Robertson's book, The New

World Order, published in 1991, states that the Rothschilds were polluted by

occultism of illuminated Freemasonry, and that Paul Warburg, architect of the

Federal Reserve System, was a Rothschild agent.

From a completely different political milieu, Khalid Muhammad, a former

assistant to Louis Farrakhan, the leader of the radical African -American

organization Nation of Islam,

has repeated the suggestion that the Rothschilds financed Hitler and aided

anti -Semitic policies.

A cursory search of the Internet reveals a plethora of conspiracy theories.

The Rothschilds arranged the murder of President Lincoln, as his post -war

policies would have wrecked their commodity speculations.

The Rothschilds financed the rise of Hitler as a bulwark against the Soviet

Union. The Rothschilds are interwoven with the Catholic Church.

and jointly with the traditional mafia and the American CIA, which was pro

-Nazi.

They are the hidden power which controls other well -known banks, such as

Warburgs, Schroders, and Lazars, as well as being behind American financiers,

such as J .P. Morgan, the Rockefellers, Kuhn, Loeb & Company, the Spires, and

the Lehmans, not to mention the Bank of England and the Federal Reserve System,

an obvious Rothschild front.

Through this network of global power, they have been responsible for, among

other things, the Boer War, the creation of Israel to control the oil of the

Middle East, the Russian Revolution, a coup on Russia by the United States

financial arm largely controlled by the Rothschilds, and even the floating of

the dollar by President Nixon.

Today, they and their associates in the Conservative Party and the press are

plotting to monopolize the world's energy supplies.

Hence their interest in electricity, coal, and gas privatization.

It might be thought that a serious banking history should scrupulously

reference to this kind of nonsense.

Yet it is impossible to appreciate the need for a scholarly history of the

subject if one blithely pretends such myths do not exist.

In 1823, the twelfth, thirteenth, and fourteenth cantos of Byron's Don Juan

published in London at a time when their author was embroiled, fatally as it

proved, in the Greek struggle for independence.

Nevertheless, these late verses indicate a keen awareness of the power of money,

and specifically of the new kind of financial power personified by Nathan

Rothschild.

Who hold the balance of the world?

asked Byron in the twelfth canto.

Who reign o 'er Congress, whether royalist or liberal, who rouse the

patriots of Spain?

Who keep the world both old and new in pain or pleasure?

Who make politics run glibber all?

The shade of Bonaparte's noble daring, Jew Rothschild and his fellow Christian

Baring.

To Byron, Rothschild and Baring were the true lords of Europe.

whose every loan is not a merely speculative hit, but seats a nation or

throne.

Republics also get involved a bit.

Columbia's stock hath holders not unknown on change, and even thy silver

Peru, must get itself discounted by a Jew.

That Byron could suggest, even satirically, that Nathan Rothschild

with Alexander Baring, the balance of the world, requires some explanation.

In April 1825, the market began to slide.

The heaviest falls were experienced by British industrial securities and Latin

American bonds.

Such a severe asset price deflation was bound to bring a banking crisis in its

wake.

As it was, 73 out of 770 country banks failed.

The country came within 48 hours of putting stop to all dealings between man

man except by barter.

Much of the time, Nathan was a buyer or borrower of gold and silver.

In December 1825, however, it was the other way round. The Rothschilds gave

bank their gold, supplying the old lady of Threadneedle Street with enough

specie from the continent to avert a suspension of cash payments.

Of course, Nathan would not have made such immense deliveries of gold without

asking for a generous commission in return.

The operation has to be seen as part of his campaign to establish himself as the

dominant force in the London bullion market.

The rescue of the bank was a remarkable achievement which owed everything to the

international nature of the Rothschilds' operations.

In effect, the brothers were establishing that system of

cooperation which would later be performed routinely by central banks and

which the gold standard came to depend.

Increasingly, their position in the international bullion market was

dominant as their position in the international bond market.

Byron was therefore not far wide of the mark when he suggested in Don Juan that

Baring and Rothschild reigned over both royalists and liberals, and that their

loans could seat a nation or upset a throne.

He erred only in regarding the two bankers as financial equals.

In 1815, they had been.

By 1825, they were not.

If there was a sixth great power in the 1820s, it was no longer Barings, but

Rothschilds.

At the same time, by dint of their size, the Rothschilds came to see themselves

as bearing a degree of responsibility for the stability of the banking system

a whole.

This explains their reluctance to see their rivals fail.

In all this, the Rothschilds were increasingly beginning to think in a way

fundamentally similar to that characteristic of central bankers.

The central banks of England and France continued to be partly private

institutions.

In terms of their financial resources, they were in fact the only banks

comparable with the Rothschilds, though of course they were national, where the

Rothschilds were international.

The Rothschilds had no interest in resisting their monopolization of note

The relationships between the Rothschilds and the European central

thus almost always close and symbiotic.

Of growing importance as a non -exclusive source of financial

misinformation in this period was, of course, the press.

It might be thought that the proliferation of newspapers in the 19th

tended to erode the advantages which the Rothschilds were able to derive from

their private system of communications.

On the other hand, the existence of financial pages in newspapers presented

opportunities for influencing the markets, which the Rothschilds were not

to exploit.

Nathan responded to early press attacks by establishing what was to be an

enduring relationship with the most influential of all British papers, the

Times.

The Times correspondent reported from St. Petersburg that the mere appearance

James Rothschild at the bourse was expected to boost Russian bond prices.

By the summer of 1825, therefore, the Rothschilds had succeeded triumphantly

establishing themselves as the leading specialists in European public finance.

And not only European.

New fiscal needs quickly arose from the political crises which beset the Spanish

and Ottoman empires in this period.

It was this need which Nathan and his brothers successfully met.

The system they developed enabled British investors and other rich

in Western Europe, to invest in the debts of those states by purchasing

internationally tradable, fixed -interest transferable bonds.

The significance of this system for 19th century history cannot be

overemphasized, for this growing international bond market brought

Europe's true capitalists.

that elite of people wealthy enough to be able to tie up money in such assets

and shrewd enough to appreciate the advantages of such assets as compared

traditional forms of holding wealth, land, venal office, and so on.

Funds were liquid.

They could be bought and sold five and a half days out of seven on the major

bourses of Europe and traded informally at other times and in other places.

And they were capable of accruing large capital gains.

If investors bid up the price of a government's stock, that government

feel secure.

If they dumped its stock, that government was quite possibly living on

time as well as money.

For this reason, bond prices had a significance which historians have too

spelt out.

They were, it might be said, a kind of daily opinion poll, an expression of

confidence in a given regime.

Of course, they were an opinion poll based on a highly unrepresentative

by modern democratic standards.

Only the wealthy, the capitalists, got to vote.

These capitalists were thus to a large extent Europe's political class.

Indeed, the kind of people who held government bonds were, very roughly

speaking, the people who were represented politically.

And their opinions were the opinions that mattered in a stratified,

society.

The singular beauty of the bond market was that virtually every state,

including, as the century advanced, all the new nation -states and colonies, had

sooner or later to come to it, and most states had sizable amounts of tradable

debt in circulation.

The varying fortunes of government bonds provide a vital insight into the

political history of the period.

They are also the key to understanding the extent of the power of a bank like

Rothschild's, which for much of the 19th century was the prime market maker for

such bonds.

What determined the ups and downs of the 19th century bond market?

The answer to this question is central to any understanding of the history of

the Rothschild Bank.

Obviously, economic factors played an important part, but the most important

factor was political confidence.

The confidence of investors, and especially of big market -making

the Rothschilds, in the ability of the bond -issuing states to continue to meet

their obligations, that is, to pay the interest on their bonds.

There were only really two things which might cause them not to do so.

War, which would increase their expenditures and decrease their tax

and internal instability, ranging from a change of ministry to full -blown

revolution.

It was for indications of either of these possible crises

that the markets and the Rothschilds, more than anybody, watched.

Three things would give an investor an edge over his rival.

Closeness to the center of political life, the source of news, the speed with

which he could receive news of events in states far and near, and the ability to

manipulate the transmission of that news to other investors.

This explains why the Rothschilds spent so much time, energy, and money

maintaining the best possible relations with the leading political figures of

the day.

It also explains why they carefully developed a network of salaried agents

other key financial markets, whose job it was not only to trade on their

but also to keep them supplied with the latest financial and political news.

The Rothschilds' communications network gave them an important advantage over

their competitors.

Even after they lost this edge, they continued to exercise an influence over

financial press through which news reached the wider public.

Indeed, it can be argued that by modifying the existing system for

borrowing to make bonds more easily tradable, the Rothschilds actually

the international bond market in its modern form.

As early as August 1820, the Bremen delegate to the German Confederation

in Frankfurt had a conversation with his Austrian counterpart, Count Buhl, which

acutely identified the unrivaled extent of the Rothschilds' political influence

in Europe.

This house has, through its enormous financial transactions and its banking

credit connections, actually achieved the position of a real power.

It has to such an extent acquired control of the general money market that

in a position either to hinder or to promote, as it feels inclined, the

movements and operations of potentates and even of the greatest European

In fact, the rest of the 19th century was known as the Age of the Rothschild.

They financed lethal roads.

making it possible for him to establish a monopoly over the diamond and gold

fields of South Africa.

In America, they financed the Harrimans in railroads, the Vanderbilts in

railroads and the press, and Carnegie in the steel industry, among many others.

By 1850, James Rothschild, the heir of the French branch of the family, was

to be worth 600 million French francs. 150 million more than all the other

bankers in France put together.

He built this mansion called Ferrier, just east of Paris.

Wilhelm I, on seeing it, exclaimed, Kings couldn't afford this. It could

belong to a Rothschild.

Another 19th century French commentator put it this way, There is but one power

in Europe, and that is Rothschild.

By the end of the 19th century, One expert estimated that the Rothschild

controlled half the wealth of the world.

Despite this overwhelming wealth, the family has generally cultivated an aura

invisibility. Although the family controlled scores of industrial,

mining, and tourist corporations, only a handful bear the Rothschild name.

There is no evidence that their predominant standing in European or

finance has changed.

A dynasty turns jet.

Things were getting back to normal in 1945, but what, in family terms, was

normalcy? The house at Hamilton Place, built by Leo, became one of London's

luxurious pubs.

Another Rothschild residence in Kensington Gardens now constitutes...

The Soviet -Russian embassy.

And in France, the Titanic manse at 2 Rue Florentin on the Place de la

has gone the way of all Titanic manses.

Talleyrand had lived there before Edouard de Rothschild moved in.

When Edouard put it on the market, only one customer could afford the price,

Uncle Sam.

It became the European headquarters of the Marshall Plan.

and today is tenanted by the United States Mission to NATO and to European

regional organizations.

Henri de Rossier's huge place at 33 Rue de Faubourg Saint -Honoré now

houses the Cercle Interallier, a fancy international diplomatic club.

On the same street, the United States Embassy has taken over No. 41, built by

the first Baron Edmond.

The Rothschild monograms still crown the great portal for both houses.

Last, not least, Ferriere, the crown jewel among Rothschild possessions.

No one was rich enough to buy it, nor did the French branch want to part with

such a symbol.

Initially, a great deal of labour went into untangling the various pre -war

debts on which countries like Chile and Hungary had defaulted.

New issues, like the 1951 offering of £5 million of stock for the International

Bank for Reconstruction and Development, usually known as the World Bank, had to

be shared with other city houses.

The old Rothschild predominance in the South African gold market had already

been reasserted three years previously, when the international gold market

reopened. Once again, the world gold price was formally set in Newcourt's

room. Through a string of holding companies, Newcourt could now tap

lumber, power, mineral, particularly uranium, resources.

And Winston Churchill, appreciative of the scale of the thing, termed it a

imperial concept.

After Antony's death, his two nephews, Edmund and Leopold, took over together

with Antony's son, Evelyn.

In addition, Evelyn sat on the boards of Beaverbrook newspapers, The Economist,

and later the Telegraph PLC.

Edmund, the senior partner, struck out in still other directions, as owner and

operator of the Royal Mint Refinery, as gold agent to the Bank of England, and

as merchant banker extraordinary, consolidating still further a new

position as a key bullion broker in the English Commonwealth.

And laying the foundation for its present preeminent position in the

natural resources market, Rothschild Australia accounts for around a third of

the NM Rothschild Group's profits.

It retained its long -standing interest in gold, even after the breakdown of the

gold pool as a consequence of the pressures brought to bear on the dollar

Vietnam War.

Above all, it was to the countries of the developing European economic

that the bank looked.

Most farsighted of all was the Rothschild plan for a new currency

Euro, European Composite Unit, based on the values of nine major European

currencies, forerunner of the later ECU and Euro.

In September 1967, a channel study group was formed, along with Morgan Grenfell,

Lazar and Barrings, in an effort to revive the old Victorian dream of a

under the English Channel.

N .M. Rothschild maintained its interest in the project and acted as advisor to

the European Channel Tunnel Group, which initiated the present Channel in 1981.

It was at around this time that Guy, the head of the Paris House, was being

touted in some quarters as EEC Banker Rothschild.

The French Rothschilds are richer still, and they have become richer faster.

Baron Guy assumed the reins at the death of his father, Edouard.

With similar aggressiveness, Guy has fortified the position of de Rothschild

-Prayer as the largest private bank in France.

His main instrument here is the Compagnie du Nord, the railroad network,

became family property after the diner James financed it into existence.

Through its railroad -turned -investment front, the family controlled, and after

the Nazi nightmare, controlled again, mining corporations, metal plants, oil

interests, chemical industries, and many others.

This sort of set -up requires a feudal allegiance.

There are whole families that have been on the Rothschild payroll for over a

century.

A first tentative step in this direction was taken in 1960, when N .M.

Rothschild and Warburgs placed £340 ,000 shares in the August Thyssen Steel

Company on the London market.

the first German shares to be quoted in London since the war.

Then there is Guy's cousin, Edmond.

He is faithful enough to family discretion to keep the portals of No.

Faubourg Saint -Honoré, signless and anonymous.

From this headquarters, he runs the Compagnie Financière, a worldwide

organisation which builds villas, hotels, pipelines in Israel.

throws up giant housing projects in Paris, finances banks and car factories

Brazil.

He greatly enlarged the family holdings on the slopes of Mont Blanc, complete

with ski lifts, swimming pools, tennis courts and nightclubs.

He also underwrites and develops not merely hotels, but entire new tourist

regions in Martinique and Guadeloupe in the French Caribbean.

With Lord Rothschild as partner, He is responsible for the flowering of

luxury golf resort at Siberia.

Edmund James Rothschild Memorial Group contributed $1 million to the Weizmann

Scientific Institute in Tel Aviv, gave $3 million towards the construction of

the Knesset, and puts the bill for many of Israel's archaeological expeditions.

Pre -1914 links to Japan were also renewed by Edmund.

who made several visits there between 1962 and 1969, arranging euro -dollar

issues in partnership with Nomura Securities for a number of Japanese

including Hitachi and Pioneer.

The logical way of advancing Britain's financial integration with the continent

was to establish some kind of cross -channel institutional link.

The creation of Rothschild's Continuation Holdings, AG, as the Swiss

parent company, was, in this sense, pregnant with historical significance.

To recreate something like the system of international partnership, which had

been the Rothschild's greatest strength in the 19th century.

The NM Rothschild Group is thus a multinational entity.

More than 50 % of its assets are now held outside the UK, with a wide

geographical reach.

Again, reminiscent of the system of houses which had been developed by my

sons after 1815.