Chapter 3: The Ruling Elite by Deanna Spingola: Nathan Rothschild, Relocation to the Banking Capital

 

Chapter 3: The Ruling Elite by Deanna Spingola: Nathan Rothschild, Relocation to the Banking Capital

 

Nathan Rothschild, Relocation to the Banking Capital

Concerning Nathan Mayer Rothschild, a friendly biographer Frederic Morton wrote, “You couldn’t stop

or even comprehend Rothschild, or even the reason why he, having so much, wanted to conquer more.”[75]

Mayer Rothschild sent his son, Nathan to England in September 1798 with approximately £20,000 (about $1,500,000 in current values) in credits to expand the House of Rothschild abroad.[76] Within a short time, Nathan had doubled and then tripled the money. His father, with competitive wholesale prices, dramatically increased his textile business.[77] In addition to supplying his father and other Frankfurt traders, Nathan established additional trade connections in France, Sweden, Switzerland, and even Russia and transformed the Rothschild’s business into an international concern.

Napoleon Bonaparte, a military, a political leader and French Emperor, was also a Freemason. The secret society initiated him into the Army Philadelphe Lodge in 1798. He threatened to cross the Channel in 1798, the same year that Nathan Rothschild left for London, England for a short duration, and then he relocated to Manchester, a growing industrial center where many textile wholesalers and merchants thrived.[78] Nathan Rothschild also became a Freemason; he joined the Lodge of Emulation in London on October 4, 1802.[79] Rothschild, despite wartime embargoes, sent discounted cotton to his father’s warehouse throughout the Napoleonic Wars (1793-1815), a period of incessant warfare kindled by the French Revolution. Prices for all basic goods and commodities skyrocketed, a typical economic situation for any country engaged in warfare. The Rothschilds manipulated the war circumstances, probably paid off some officials, exploited the chaotic cultural conditions and managed to create an international network.

[80]

Sending his son, Nathan to England was a calculated, well thought out strategy, not mere

happenstance.[81] Nathan Rothschild did not emigrate from Germany to England to escape ongoing warfare on the European continent. Mayer A. Rothschild had already established business relations with British cotton firms through his financial alliance with Prince Wilhelm. After war erupted again in 1793, a large percentage of the Dutch trade had shifted to north German ports. Consequently, England was the opportune place to be.[82]

Nathan Rothschild, non-English speaking, initially worked for the London firm of Levi Saloman and Levi Barent Cohen (1740-1808). Cohen was the son of a prominent Amsterdam textile merchant who had moved to London in 1763, an era when many Jews left Holland – some to England and others to America. Ethnic groups tend to migrate together. Cohen was connected, by marriage, to Abraham and Benjamin Goldsmid, sons of another Amsterdam emigrant. By the end of the eighteenth century, the Goldsmid brothers had become England’s principal loan agents.[83] Nathan Rothschild worked with Cohen and Saloman until May 1799 then moved to Manchester to establish his own agency where he traded in textiles. There are no recorded business transactions until February 1800, at about the time that he hired JosephBarberasaclerk.[84] Manchester,inLancashire,thetextilecenterofEngland,wasreputedtobethe world’s first industrialized city.[85]

Nathan Rothschild shipped goods into the German states through Hamburg, which shipping agents then transported to Frankfurt and other destinations.[86] He followed the family tradition of buying in massive volumes with cash when the market was down and selling in volume at rising levels of profit.[87] Currently, the House of Rothschild uses this formula to sell a portion of their accumulated stockpile of gold, probably the bulk of which they seized or acquired when the price was very low, as is their conventional way of doing business.

By 1800, Britain’s Industrial Revolution was thriving due to inexpensive labor, capable artisans, cheap coal, good coke, and iron ore. However, Britain lacked sufficient raw products. Its textile industry had exceeded their domestic supplies and continued growth depended on imports. The Lancashire cotton industry developed because of readily available cotton from India and later from America’s southern states.[88]

In addition to textiles, Nathan purchased foodstuffs, colonial imports and anything else that Napoleon’s blockade had categorized as contraband, which added to the profitability. Messrs.’ Brothers Müller, of Lübeck, a Hanseatic City in northern Germany, and one of the nation’s major ports, received Nathan Rothschild’s wares and sent them to their ultimate destinations. In August 1803, the French planned to occupy Travemünde, close to Lübeck, as reported by Joseph Barber, Rothschild’s bookkeeper. He merely changed his shipments from Lübeck to the ports of Emden and Tönning until 1806. Those ports were more convenient to Britain and to Frankfurt.[89] He established a European supply network from his Manchester base and fortuitously, probably through his covert connections, avoided the blockades. He imported items from the colonies and the Orient by chartering fast ships and hiring special couriers to evade ports under French control. His financial discounts produced higher sales volumes and he seized business from recognized, long-established merchants and banks.[90]

Soon previously empty store shelves had product – in Germany, Scandinavia, in the Lowlands and in France. War famine had created a substantially more profitable environment for cotton goods, yarn, tobacco, coffee, sugar, and indigo. Moreover, the Rothschilds, who made a fortune, were happy to exploit the fortuitous opportunities that war on the continent had provided. People, desperate for goods, gladly paid “famine prices” with whatever resources they could acquire.[91] Shortages, under any circumstances, mean big profits for the distributors and the financiers – in this case, the House of Rothschild.

Sometime in 1805, Nathan Rothschild and Hannah Cohen, the daughter of Levy Barent Cohen, were betrothed. Cohen was a well-known wealthy textile merchant and international diamond trader. Cohen consigned his diamonds to Hope and Company who had a well-established network of customers throughout Europe and Russia, including Catherine the Great. Most likely, his diamonds were Brazilian, the most dominant source for diamonds at the time. He was London’s leading diamond merchant (1781- 1794). Records of his diamond business have disappeared from any London archive. However, record keepers have thoroughly documented his commerce in the archival collection of Hope and Company, the Amsterdam merchant banking establishment.[92]

Henry Hope, the elder, a Rotterdam merchant, went to Boston in about 1720, became a Freemason, a merchant and ultimately an international banker, after the Seven Years War (1756-1763) when he lent money to the governments of Sweden, Russia, Portugal and Bavaria. Hope later sent his Boston-born son, to London as an apprentice to Henry Hoare of Gurnell, Hoare, & Harman, England’s oldest privately owned banking house with London headquarters on Fleet Street.[93] He then went to work for the family business in Amsterdam. By 1779, Henry, the younger, was managing Hope and Company. He went to London in 1794 to escape Napoleon’s troops. There he collaborated with the founder of Baring Brothers and Company, England’s oldest merchant bank, Francis Baring (1740-1810). Baring, a family originally from Germany, was a director and investor with the British East India Company. He promoted the company’s monopoly and commercial interests. Baring and Hope worked on several huge land deals including the Louisiana Purchase, a transaction that took almost a decade to negotiate. Alexander Baring, the son of Francis, went to America as their financial agent.

Alexander Baring was a partner at Hope and Company that entered into the international banking business and maintained strong ties to the British East India Company. When Boston native Henry Hope died in 1811, Baring merged Hope and Company with Baring Brothers & Company. Henry Hope had been head of a consortium of English and Dutch investors that fronted the money. Hope had lent money to Portugal’s King José. Portugal’s Minister of the Kingdom (like a Prime Minister) was Sebastião José de Carvalho e Melo. He established civil statutes forbidding discrimination against New Christians, the Muslims and Jews. Subsequently, Henry Hope received an exclusive concession to market diamonds from Portugal’s colony, Brazil, which they sold through Amsterdam, making that city Europe’s diamond center. Henry Hope entertained John Adams, Thomas Jefferson and Benjamin Franklin when they visited Europe for trade negotiations.

In October 1806, Napoleon assaulted Prussia and Hesse and occupied Frankfurt. Prince Wilhelm fled to

Schleswig-Holstein, the northernmost of the sixteen states of Germany, near the Danish border, where he

had previously deposited some of his wealth with the aid of Mayer Rothschild who now had almost total

control of Wilhelm’s resources. Napoleon wanted to destroy the house of Hesse-Kassel. Rothschild had

viewed control of Prince Wilhelm’s resources as a stepping-stone and now it seemed that it was about to

be destroyed. However, with every challenge, the Rothschilds seemed impenetrable and unmoved in their

objectives. Napoleon, who had just defeated the Prussian army on October 14, 1806, would not alter their

plans but would be another springboard. That is all the Rothschilds saw, steppingstones and springboards.

[94]

In 1806, the U.S. government embargoed the exportation of raw materials to Britain. As a result, a crisis erupted in the English cotton industry in Manchester. Britain suspended operations in every cotton mill and thousands of laborers were suddenly unemployed and facing starvation.

On November 21, 1806, Napoleon, in the Edict of Berlin, closed all ports to English and colonial commodities because of England’s total disregard for the accepted rules of naval warfare. He said, “The same law of war for the sea as for the land, which cannot be extended to private goods or non-

combatants, and that blockades must be limited to fortified places invested with competent force.” Napoleon justifiably believed that England was attempting to rule the world. He felt that anyone who dealt in English goods was an accomplice and was subject to arrest.[95] He asked Austria, Prussia, Sweden, Denmark and Russia to participate in the blockade. Because of this blockade, Nathan Rothschild chose to join forces with John Parish and Company, an important new partner. By the time that Rothschild started working with Parish, his sons, John, Charles and David Parish, had assumed the business.[96]

The House of Parish, since the early 1790s, had collaborated with Hope and Company of Amsterdam and Harman and Company in London, an old partner of Mayer Rothschild’s. By 1794, John Parish was transferring English subsidies to Prussia. During the 1790s, Parish had close connections with the England’s Board of Transport and provided English troops with money and commodities. Parish also supplied the Navy with ships to transport British soldiers to the West Indies. In 1806, Nathan Rothschild established a joint venture with Fermin de Tastet in which he was buying hides in Buenos Aires. By 1807, Rothschild, in cooperation with the Cohens, had begun direct trade with agents in the West Indian sugar islands.[97]

John and Charles Parish helped break the blockade and kept Nathan Rothschild fully informed about the circumstances on the continent. They organized secret transports of products to Frankfurt and shifted the bills of lading and money through correspondent banks in Rotterdam and Amsterdam.[98] The blockade escalated trade and profits for risk takers. Nathan had a fleet of ships at his disposal that he sent to the Dutch and north German coast. His brothers had assistants at Hamburg, Dunkirk, Amsterdam and an elaborate messenger service connected to London to keep track of all trade movements.[99]

On October 21, 1806, Levi Barent Cohen made a “Settlement” for his daughter and the “Solemnization” of her marriage. Nathan Rothschild, age twenty-nine and Hannah Cohen, age twenty-three were married on October 22, 1806. Levi Cohen transferred £3,248.14.06 in three percent Consolidated Bank Annuities (3% Consols) in the names of Joseph and Solomon Cohen, his sons, and Samuel Moses Samuel, who had married his daughter Esther in 1803. The trustees were to pay Hannah dividends, interest and annual produce from the 3% Consols “for her sole and separate use and benefit for and during the term of her natural life independent of said Nathan Mayer Rothschild.” This was not a dowry and did not enrich her husband as some people have claimed.[100]

Hannah’s father was the richest Jew in England and was associated with the Goldsmids, Mocattas, Montefiores and other important Jewish financiers in the City.[101] Nathan Rothschild’s youngest sister, Henrietta (Jette) would marry Abraham Montefiore in 1815.[102] He was the younger brother of Moses.[103] Moses and Abraham Montefiore made a fortune on the London Stock Exchange. Nathan and Moses founded the Alliance Insurance Company to rival Lloyds of London, founded in 1774. European stock exchanges (bourses), established in the seventeenth century, allowed governments to sell their loans (bonds) and mercantile trading companies to acquire additional cash for foreign ventures.[104]

Hannah Rothschild’s father, Levi Cohen died on March 11, 1808. Nathan Rothschild had as many business deals with Cohen as he did with his father, which was considerable. In 1809, his deals with Cohen amounted to £200,000. In 1810, the value of these transactions more than doubled to about £444,000.[105] Cohen’s brother, Salomon David Barent Cohen and his wife Sara Brandes were the great-grandparents of Karl Marx.

In 1808, Nathan Rothschild recognized an opportunity in the “rapidly rising market price for gold and silver” in England and Europe, caused by the probability of war between Britain and France. He positioned himself in the international specie and bullion trade.[106] Britain had to pay the costs of the troops they had sent to the Iberian Peninsula in 1808 – it amounted to one million pounds in specie, which diminished Britain’s gold reserves.[107]

On August 17, 1808, Nathan Rothschild moved his family from Manchester to London, to 12 Great Street, St. Helens Bishopgate Street. On November 22, 1808, Hannah had their second child, Lionel. In May or June 1809, they moved again to No. 2, New Court Street, St. Swithin’s Lane that still houses Rothschild interests.[108] Nathan and Hannah had sons, Lionel Nathan Rothschild (1808-1879), Anthony Nathan de Rothschild (1810-1876), both of whom attended the University of Göttingen. Other sons included Nathaniel Rothschild (1812-1870) and Mayer Amschel de Rothschild (1818-1874) who studied at the University of Leipzig and at Heidelberg University. They also had daughters, Charlotte, Hannah and Louise.

In 1809, Wilhelm put £550,000, the largest amount of money transacted through the Rothschilds, into stocks, loans, or bonds in England. It was the apex of Nathan’s business.[109] After Wilhelm’s exile, Nathan Rothschild’s enterprise surged. On February 17, 1809, Carl Buderus officially collaborated with Rothschild. Buderus, and now with a financial interest, pledged to advise the firm to the best of his ability. Rothschild, under his own name, invested Wilhelm’s surplus funds, £550,000, in English Consolidated Stocks that elevated Nathan’s credit standing with the City of London. Wilhelm, who had relocated to Prague, was satisfied with the returns and Nathan’s lower commission rate. Rothschild was very adept at buying low and selling high.[110] The family fortune went from £80,000 in 1800 to £4,000,000 in1825.[111] WhenJacob(James)RothschildvisitedLondoninOctober1809,Rothschildmadehisyounger brother a partner in the specie and bullion trade.[112]

By 1810, Rothschild had been shipping from £20,000 to £40,000 per month to Frankfurt during the blockade, with a 50% profit, with an annual total of about £100,000. He terminated his export business towards the end of 1810 due to a new French policy legalizing trade with England. Banking, much more lucrative, took the place of trading. Rothschild had purchased £800,000 of gold at a bargain price from the East India Company. Wellington’s under-funded troops were in Portugal battling the French and were ready to give up for lack of funding. Rothschild agreed to sell the gold he had just acquired to the British government to keep the war going. Additionally, he transported it to Wellington via Jacob, who had gone to Paris in the spring of 1811 to establish a branch. The family had agents in Malta, Marseilles and Livorno, and other places.[113]

By the end of 1810, the family had maximized their profits from smuggling. On September 27, 1810, Mayer A. Rothschild announced the he was changing the name of his enterprise to Mayer Amschel Rothschild und Söhne. Mayer, Amschel, Salomon, Kalmann and Jacob Rothschild would hold the firm’s shares. Nathan was not included as his work was more crucial – he had organized the smuggling and was developing the gold and bullion enterprise, which would grow exponentially. Contraband was just the beginning.[114]

By about 1810, through his alliance with Fermin de Taster & Company of London, Nathan Rothschild was shipping specie. He had clients in Curaçao, an island in the southern Caribbean Sea, off the Venezuelan coast and a constituent country of the Kingdom of the Netherlands and in St. Thomas, another island in the Caribbean Sea, who sent him doubloons, dollars, and gold bullion valued in thousands of English pounds sterling to pay for merchandise he had sent them. The English had seized the Danish islands in 1801 for about a year and again from 1807 to 1815. The Dutch East India Company established Curaçao as the center of the Caribbean slave trade as early as 1662. Merchants from the U.S., England, Italy, Germany, St. Thomas, Curaçao, Guadalupe, and Martinique moved to Puerto Rico by the time that Haiti occupied Santo Domingo (1822-1844). They forced landowners out and seized their land. The Rothschild’s St. Thomas house established a branch in Santo Domingo around 1830 under the name of Rothschild and Cohen.[115]

The five Rothschild brothers set up banking houses in strategically located areas where compliant

politicians would accommodate the banker’s objectives relative to a nation’s money and credit. Nathan Rothschild had superior moneymaking skills and headed the London firm while James established a branch in Paris in 1812, the year his father died. They founded the firm of Rothschild Frères in Paris in 1817 and Karl founded a branch in Naples in 1821.[116] In 1811, Nathan sold his Manchester textile concerns in order to concentrate on becoming the Britain’s principal financier. He allegedly provided the funds that guaranteed the victory at Waterloo. He had established a courier service that allowed the brothers to have daily communication, which gave them major advantages over their competitors.[117]

The British government selected Rothschild over Mocatta & Goldsmid and the Barings because Alexander Baring had loaned money to the U.S. to carry on what the British government called a “vindictive war” against them. Additionally, Rothschild had enough resources to satisfy the government’s needs. Rothschild’s extraordinary network surpassed the connections of any other British merchant banker who traded gold and bullion abroad. His brothers had the same power and influence in Amsterdam, Paris, Hamburg, and Frankfurt.[118]

On January 11, 1814, Nathan Rothschild received a lucrative contract with Britain to supply coinage to pay their troops who were fighting in the European balance-of-power playoff, the Napoleonic War. He financed both sides of the war. He was to deliver £600,000 in gold and silver French coin to Wellington’s headquarters in the South of France.[119] From the family’s huge network of cash-carrying couriers, he reportedly received prior knowledge about the outcome of the Battle of Waterloo. He manipulated bonds in the London Stock Exchange to create panic and frenzied selling and increased his fortune by 6,500 times.[120]

Nathan Rothschild had expanded his trade with Russia who needed foreign bullion and specie to satisfy the country’s huge domestic war debts accrued from fighting against Napoleon. Britain, backed by Rothschild, had promised to subsidize the Russian military. Because of the depreciation of Russia’s currency, Rothschild was able to increase his profit by more than 30% in that market.[121] From the days of Mayer A. Rothschild, the family obsessively accumulated gold and the family is evidently quite willing to acquire it by available method, even warfare and its subsequent plunder.

Britain’s war with France ended on May 30, 1814 with the Treaty of Paris. England had to pay numerous subsidies to those who had aided in Napoleon’s defeat. Nathan and his emissaries were indispensable in the transportation, delivery and exchange of large amounts of gold and specie across borders. Because of his resources and England’s dependency upon Rothschild, he controlled the Bank of England and consequently the entire economy. Three years later, he orchestrated a cash-coup in France. Throughout the years, the Rothschilds and their agents have staged many worldwide catastrophic cash-coups. They altered their procedures and, for privacy, withdrew from the limelight, preferring to work through others, in their fleecing of corporations and countries.[122]

In addition to realigning the political borders of Europe at the conclusion of the Napoleonic Wars in 1814, the Rothschilds attempted to set up an organization to facilitate world governance during the Congress of Vienna held from November 1, 1814, to June 8, 1815, chaired by the Austrian diplomat Klemens Wenzel von Metternich. Czar Alexander I immediately rejected the idea of a governing organization as well as a private Rothschild bank in Russia. Nathan Rothschild proposed that those world leaders perpetually designate Switzerland, in the heart of Europe, as a neutral, sovereign territory. Geneva would also serve as the location of the four treaty conventions adjudicating international law regarding non-combatants and prisoners of war. Switzerland would provide the Rothschilds with a location from which to finance both sides of their population-depleting, debt-creating, orchestrated wars.[123] When the Czar rejected the plan, Nathan Rothschild vowed eventual retribution against the entire Romanov family.[124]

Financing Industry