In the end, none of the brothers was equal to the task of untangling the accounts. It was left to Benjamin Davidson to try to reconstruct the extraordinary transactions of the previous year—and then to try to conceal the numerous irregularities which had occurred. The difficulties he confronted were daunting. For a start, none of the brothers had yet adopted the system of double-entry book-keeping. As Amschel put it, the Berlin banker Mendelssohn “know[s] how he stands with each of [his joint accounts] while in the House of Rothschild we have to rely on what the book keepers say. Gasser tells me: ‘We have made nice profits on the Prussian transactions’ and I have to believe him.” This in itself is remarkable: after all, the double-entry system had first been described by the Venetian Luca Pacioli in 1494 and was widely known in most European countries by the end of the sixteenth century. The fact that the Rothschilds were so slow to adopt it suggests that the capitalism of the Frankfurt Judengasse was technically quite backward (though it also, of course, suggests that business geniuses can do without accountants—for a time). Secondly, there were substantial gaps in the records, reflecting the habits of concealment which had developed in Frankfurt and elsewhere during the period of French occupation. Thirdly, there was the problem of the large profits which had been made on exchange rate fluctuations without Herries’s consent. Finally, and most embar rassingly, there were the “fictional” accommodation bills which had been issued, which totalled more than £2 million. As Davidson put it drily, “One should have thought earlier . . . that one day Herries [would] have to look at these accounts.”
Fortunately, Davidson was able to arrive at figures which showed the government rather than the Rothschilds as the principal beneficiary of the subsidy and other payments; and in the end Salomon’s verdict seems to have been accepted by Liverpool and his colleagues that “not even a hundred banking houses would have been able to carry out a business transaction of this size within nine months and to show a profit for the government.” Herries was discharged honourably with a pension when the office of commissary was wound up in October 1816 and a Commons motion to prevent his appointment as auditor of the Civil List was defeated. Nevertheless, Salomon was still fretting about the accounts as late as January 1818:
We are not yet in the clear with the government . . . As long as the government leaves the accounts with Herries in suspension, we are not yet in the clear. [Are we] rich men or are we at ease? As far as I can see, the serving boy is more at ease with the little he has than we are with the great deal we have. Why? Because he doesn’t have a bungled account with a government hanging round his neck . . .
It is fair to conclude that the huge profits of 1814 and 1815 were made in ways much more mysterious—and hazardous—than the traditional Waterloo myth implies.
Fraternity
The idea of brotherhood was profoundly important in nineteenth-century Europe. Freemasons, liberals and later socialists all idealised the fraternal relationship, creating a bewildering variety of associations which sought to forge artificial brotherhoods beyond the narrow familial realm. This was nothing new, of course. Religious orders had done the same for centuries. But “Alle Menschen werden Brüder” was a line which, when penned by Schiller and set by Beethoven, had a thinly disguised revolutionary significance. As the French Revolution’s best-known slogan implied, to imagine all men becoming brothers was as radical as to imagine them all becoming free and equal.
Contemporaries often inferred from the Rothschilds’ extraordinary success that they exemplified this ideal of fraternity. This was not because it was exceptional, as it is in Europe today, for a family to produce five sons or, indeed, five daughters, as Mayer Amschel and Gutle Rothschild also did. Francis Baring also had five sons. Indeed, as late as the 1870s nearly a fifth (18 per cent) of women who married in Britain had ten or more live births, and more than half had six or more; the statistics for Germany are similar. What impressed contemporaries was that the Rothschild brothers seemed to work together in uncommon harmony. This had been one of the points strongly emphasised by Friedrich Gentz in his influential article for the Brockhaus Encyclopaedia:
With the greatest conscientiousness, the brothers [have] obeyed their father’s heartfelt deathbed injunction to maintain unbreakable unity and co-operation in all business transactions . . . [E]ach [business] proposition is the subject of their joint deliberations; every operation of even moderate importance is carried out according to an agreed plan and with co-ordinated efforts; and all the brothers have an equal share in the results.
Simon Moritz von Bethmann, their rival in Frankfurt, echoed this view: “The harmony between the brothers contributes largely to their success. None of them ever thinks of finding fault with another. None of them adversely criticises any of the others’ business dealings, even when the results do not come up to expectations.” “The prosperity of the Rothschilds,” remarked Benjamin Disraeli later, “was as much owing to the unity of feeling which alike pervaded all branches of that numerous family as in their capital & abilities. They were like an Arabian tribe.” This soon hardened into the myth of “the five Frankfurters.” As one German writer put it in the 1830s:
These five brothers together formed an indomitable phalanx . . . and, true to their principle never to undertake anything individually and to agree all operations precisely among themselves, always followed the same system and pursued the same goal.
Such comments would have been otiose if fraternal harmony had been the norm; the paradox is that, unlike the idealised brotherhood of the poets, real brothers seldom worked well together. Jews and Christians alike knew the story of Joseph and his brothers, one of the best biblical accounts of fraternal strife: the hatred of Gad and Asher for their half-brother, the precocious favourite Joseph; the intense affection between Joseph and his young brother Benjamin; the ambivalent feelings of Reuben, the first born; the violent confrontation and final reconciliation. Relations between the Hope brothers and the Baring brothers were less turbulent, but they failed to transcend their personal differences in the name of fraternal unity. As the Rothschild brothers overtook them financially, they seemed to personify an elusive ideal.
In reality, however, brotherly love was far from easy to maintain in the chaotic circumstances of 1814 and 1815. As their resources were stretched by a succession of huge and risky undertakings, personal relations between the Rothschild brothers frequently deteriorated—on occasion, to the point of complete rupture. The main reason for this was undoubtedly Nathan’s increasingly imperious treatment of his supposed partners in the business. Technically, according to the 1815 agreement, the brothers were equals: profits were divided equally, and Nathan gave each of them a promissory note worth £50,000 to compensate for his much larger share of the capital. But as Salomon and others commented at the time, the combination of Nathan’s aggressive temper and the increasingly Anglocentric nature of the firm’s operations effectively reduced the other brothers to the status of mere agents. Nathan was, as Salomon half joked, “the commanding general,” the others were his “marshals,” while the sums of “capital resources” they had to dispose of were “soldiers” who had to be “kept in readiness.” The implied comparison with Napoleon himself—against whom, after all, their financial operations were ultimately directed—was a revealing one, and Nathan’s brothers were not alone in making it. As Swinton Holland said to his partner Alexander Baring in 1824: “I must candidly confess that I have not the nerve for his operations. They are generally well planned, with great cleverness and adroitness in execution—but he is in money and funds what Bonaparte was in war, and if any sudden shake comes, he will fall to the ground like the other.” To Ludwig Börne, Nathan and his brothers were all “Finanzbonaparten,” and the parallel was still being drawn by writers in the 1870s. But it was really Nathan who became the Bonaparte of the banking world, and he shared with the French Emperor his superhuman appetite for risks and his intolerance of inept subordinates.
As early as 1811—even befo
re their father’s death—Nathan’s brothers had begun to complain about the occasionally bullying tone of his letters. But it was not until the middle of 1814 that he really began to emerge as the dominant, not to say domineering, partner. The key issue was his desire to dictate his brothers’ movements. In June 1814 he ordered Salomon to go to Amsterdam to assist James and took the opportunity to let fly at their brothers in Frankfurt: “I tell you, Amschel and Carl make me damned upset. You have no idea how idiotically they write and they draw on me like madmen . . . By God, they write me such idiocies that today I feel very cross. Amschel writes to James as if he could do the business by himself.” This evidently touched a raw nerve, and Davidson’s appeal to Nathan to desist from “disparaging correspondence” came too late. A distraught Carl took to his bed, warning that “if he carried on in this way,” Nathan would “soon have a partner in the other world,” so ill did his letters make him feel. Salomon also complained of “severe pains in my back and legs,” but his tone was angrier:
I cannot for one moment believe that even if I were the learned Nathan Rothschild I would regard the other four brothers as stupid schoolboys, and myself as the only wise one . . . I do not wish to be upset any more and made more ill than I already am. To put it quite bluntly, we are neither drunk nor stupid. We have something you in London obviously do not have—we keep our books in order . . . If my tears were black I would write a lot more easily than with ink . . . The English mail day is a regular terror for me. Every night I dream of these letters . . . One just doesn’t write that way to one’s family, one’s brothers, one’s partners.
But all their protests merely elicited from Nathan a stark threat to dissolve the business:
I have to admit that I was thoroughly fed up with the longwinded business and its disagreeable consequences . . . And now from today on . . . I think that it would be best if Salomon would close the Paris accounts and come to London. And David[son] can bring the Amsterdam accounts with him. Then we could clear up the accounts. I expect from Frankfurt an account [too] . . . because I am fed up with the partnership . . . I know that you are all clever men and now all five of us shall have, thank God, peace.
This had the desired effect; henceforth Nathan gave the orders more or less unchallenged, as Salomon acknowledged in a letter to Salomon Cohen in August 1814:
My brother in London is the commanding general, I am his field marshal and consequently I have my duty to fulfil in my capacity as such, and therefore I have to give the commanding general reports, comments etc. I may have made the case somewhat stronger so as to show him how serious I am in what I say, but it is still an exaggeration to say that I lose my head . . . Being a good general, you ought to know exactly what a good general has to know and not think continually of advancing only, but you ought to go on the defensive occasionally in order to safeguard your strength.
As this letter suggests, Salomon continued to worry that Nathan was overreaching himself, but he now obviously saw himself in a subordinate, advisory role: “[W]e regard you as general-in-chief, with ourselves as lieutenants-general. God may give us luck and blessing, and success. In this case we [remain] generals. Those, who, God forbid, have no peace, nor luck, are not even corporals.” Carl too accepted Nathan’s primacy, though he employed a slightly different metaphor: “I am only the last wheel [of the carriage] and look upon myself in the sense of a machine only.” He and Salomon might not care for Amsterdam, but they stayed there if Nathan told them to. Even Salomon’s requests to return to Frankfurt—where he had spent just three weeks in the previous three years—to see his wife or to be present at his son’s barmitzvah were evidently regarded by Nathan as unreasonable; the second request was granted only on condition that Salomon return to Paris after just a day and attend to the Frankfurt accounts while he was there. Nathan had only one concern: business. “All you ever write,” complained Salomon wearily, “is pay this, pay that, send this, send that.”
Since 1811 . . . I have gone where business called me. If I were needed today in Siberia I would . . . go to Siberia . . . Please do me a favour and desist from posting any more ill-tempered letters. One sits in his inn, often at the light of a candle, waiting for the brothers’ letters. Instead of going to bed in a happy mood, one is depressed and remains sleepless. What kind of pleasures are still open to us? We are all well on in years, the pleasures of youth are out of our reach; unfortunately we have had to say “good night” to [all] that; our stomachs are bad [so] there is no gluttony for us. Consequently nearly all the worldly pleasures are closed to us. Should we have to renounce the pleasure of correspondence [too]?
But Nathan gloried in his ascetic materialism:
I am writing to you giving my opinion, as it is my damned duty to write to you . . . I am reading through your letters not just once but maybe a hundred times. You can well imagine that yourself. After dinner I usually have nothing to do. I do not read books, I do not play cards, I do not go to the theatre, my only pleasure is my business and in this way I read Amschel’s, Salomon’s, James’s and Carl’s letters . . . As far as Carl’s letter [about buying a bigger house] is concerned . . . all this is a lot of nonsense because as long as we have good business and are rich everybody will flatter us and those who have no interest in obtaining money through us begrudge us for it all. Our Salomon is too good and agreeable to anything and anybody and if a parasite whispers something into his ear he thinks that all human beings are noble minded[;] the truth is that all they are after is their own interest.7
Privately, even Gentz had to acknowledge that in reality Nathan was primus inter pares. It was he who had the “remarkable instinct which causes them always to choose the right, and of two rights the better”:
Baring’s most profound reasoning inspires me, now that I have seen everything at close quarters, with less confidence than the sound judgement of one of the more intelligent Rothschilds—for among the five brothers there is one whose intelligence is wanting and another whose intelligence is weak—and if Baring and Hope ever fail, I can state with confidence that it will be because they have thought themselves cleverer than Rothschild and have not followed his advice.
The use of the singular “Rothschild” is important. There was only one true Finanz bonaparte.
It was probably Amschel and Carl whom Gentz had in mind when he spoke of “one whose intelligence is wanting and another whose intelligence is weak.” This was unfair: a more accurate characterisation would be that they were more risk-averse than their brothers. Amschel was the most cautious of the five and constantly yearned to lead “a quiet life.” “Me, I don’t want to eat the world,” he wrote in a typically homespun letter. His ideal was “to work in tranquillity,” without the anxieties which Nathan’s Napoleonic approach necessarily generated. Carl, the fourth brother, was nervous and insecure, and shared Amschel’s limited ambition. “I am fed up with business,” he confided to his eldest brother in a characteristic letter. “I wish God would give me but little, enough to live, garments for myself and bread to eat. I do not wish to float above the skies.” This feeling doubtless intensified at the time of the Amsterdam treasury bills fiasco, which brought a torrent of recrimination down upon him. After this, as Salomon wrote, Carl was genuinely “afraid” of Nathan, though he was still capable of muttering criticisms behind “the boss’s” back. As we have seen, Salomon himself had the intellect and self-confidence to question Nathan’s strategy; but he was too “quiet and thoughtful” and “took things too much to heart”—according to senior Rothschild employees like Davidson and Braun—to withstand his brother’s belligerence. He preferred, where possible, to side with Nathan against the others.
Yet Nathan’s dominance was never absolute: the partnership did not degenerate into a dictatorship. There were several reasons for this. Firstly, Nathan’s youngest brother James—who was just twenty-three in 1815—was markedly less submissive to his will than the other three. At the height of the bitter row in June 1814, James remained cool, sardoni
cally telling Salomon Cohen that he was allowing Nathan “to dictate to him about millions as if they were apples and pears.” Although there were times when James contemplated leaving Paris, it is unlikely that he stayed there just because Nathan told him to. The youngest brother was intellectually and temperamentally Nathan’s equal; he also had the advantage of a better schooling. Revealingly, it was James who urged his brothers to adopt double-entry book-keeping. It was only really the age difference between the two which obliged James to defer for the next twenty years to his brother. Even in acknowledging Nathan’s leadership, James was less than deferential. “The main point is now to work out a sensible plan for England,” he wrote to Nathan in March 1818. “You will have to do this . . . I leave the decision to you. My duty is mainly to draw your attention to this matter and your duty, as chief commander, is to work it all out.” As early as December 1816 Carl had cause to complain about James’s critical letters, the burden of which was that the Frankfurt house was not making enough money. Already he was evincing Nathan-like traits. At the same time, Nathan (and later James) occasionally needed to be restrained by their less bullish relations. As Amschel said to James following one of the most serious setbacks of the post-war period:
The House of Rothschild, Volume 1 Page 19