The House of Rothschild, Volume 1

by Niall Ferguson

  Of all these works of hackery, perhaps the most sophisticated was the anonymous Judgement Passed against Rothschild and Georges Dairnvaell, which rejected the charge of culpability for the Fampoux disaster, but argued that “the proletarian” had been right to attack “the millionaire” with his “pockets full of banknotes and shares.” Like Toussenel, the author of the Judgement essentially equated Judaism and capitalism: James was “the Jew Rothschild, king of the world, because today the whole world is Jewish.” The name Rothschild “stands for a whole race—it is a symbol of a power which extends its arms over the entirety of Europe.” Yet the Rothschilds were breaking no laws in “turning and returning” their capital and “exploiting all that is exploitable”: they were merely “the model of all the bourgeois and mercantile virtues.” It was the bourgeoisie as a whole which had “bent its knee before the Jewish golden calf ” and embraced the “Jews” hereditary doctrine of the unlimited exploitation of property.” Rothschild, in short, personified “a system which is responsible for the misery and desperation of millions of men.” In constructing his railways for industrial and commercial gain, rather than to promote “the fraternisation and amalgamation of the whole human race,” Rothschild was thus fulfilling “the development of the bourgeoisie.” This combination of anti-Semitism and socialism would prove the most dangerous of all threats to the Rothschilds’ position in the years which lay ahead.

  As might be expected, the Rothschilds themselves were appalled by this extensive and generally defamatory press exposure. In a letter to the Prussian government, Anselm deplored what he called “the foulest and entirely unfounded imputations upon the character and morality of our business.” There was little, however, that could be done in the absence of censorship of the press in France; only when similar pamphlets appeared in Prussia could the Rothschilds lobby to have them suppressed, pointedly reminding the government in Berlin of “important services” they had rendered to Prussia in the past, and the “special claim” this implied. James thundered impotently, accusing the press of mindless Luddism: “The world can no longer live without the railways and the best answer one can give to the National is that if France should opt to exclude herself from the railway developments and if they hope to achieve their goal of frightening the world from using the railways then the result will be that all the travellers will make use of the other railway routes”:

  In an article I will ask whether the newspapers want to see France . . . pushing the bounds of civilisation back and whether they are trying to prevent the railways from being completed, for their whole thrust seems to lead in that direction, so that the remaining payments are not met [and] they can then buy them back again cheaply[;] at the same time everyone can see with what enormous strides the railways are being developed everywhere else. I am, however, convinced that the opposition will not succeed in its aim. It is best if one simply lets them scream and talk . . . I am therefore not in favour of initiating legal proceedings which will only mean that this issue will be a permanent topic of discussion when the damned Augsburg and Cologne newspapers are always opposed to us. It would be best if one would make use of these other than as reading material.

  Contemplating the poisonous prose of pamphleteers like Dairnvaell, the modern reader is tempted to sympathise with James’s attitude. Yet it cannot be denied that the Rothschilds’ private correspondence suggests at least a degree of callousness towards the victims of the Fampoux accident. Accidents were regrettable, of course, but principally because of their negative financial consequences for the railway companies concerned. The development of this attitude can be traced back to the first minor accidents on the Saint-Germain line in the 1830s. When these led to a sharp fall in the price of the company’s shares, James blamed the press:

  The newspapers are astounded by the falls suffered by all the shares. They themselves are wholly responsible for this. Instead of behaving as they do in England where they don’t discuss any accident and provide statistics to show how rarely accidents happen on the railways—when Huskisson lost his life in Manchester the talk was . . . not that the railway was to blame—in Paris they do exactly the opposite. Whenever an accident occurs, every newspaper asks, “Who will now want to travel [by train]? Why are the police not dealing with this?” . . . I think that you will do well if you will arrange through Pereire for an article to be published against these newspaper articles to explain to the newspapers the true reason for the falls we have been experiencing. I see that there has been a drastic fall in the income from the St-Germain railway and this is probably the reason why.

  In 1842 an accident on another line persuaded James to postpone further negotiations for the Nord concession: it was decided, Nat reported, “to wait to see what damages will be awarded to the wounded & to the families of the Killed before entering into new affairs of this sort, you know in Paris the juries are very severe with those who are the direct or even indirect causers of accidents.” When “a meeting of Engineers” was “silly enough to recommend all sorts of foolish plans to be adopted in order to prevent the recurrence of accidents,” James immediately “called upon several of the Ministers & told them he would send in his resignation as administrateur unless they acted in concert with the direction of the railroads which they have promised to do.” Similarly, the collapse of a viaduct on the line from Rouen to Le Havre interested James primarily because of its likely impact on the share price.

  It would be wrong to suggest that the family’s response to the Fampoux accident was wholly lacking in compassion. “Poor people,” wrote Anthony when the news of the “stinking slip” first reached Paris. It was he added, “a thousand pities—as it will certainly do no good for the moment—it has certainly put me out a great deal.” James, it was reported, was “very much affected,” having used the line “only two days earlier” on his way to take the waters at Wildbad. But the true nature of their distress became evident in Anthony’s next bulletin to New Court:

  It is a thousand pities—as everything was going on so well. They took 27,000 fr[ancs] a day for the last four days & it is more every day. It has not stopped the working of the line & there are as many people as formerly. It will only require very great care. I cannot give you the reason of the Accident & you must have a little patience. In the meantime it is very unpleasant & it makes our head ache most famously . . . They talk of nothing else but of this accident, & you know what an impression it makes in Paris. The price of shares have [sic] fallen to 712 & I should not at all be astonished to see them lower . . . We have just received the accounts from Pereire who says that there were only 14 [killed] in all & that the accident is not so bad as reported.—In a day or two it will be forgotten but they will try to knock the shares down.

  Salomon’s reaction is also revealing. It was, he remarked, a “stroke of luck no person of high rank was grieved by the disaster, as the alarm about it would have been even stronger.”

  To be fair, the Rothschilds did not—as Dairnvaell alleged—act improperly. James protested that only days before the accident he had “left [the train] at every station and inspected the carriages and then let the train continue on its way,” a fact he was glad to see reported in the German press. An investigation into the cause of the accident was immediately undertaken and drivers were issued with instructions “to go as slow as possible over the places when there is the least danger.” Yet there is no escaping the fact that Anthony and his brothers’ primary concern was to limit the damage to the Nord share price by intervening on the Paris market, and resuming normal service on the line as quickly as possible. Anthony’s letter to Lionel of July gives an insight into his priorities in the wake of the disaster:

  There is a good deal of speculation going forward in the shares. The Baron has made so much money that they do everything that they can to make the shares fall. They spread all the lies, stories & God knows what else—The line is a most tremendously long one—it is quite new & of course as all new lines are it will require a good dea
l of time to get everything in to proper order—You cannot make a regiment of French frogs in a minute—They have that nationality that they think that they can do always everything better than others—I hope that they will listen to reason—& have a few people from England. They will write to you to night to engage 12 very first rate Engine Drivers . . . They have decided upon making the line wider in a great many places & put down more [sleepers?] and to support the rails & to have the line again looked at. This accident was a great misfortune—The shares would certainly have been 800 fr[ancs] . . . the receipts have fallen a great deal within the last few days—I do not much care about it as the whole affair will be able to be better organised & when once it is en train the receipts will very soon get up again.

  With the share price falling towards the 650 mark and receipts down 40 per cent, the Rothschilds naturally sought a scapegoat. By July 21 Anthony was claiming “that the accident was done intentionally & that it was got up by some people for the fall of the shares,” on the ground that twenty or thirty of the clamps holding the rails to the sleepers appeared to have been tampered with. One suspects this was wishful thinking. “I wish we could find it out,” he told his brothers in London, “but the people who speculate for the fall are such a set of Blackguards in this part of the world that I almost think that they got [it] done . . . [I]f it was the case it would be the best thing in the world for the company.”

  It did not prove necessary to develop this conspiracy theory any further. As the weeks passed, the traffic on the Nord line began to recover (beginning with the third class passengers), and with it the daily take. By the end of August the first freight trains had begun to run and—symbolically—the Nord timetable was published for the first time in Bradshaw, the rail traveller’s bible. Three months later confidence was sufficiently restored for Hannah to propose to her sons “a little Spec in [100] Northern shares”—a not unreasonable proposition when James could estimate gross profits for the line at 3.2 million francs. “It is a curious circumstance,” noted Mayer with heroic insouciance, “that on the Austrian line a dreadful accident occurred the very first day and now the shares are at 100 per cent premium which I am positive the French Northern will be.”

  This was hubris; and, in the light of the stark economic rationality of their reaction to the Fampoux accident, it is difficult not to see the revolutionary storm which was to break over the Rothschilds’ heads less than two years later as a kind of terrible nemesis. (Perhaps a more fitting nemesis came eighteen years later, when Lionel’s son Natty and his sister Evelina narrowly escaped serious injury when an express taking them from Paris to Calais collided with a goods train.)7 To vary the dramatic image, in deciding not only to invest in but also to construct and manage railways, the Vienna and Paris Rothschilds had made a pact which contemporaries saw in Faustian terms: they had harnessed Satan, as Eichendorff put it. Yet “Satan”—in the person of Dairnvaell—now turned on Faust. The public prominence which the railways had given the Rothschilds made them obvious targets for the new social revolution which was already in preparation.

  SIXTEEN

  1848

  Dans toute l’Europe il n’y a qu’un cris [sic]:

  a [sic] bas l’infâme famille des Rothschild

  NEMESIS

  Le peuple se vengera!

  Le peuple ne veut pas l’argent qu’il a perdu . . . mais le peuple

  veut le [sic] peau de les [sic] infâmes juifs.

  —ANONYMOUS LETTER TO NEW COURT, MARCH 1848

  The only thing we must aim at, is to maintain our name in honour, & for that purpose, one house must support the other with all its means & power, for the dishonour of one reflects on the other.

  —ANSELM TO HIS LONDON COUSINS, APRIL 1848

  “[T]here is no error so vulgar,” wrote Benjamin Disraeli in 1844, “as to believe that revolutions are occasioned by economical causes. They come in, doubtless, very often to precipitate a catastrophe; very rarely do they occasion one.” The succeeding four years were to prove him badly wrong.

  Unheralded by economic crisis, the 1830 revolution had seemed to the Rothschilds like a bolt from the blue. By contrast, the 1848 revolution came after such a protracted period of economic depression that they almost grew weary of waiting for the storm to break—and perhaps even began to imagine that it never would. If they did ultimately fail to prepare themselves adequately for what was the greatest of all nineteenth-century Europe’s political crises, the reason perhaps lies in the timing of the revolution. The economic nadir of the 1840s in fact came in 1847; by the spring of 1848 the worst was over. With hindsight, historians can infer that it was precisely at this point that political instability was most likely to occur, as popular expectations rose; but to contemporary bankers that was far from apparent.

  Another difference between 1830 and 1848 was the Rothschilds’ own position as targets of revolutionary action. In 1830 James had been sufficiently distanced from the regime of Charles X to allow a relatively easy switch to the Orléanist side. Eighteen years later he and his brothers had become much more closely identified with the established regimes not only in France, but throughout Europe. As bankers not only to the Austrian imperial government itself but also to numerous smaller states in Germany and Italy, they appeared—especially to the nationalist elements within the revolutionary movements—as the paymasters, if not the masters, of the Metternichian system. Eduard Kretschmer’s 1848 cartoon, Apotheosis and Adoration of the Idol of our Time, portrays “Rothschild” seated upon a throne of money, surrounded by kneeling potentates (see illustration 16.i)—a popular image of the period. At the same time, the Rothschilds’ financial commitments to these various states made it difficult for them to welcome the radical redrawing of Europe’s boundaries implied by the first principle of political nationalism—that political and ethnic or linguistic structures should be congruent. Writing in 1846, the poet Karl Beck lamented “Rothschild’s” refusal to use his financial power on the side of the “peoples”—and particularly the German people—instead of their detested princes.

  16.i: Eduard Kretschmer (after Andreas Achenbach), Apotheose und Anbetung des Götzen unserer Zeit (1848).

  Nor was it as easy for the Rothschilds to contemplate defecting to the side of the revolution when that now implied a republic rather than merely a dynastic change. And not only a republic: for the 1848 revolution was, unlike its predecessor, as much concerned with social as with constitutional issues. For the first time, socialist (as well as ultra-conservative) arguments against economic liberalism were voiced alongside—and sometimes in contradiction to—the older arguments for political liberalism and democracy. Not only were the revolutionaries concerned with rights (to free speech, free assembly and a free press) and with representation in constitutionally secured legislatures; some among them were also concerned to combat the widening material inequality of the early industrial era. In many ways the Rothschilds had come to personify that inequality. Nothing demonstrated that better than the explosion of anti-Rothschild sentiment in the wake of the accident on the Nord railway: while third-class passengers perished, the critics suggested, “Rothschild I” callously counted his state-subsidised profits. Another cartoon of 1848 which depicted Rothschild as the object of royal (and papal) veneration also featured, kneeling in the foreground, a ragged, starving family; and in the background a group of students marching under the banner of liberty (see illustration 16.ii). When the Russian revolutionary Alexander Herzen wished to define the bourgeoisie in 1847, he called it “a solid estate, the limits of which are the electoral property qualification below and Baron Rothschild above.” For Herzen liberalism was propagating a “malicious irony” when it claimed that “the destitute man enjoys the same civil rights as Rothschild,” or that “the sated is . . . the comrade of the hungry.”

  As in the 1820s and 1830s, those who inveighed against the Rothschilds as capitalists could rarely resist making a connection with their Judaism. Typically, Karl Beck too could no
t resist alluding to “Rothschild’s . . . interest-calculating brethren,” “filling the insatiable money-bag for themselves and their kin alone!” Nor is it surprising that minor figures like Beck were doing this when the man who would ulti-mately prove the most influential of all the period’s revolutionaries had done exactly the same in February 1844 in an essay “On the Jewish Question” (though at the time, of course, there was little to distinguish Karl Marx from the numerous other radical hacks churning out anti-Rothschild abuse):

  What is the secular basis of Judaism? Practical need, self-interest. What is the worldly religion of the Jew? Huckstering. What is his worldly God? Money . . . We recognise in Judaism, therefore, a general anti-social element of the present time . . . In the final analysis, the emancipation of the Jews is the emancipation of mankind from Judaism.

  16.ii: Anon., Anbetung der Könige (1848).

  Marx was not one to name names, of course, when he could couch his argument in Hegelian abstractions. But that he had the Rothschilds in mind is evident from the passage he quoted from the pamphlet by Bruno Bauer he was (ostensibly) reviewing:

  “The Jew, who in Vienna, for example, is only tolerated, determines the fate of the whole Empire by his financial power. The Jew, who may have no rights in the smallest German states, decides the fate of Europe.” This is no isolated fact [continued Marx]. The Jew has emancipated himself in a Jewish manner, not only because he has acquired financial power, but also because . . . money has become a world power and the practical Jewish spirit has become the practical spirit of the Christian nations. The Jews have emancipated themselves insofar as the Christians have become Jews.