The House of Rothschild

by Ferguson, Niall

  As Ferdinand’s letter to Dilke indicated, it was not just imperial issues which were shifting the Rothschilds away from Liberalism. Of increasing importance was their suspicion of the social policies advocated by radical urban-based Liberals like Chamberlain and Dilke himself. “[I]f I do not call myself a radical,” Ferdinand explained,it is that I consider it unworthy of great leaders of men like Chamberlain and yourself to court popularity with the masses by advocating such trivial measures as the abolition of the game laws for instance and stimulating an unhealthy desire for social and pecuniary equality the disastrous results of which have been only too well illustrated in France, instead of governing the people on broad principles and leading them into wider issues.5

  Even Chamberlain’s talk of compulsory purchases of land by local authorities to provide allotments for the working class alarmed Natty. The Rothschilds’ drift away from Gladstonian Liberalism reflected not only discontent with his lukewarm imperialism, but also mistrust of his party’s domestic political tendencies. One reason why the Irish question came to play such a decisive role in the politics of the 1880s and 1890s was precisely that proposals to improve the lot of Irish tenants awakened fears for the security of landed property in the minds of English landowners like the Rothschilds.

  Unionism

  Although some contemporaries tended to think of it as the first of England’s colonies, Ireland had been an integral part of the United Kingdom since the seventeenth century, with Irish MPs sitting in the Westminster House of Commons since 1800. It was not a place the Rothschilds knew well. They had no economic interests there; indeed, few members of the family had even set foot there. Anthony holidayed there with his daughters in 1865 and was favourably impressed by the natural beauty of some of the estates he visited. Ferdinand, who went there three years later, was less keen on the “extremely wild” landscape but found the people “most hospitable” —though he was bemused to be mistaken for a Catholic in Dublin. For most Rothschilds, however, it was terra incognita. Writing in 1865, Charlotte made it sound as remote and alien as the furthest-flung colony: a country of endemic “mismanagement,” of uncouth manners, rampant drunkenness and senseless violence. If Natty ever went there, no record of his visit appears to have survived.

  Yet Ireland proved to be of all the issues of the period the one which most influenced his political conduct. This was for two reasons. Not only did attempts to strengthen the position of Irish tenants relative to their landlords seem to threaten the rights of all property-owners; the idea of giving Ireland “Home Rule”—that is, some form of devolved legislature and government—also seemed to threaten the integrity of the United Kingdom and to imply a general decentralisation of power throughout the Empire. It was this dual significance of the Irish question which brought together such improbable political allies as the “Young Whig” Natty de Rothschild, the “Tory Democrat” Lord Randolph Churchill and the Radical Liberal Joseph Chamberlain, thereby shattering Gladstonian Liberalism and recasting post-Disraelian Conservatism.

  The first sign of a Rothschild revolt on Ireland came in 1880, when Natty joined a group of mainly aristocratic “Young Whigs” in voting against Gladstone’s Irish Land Bill, which sought to compensate tenants who had been ejected by landlords for non-payment of rent. Their objection was the principled one that nothing should infringe the sanctity of contract: as far as Natty was concerned, as he told Disraeli, the measure implied nothing less than “confiscation.” Natty was one of the six most consistent opponents of the Liberal leadership’s policy, voting twice against the Compensation for Disturbance Bill and twice for hostile amendments. This put him in the company of Whig grandees like J. C. Dundas, C. W Fitzwilliam and Albert H. G. Grey (later the 4th Earl Grey). When, in the wake of the December 1885 election (which gave Parnell’s Irish Nationalists the balance of power at Westminster), Gladstone began to consider the more radical solution of Home Rule, it was predictable that Natty would align himself with the scheme’s opponents.

  With hindsight, Gladstone’s conception—“the management [by] an Irish legislative body of Irish as distinct from Imperial affairs”—was a sane one, and might conceivably have taken the sting out of Irish nationalism at a time when opposition to “Rome Rule” in Ulster was embryonic. It envisaged an Irish parliament with only very limited powers, leaving defence, foreign policy and customs in the hands of the “Imperial” government, while removing or at least reducing the Irish representation at Westminster. If the Tories had been more far-sighted they might have offered Parnell something similar themselves (as indeed they thought of doing). However, opposition to Home Rule had more to do with the internal dynamics of British party politics than with Irish aspirations; at least, that is the impression given by what has survived of Natty’s correspondence on the subject.

  Natty had been dismayed by Gladstone’s renewed ascendancy over the Liberal party, which he had hoped to see led by Hartington (the quintessentially Whig heir to the Duke of Devonshire). In a cryptic letter on November 29, he told Hartington: “Gladstone’s name might well be changed to Ichabod,” enclosing an explanatory note from the Old Testament: “Eli’s grandson was called Ichabod or ‘The glory is departing from Israel’ being born after the defeat of the Israelites by the Philistines. Samuel Chap. IV, Verse 21.” Five days after Gladstone’s son had hinted at his father’s intentions for Ireland (on December 17, 1885), Natty had a meeting with Randolph Churchill at which he briefed him, for Salisbury’s benefit, on the likely Liberal split, explaining “that John Morley and Chamberlain were separated and that the former who had no money and only desired an official salary had definitely signified perfect obedience to the G.O.M.... that Parnell had got Gladstone tight and that the latter had committed himself.” The aim of this meeting was plain enough. Both Churchill and Sir Drummond Wolff (one of the other key figures in Churchill’s would-be “Fourth Party”) were already thinking of “negotiating for a coalition [with the Whigs] through Rothschild,” though Churchill’s ideas for increased political “fusion” or integration of Ireland with the mainland already struck many Whigs as alarmingly radical.

  The unanswered questions were which of the Whigs would be willing to desert Gladstone, and what the secessionists’ relationship would be with the Conservatives, who remained in office until January 30. Throughout the crucial months leading up to the decisive defeat of the Home Rule Bill on June 8, the Rothschilds acted as political go-betweens. On January 8, for example, Churchill was able to give Salisbury fresh intelligence from the Liberal camp courtesy of Cyril Flower, who had just heard Gladstone denounce Churchill as “an unprincipled young blackguard or something very analogous thereto”; and from Natty, who had told Brett “that Harcourt and Dilke were ... of the opinion that Mr Gladstone would abandon Home Rule and come round to his colleague’s views.” In order to encourage the dissidents, Alfred informed Hartington that Salisbury would be willing to serve as Foreign Secretary in a coalition led by him; there was, he was able to reassure Churchill, “no truth whatsoever in the respect of Hartington’s surrender; quite the contrary.”

  By March attention had switched to the position of Chamberlain, who for some time had been itching to break with Gladstone. At a dinner at Reginald Brett‘s, Balfour met Chamberlain along with two key Whig figures, Albert Grey and Natty. As Balfour told Salisbury, it was “openly assumed” by all present “that Ch[amberlain] was going to leave the Govt,” Gladstone having communicated enough of his Irish scheme “to convince Joe that he at least could not swallow it!” In the course of the discussion, Natty and Grey confirmed that there were plans afoot to hold “a big Anti-Home Rule Meeting in the City,” though neither Natty nor Chamberlain felt this would be helpful. The meeting nevertheless went ahead at the Guildhall on April 2; and at a second meeting at the Westminster Palace Hotel the following month Natty openly declared himself. It was his election on to a Liberal Unionist General Committee at this meeting which marked his final political break with Gladstone. Other promine
nt Jewish MPs who joined him included his cousin Ferdinand and Francis Goldsmid, but it was not really their Jewishness which was the decisive factor: the City establishment—including George Goschen, Revelstoke and many others—was overwhelmingly Unionist.

  As Alphonse suggested, the Rothschild desideratum was in fact “a Hartington-Salisbury ministry”: a coalition, in other words, of Liberal Unionists and Conservatives. However, this proved far from straightforward to achieve. Churchill and Natty were unsuccessful in their efforts to involve Harcourt in their schemes; while at a meeting at Waddesdon on June 13—five days after Home Rule had been defeated in the Commons—Chamberlain told Balfour that he regarded a Liberal Unionist-Conservative coalition as “impossible.” The most he was willing to offer. was “a definite and complete understanding with Hartington, and an adequate though less complete understanding with me” ensuring “a sufficient unity of action by means of consultations behind the Speaker’s Chair.” This was essentially Hartington’s view when Natty approached him three days later.

  The common goal of “getting rid of Gladstone” was achieved with a vengeance. The result of the general election of July that year was a “smash” for Gladstone and Home Rule: 316 Conservatives were elected and 78 Liberal Unionists, against just 191 Gladstonians and 85 Irish Nationalists. The defeat was especially heavy in Scotland—“ the old man[‘s] ... dung hill”—where Natty had urged both Churchill and Chamberlain to campaign. The swing away from the G.O.M. was also pronounced in rural constituencies like Ferdinand’s at Aylesbury. But Unionist harmony—captured by Brett’s memorable image of Churchill, Natty and Chamberlain “conduct[ing] the business of the Empire in great measure together”—was short-lived. It was easy to get “a large party of liberal unionists” to shoot together at Mentmore; less easy to get them to work together in government. As early as December, Salisbury, Churchill and Chamberlain were at odds over the government’s County Councils Bill; and Churchill himself resigned as Chancellor over the defence budget that same month. By February the following year, Natty was disillusioned with the government’s policy in Ireland—a combination of coercion and a new Land Act which he considered “most rotten.” “You will find your old colleagues worn out by nocturnal vigils and a growing demand for a strong Government in Ireland,” he reported to Churchill. He predicted that if the government did not “take care, a feeling will spring up that some form of Home Rule is preferable to the present disorder and discontent.”

  Natty’s real loyalty at this stage seems to have been to Hartington. What Natty, Churchill and Chamberlain agreed on, Brett told Hartington, was “the maintenance of the [Liberal] Unionist party. And on this account your wishes and opinions seem to be the prime factor in all their calculations ... the essential thing, as Randolph says, is ‘to keep the Gladstone gang out of office.”’ Employing a true landowner’s mixed metaphor, Natty suggested to Churchill in March that the Unionists would be content provided measures were enacted which they initiated or supported:Hartington is not Little Bo Peep and has not lost his sheep [meaning his supporters], he and Joe support the Govt most enthusiastically and energetically, both in regard to the Crimes Bill and the Great Purchase scheme which is to come at a later period. There are some horses remaining on the Turf whose parentage is doubtful, their dams having been covered by 2 or 3 stallions [that is, some legislative measures with a number of different sponsors in the Commons]. I should say, if I were asked, that the parentage of these . . . measures is dubious, but one of the sires is certainly Joe.

  When Edward Hamilton dined with Natty in August, he was told categorically that “Hartington will be Prime Minister very soon, and the Prime Minister of the real ‘Liberal’ party, of which the so called Conservatives are now the proper representatives. Hartington would never again be made to do the dirty work of the Radicals. He had repented ’eating dirt’ out of feelings of party loyalty.” However, Natty also revealed his own growing doubts about Chamberlain, who was still talking as if the old Liberal factions could be reunited:As to Chamberlain, he would never be a big man. He was a Radical wolf in Tory sheep’s clothing. He was the typical democrat—a spendthrift and a Jingo—a great contrast to R. Churchill who was quite a Peelite about economical and foreign matters. As to Mr. G., he was hopeless—never knew his own mind two years or even two months running; and a continual danger to the State.

  Small wonder a loyal Gladstonian like Hamilton bridled at this (though he could not deny Natty’s “wonderful knowledge of what is going on”). But it is intriguing that Hamilton’s next engagement was dinner at Mentmore with Rosebery, whom he now regarded as a future Liberal leader in the Lords, if not more.

  What was at issue, in other words, was nothing less than the fate of the Liberal party, with Hartington pulling one way, Chamberlain another, and Rosebery stuck in the middle trying to salvage something from the Gladstonian wreck. Certainly, Natty’s hope of somehow bringing Churchill and Hartington together on a “real” Liberal ticket was doomed by the former’s deteriorating physical and mental health; but at this stage it still seemed possible to avoid an outright takeover of the Liberal Unionists by the Conservatives. Why else did Natty propose to give Hartington money for Liberal Unionist election costs in 1890, and encourage Lord Derby to do the same? Nor was it unrealistic to assume, as Natty did in 1888, that Gladstone had been “ousted from power for good” and that “with Mr G. gone, Home Rule would die a natural death.” Even Gladstone’s political resurrection after the Liberal victory in 1892 proved fleeting; and Rosebery’s succession could be cautiously celebrated in the belief that his commitment to Home Rule and reform of the House of Lords was only skin-deep.

  Churchill and Rosebery

  Perhaps the most remarkable aspect of Natty’s role in the complex party politics of the 1880s was its remoteness from his concerns as a banker. For the first time, it might be said, a Rothschild was engaged in politics as a vocation for its own sake, with only the most tenuous connection between the debates over Ireland or social policy and his own interests as a wealthy landowner.

  Nevertheless, it is important to bear in mind that, while all this was going on, Natty continued to spend most of his working day at New Court; and as a banker his primary political concern was with foreign rather than domestic policy. Even as we try to uncover and reconstruct his role in the debates over Home Rule, we should remember that it was the diplomacy of imperialism which mattered more to him. How far were the Rothschilds able to use their political connections to influence foreign policy in this period? One way to approach this question is to consider their relationships with the two politicians of the post-Disraeli era to whom they were probably closest: Randolph Churchill and Rosebery. And here it is necessary to say a brief word about the most important of all Victorian Britain’s imperial possessions: India.

  Before 1880 the Rothschilds had not been much interested in India, though they did some business with firms there. When their relatives Gabriel and Maurice Worms had returned from Ceylon in 1865 after an absence of twenty-five years, Charlotte had been appalled not only by their appearance—“old, hideous anglo-caucasian Indians”—but also by their descriptions of life on a tea plantation. With its naked coolies, intense heat, snakes, elephants, porcupines and pearl-eating insects, it might have been another planet; the fact that the Worms had called one of their plantations “Rothschild” was a compliment, not a sign of the family’s financial involvement in the Raj. After 1880, however, that changed. Between 1881 and 1887, Charlotte’s sons were responsible for issuing Indian railway shares worth a total of £6.4 million.

  The departure of the Liberals and the appointment of Churchill as Secretary of State for India by Lord Salisbury in the summer of 1885 seemed to herald a blossoming of the Rothschilds’ interest in India. Contradictory as he was throughout his meteoric political career, Churchill now lost no time in establishing precisely the kind of relationship with Natty and his brothers in relation to India which he had earlier accused Gladstone’s govern
ment of having with the Barings in relation to Egypt. While planning the issue of a loan for the Indian Midland Railway, Churchill specifically told the Viceroy, Lord Dufferin, “If I am at the office next year ... when the loan is brought out I shall fight a great battle against [Bertram] Currie to place it in the hands of the Rothschilds, whose financial knowledge is as great as that of the Bank of England is small, and whose clientele is enormous.”

  Churchill’s biographer Roy Foster suggests that the Rothschilds did indeed help place the new company’s shares. Contemporaries also assumed that Churchill’s decision to annex Burma—announced on New Year’s Day 1886—was linked to his growing intimacy with the Rothschilds. As Edward Hamilton observed sardonically, “Jingoism is ... popular so long as it brings profit.” Certainly, they applied to take over “all Burmese railways and construct lines to the frontier” within a week of the annexation being announced, Churchill assuring Salisbury that they were “as keen as nuts.” The fact seems to speak for itself that in 1889 the Rothschilds were responsible for the immensely successful Burma Ruby Mines share issue—when the throng of would-be subscribers grew so large that Natty reputedly had to climb up a ladder to get into the bank, and the shares went to a 300 per cent premium. Did not Brett tell Hartington in 1886 that “Churchill and Natty Rothschild seem[ed] to conduct the business of the Empire in great measure together, in consultation with Chamberlain”? Did not Hamilton later observe (to Rosebery) that what had got Churchill “into trouble” was his “excessive intimacy” with “a certain financial house”? And did not Lady Salisbury “launch out” in conversation with Herbert von Bismarck and Rosebery “against Randolph who communicated everything to Natty Rothschild” and “hint that people did not give great financial houses political news for nothing”? The evidence of an excessively close relationship seems compelling, especially in view of the precariousness of Churchill’s personal finances. As is now well known—though his earlier biographers suppressed the fact—he died owing the London house “the astonishing sum of £66,902,” though he had also made some money on mining shares by following Rothschild advice.