PORTRAITS

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KARL S. WOERNER

TABLE OF CONTENTS

COPYRIGHT, 1929, BY DIAL PRESS, INC.

MANUFACTURED IN THE UNITED STATES OF AMERICA BY THE VAIL-BALLOU PRESS, INC., BINGHAMTON, N. Y.

FIVE MEN of FRANKFORT

The Story of the Rothschilds

By MARCUS ELI RAVAGE

Author of "An American in the Making"

With Five Portraits by KARL S. WOERNER

NEW YORK
LINCOLN MAC VEAGH · THE DIAL PRESS
LONGMANS, GREEN & COMPANY
TORONTO

1929

FIVE MEN OF FRANKFORT

CHAPTER I

JEW MEYER, CURIO DEALER

Was seen going up the narrow, cobble-stoned Jews'-Street of Frankfort-on-the-Main. Tradesmen and market women paused in their bargaining to glance at him, but did not recognize him. Tall and spare, with marked Semitic features, a short, pointed black beard, and a rabbinical stoop in the shoulders, he was clearly a son of the Ghetto. A certain good-humored look around the eyes and mouth suggested something familiar about him, and from the unhesitating manner in which he walked straight on before him he seemed to be at home in the teeming street. He had entered by the south end, the one nearest the center of town, and was proceeding steadily northward in the direction of the Bornheimer Gate, which was the poorer section of the Judengasse. Not far from the gate he turned right, halted before a house which had a sign with a crudely painted saucepan on it, and disappeared into the yard. Then only, the curious who had been watching him from their doorways remembered. Why, it was Meyer, "the little Bauer," the son of Amschel

and Schoenche, the unfortunate couple who had died within a few months of each other now more than eight years ago, leaving five young children homeless, parentless and with barely enough means for their rearing.

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Among the boys of the Ghetto before he went to Fuerth Meyer had been nicknamed "das Baeuerchen." Now he was a grown man with a beard and a shop of his own, his former playmates dropped the diminutive ending and Meyer, like his father and his grandfathers for generations came to be known as Bauer. He had no notion why his people were called that way. The word meant "peasant," and generally those who were tagged with it were ambulant traders who bought and sold among the village folk. But his father and also his grandfather had kept shops in the Judengasse and both had been money changers in a small way. Some remoter ancestor, then, had been the man with the pack. In any event "Bauer" was obviously a trade by-name, just as "Rothschild," the other designation of the family, must have come from the house with the red sign down the street. As legal names neither had any standing. Jews were not allowed the privilege and managed somehow to get on without it.

As a boy Meyer had sometimes gone with his mother to the old Jewish cemetery during the month of Elul to pay homage to the dead, and while his parent knelt and prayed at the graves he amused himself with spelling out the Hebrew names on the tombstones. A bright youngster with a taste for such things, it had not taken him long to reconstruct the family descent. At first the absence of a uniform name had stumped him a little, but the Jewish practice of giving the name of the dead man's father was helpful. Seven generations, stretching back some two hundred years, he had thus contrived to identify. Then the thread broke off, or possibly his remoter forebears had

laid their bones elsewhere. The earliest of his fathers was one Elchanan, who had died in 1546. In those far-off days the family must have been much more important and prosperous than it was now; for Isak, the son of Elchanan, had built the big house with the red sign in the more fashionable southerly end of the Judengasse. But fortune did not smile on the family for long. Two generations later there was a marked decline. Isak's grandson Naftali Hirz had sold, or lost, the ancestral home, and had been obliged to move to the humble quarters in the rear of the Saucepan, where his descendants had continued ever since. Things dropped still another peg with Kalmann, in the next generation; it was he who was the first "Bauer;" and though there had been some slight upward movement since, the family had never again lifted itself to the level of old Isak.

On the whole, the Bauer-Rothschilds had been successful people. If none of them had ever amassed great wealth, neither had they quite sunk to poverty. Through all the ups and downs of two centuries they had remained independent merchants of the middle grade. Many of their neighbors, it was true, had soared away beyond them in riches and importance, but then equally as many had fallen below them. They had kept an even, if modest, tenor throughout. No scion of the Saucepan or of the Red Sign had even become a leader in the Ghetto, or intermarried with its first families, or got a foothold in the princely courts of the region; but on the other hand, none had ever fallen back into the classes that worked with their hands. Neither scholars nor rabbis nor great merchants distinguished the family. Plain, pious, substantial tradesmen, without influence or pretensions, sometimes more

prosperous, sometimes less—thus they had begun and thus they seemed destined to continue. Their fortunes were perhaps as low now as they had ever been. The sudden death of poor Amschel, before he had reached his full powers or provided for his dependents, had left his estate in chaos. It was for his sons to restore it to order.

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Indeed, his homesick imagination had played tricks on him and had led him to expect much more. In the Englishowned city of Hanover Jews were so much freer, business was so much less hobbled, that he had almost forgot what the Frankfort Judengasse looked like, and had come to fancy it in Hanoverian colors. The House of Oppenheim, though his own functions in it were lowly enough, was a great export and banking firm. It occupied a dignified building. Its personnel, down to the humblest clerk, were decently dressed and well-groomed. Its business was for the most part with merchants, German and English and Dutch. Very little merchandise was actually handled on the premises; nearly all the trading was done with pen and paper. Yet he had thrown up that paradise and had come back here, because Frankfort was accounted the greater center, almost the leading commercial city of the Continent. He was horribly disillusioned.

It was some time before he could adjust himself and see a way of cooperating with his brothers. No team had ever been recruited out of material so ill-assorted. Their schooling, their ideas of business, their training, their very speech, were poles apart. He had come home with a vague idea of setting up an Oppenheim's of his own in Frankfort. That firm had also started with three brothers and had come up from small beginnings. But now he took stock of his resources and was profoundly discouraged. How was he even to make a start without capital or credit or connections and, what was worst, with such hopelessly crude assistance? When he came right down to it, moreover, his own knowledge and experience were distressingly limited. He made himself no illusions on that score. Held down by his Hanover employers, he had barely got a smat-

tering of the more vital phases of the business. He knew all but nothing of banking or the commission trade. His eight years of service had only taught him how complex the affairs of a great concern were, how involved was their technique, how vast were their capital and credit requirements. Of the general conduct of the house he had not even got a glimpse. Only toward the end he had been allowed to stand at what might be called a responsible counter, and then it had been the rare coin department, the most negligible of the firm's specialties. It had no more real bearing on his ambition than a beard and earlocks had on the rabbinate. What he had dreamed of was that his brothers would second him with at least as much training as he had. But alas! These raw old clo' men, with the speech, the manners, and the outward refinements of junk dealers!

IV

He went to work patiently to make the best of a bad situation. It was no good complaining. His brothers were not to blame: they were what circumstances had made them. Happily they and he were young men, and with energy and persistence the bad turn that fortune had played them might yet be repaired. For the moment common sense as well as necessity dictated but one course: to go along with their simple resources, work hard, not force things and keep an eye on the future. Moses and Kalmann had, after all, done the sensible thing when they had gone into a business that they knew. Meyer decided to do like them. He understood rare coins and allied trinkets—medals, curios, old jewelry, and a little of an-

tiques generally. Very well, he would start with that. When all was said, the two trades—his brothers' and his—were not so very far apart really. Curios and antiques were in fact nothing but a sort of gilded junk. There was not much more than a step from one to the other; he would groom his brothers to bridge it. At present they bought up the contents of Ghetto homes; they must gradually take to going out into the city and do the same with burghers' villas and the mansions of the gentry. Men who could appraise pine tables and earthenware dishes would learn readily enough to judge mahogany cabinets and feather-beds. No doubt, the city clientele would find Moses and Kalmann a bit unpresentable. Well then, he, Meyer, would do the talking, not only for the pictures and heirlooms and fine pieces but for the entire collections; the younger men would be coming along merely as his experts for the plainer things.

The plan, on being tried out, worked better than Meyer had hoped. The two trades dovetailed admirably. Householders in town who wished to sell out preferred to dispose of their goods to a single buyer; and the richer class of Ghetto dwellers, hearing that the rear-shop at the Saucepan dealt in high-grade stuff, soon crowded out the humbler custom. Meyer's presentiments, also, that the noble purchasers of his rare coins and medals would mix badly with his brothers' clients, proved groundless. For as experience showed, gentlemen rarely went bargain-hunting in the shops; they expected the dealer to keep them informed thru bulletins and to bring his wares to their homes.

The brothers thus found themselves running two separate businesses. Moses and Kalmann still operated a Judengasse shop, except that the quality of both goods and custom were greatly improved. Meyer, however, was seldom about. His velvet-lined case filled with quaint jewels, old gold and silver medals, rare coins and kindred objects, he spent the better part of his time on the stage coaches between Frankfort and near-by places, following up inquiries elicited by his catalogues. The Saucepan shop with its living quarters in the back served him merely as a base and an address. A small display near the entrance, alone informed callers that the firm had interests of a nobler sort. Traveling about, too, enabled Meyer to keep abreast of sales, not only of the genteel and costly objects for his own trade but of the mundaner ones for his brothers as well. And as the younger men by degrees acquired an understanding of coins and curios, Meyer likewise learned to judge and evaluate house-contents, so that in time he became the exclusive buyer, while his brothers gave their whole attention to the inside trade.

Twice a year Frankfort had a great fair, which brought together merchants and holiday makers, Gentile as well as Jewish, from all parts of the empire. All these strangers had money to spend, and most of them had drafts or currency to exchange. For though nominally one country, Germany was at this time a riot of independent kingdoms, dukedoms, principalities, so-called free cities and every other species of petty state, vaguely held together by a common language and tradition, theoretically united under the decayed Holy Roman Empire (which was neither Holy nor Roman nor an empire) and in fact chronically at war with one another. The political confusion expressed itself in a tangle of frontiers, restrictions on travel and trade, and a chaos of monetary units. Each princeling

possessed, and most of them exercised, the right to coin his own money, which his neighbor felt free to, and usually did, declare unacceptable. Thalers of half a dozen different weights and values, as many kinds of florins, ducats, carolins and what not circulated in their respective and very narrow domains; and a merchant or a traveler going half-a-day's journey from home must convert his money into the legal tender of the "foreign" land in which he had arrived before he could have his lunch. In this state of things nearly every tradesman was a money-changer on the side. The larger the business, the bigger the "Wechselstube." Virtually all the bankers of the period began as merchants in goods, developing the two businesses simultaneously, and rarely divorcing the one from the other till half a century or more later.

The Frankfort fairs and the currency chaos and German disunity were not lost on Meyer. A smattering of finance he had brought with him from Hanover, capital was accumulating in his till, and customers from out of town were being turned away by his brothers at the shop for lack of local cash. So he hung out a "Wechselstube" shingle and initiated his partners in the mysteries of exchange and note discounting. Sooner than he had hoped on the day of his return home, the business began taking on the aspect of his late father's establishment. In the curio shop back of the Saucepan was laid the first stone of the banking house of Rothschild.

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On taking their first annual inventory Moses and Kalmann discovered, what they had long suspected, that their elder brother's combination was pretty largely decorative. The firm was kept going and thriving, not by the art and the antiquities, but by the lowly traffic with the inhabitants of the Ghetto. They did not complain; they were aware of the value of prestige; but they did submit the question to Meyer whether this commodity might not come a little too high. All told their balance sheet showed a net profit of some five thousand florins (about two thousand dollars) for the year, of which four-fifths had been yielded by the shop and no small fraction of the remainder by exchange operations. Considering that Meyer knew as much now as his brothers about the main business, and that the "Wechselstube" was his creation, would it not be at once more profitable and less laborious if he were to give up most of his traveling and devote his energies to the shop and the bank? What with his ability as a buyer, the connections he had established in the country around and the expansion of the exchange department, the business could easily double its earnings next year. Why not let the genteel trade go hang?

But Meyer was looking to the future, and there were aspects of the rare coin and medal business which his young partners overlooked. It was not merely immediate prestige he was thinking of; he was investing in a career for the years to come. Thus far he had made barely more than a start; the clientele he had gained was among the minor gentry only. But things were coming along nicely, and it would not be long before he planted a foot in the châteaus and palaces of the sovereign princes themselves. Within fifty miles of Frankfort lay half a dozen reigning courts, and each little monarch whiled away his boredom by collecting one thing or another. There was Hanau, just

a stone's throw away, and Cassel and Darmstadt and Weimar, and a number of others. He was even now sending them his catalogues; on some of them he had already called in person; at Hanau he was in touch with a courtier or two; soon the doors were bound to open. And then,—ah, then affairs would turn a corner and no mistake.

So Meyer packed his case with the finest specimens out

V

One rich prize he did carry off from his court dealings. The moment he got his foot inside he began begging for a bit of a title. In eighteenth-century Germany men did not modestly sit about for honors to come to them; they

pulled strings, and at need asked for them outright. What was the good of being a court-Jew, however diminutive the highness and insignificant the services, unless one's friends, neighbors and competitors could be made to see the distinction on one's shop sign, catalogues and the like? Glory aside, moreover, having one's palace connections bodied forth in some visible form was equivalent to a permanent passport and spared one annoyance at the hands of frontier guards and officials. Meyer, therefore, sought the aid of the friendly courtiers at Hanau, at Weimar, at all the courts where he made a sale, and on being told that a direct application to the sovereign lord was required by etiquette, he sat down and flourished off a letter to his noble patrons. It ran thus:

"It has been my particular and high good fortune to serve your lofty princely Serenity at various times and to your most gracious satisfaction. I stand ready to exert all my energies and my entire fortune to serve your lofty princely Serenity whenever in future it shall please you to command me. An especially powerful incentive to this end would be given me if your lofty princely Serenity were to distinguish me with an appointment as one of your Highness's Court Factors. I am making bold to beg for this with the more confidence in the assurance that by so doing I am not giving any trouble; while for my part such distinction would lift up my commercial standing and be of help to me in so many other ways that I feel sure thereby to make my way and fortune here in the city of Frankfort."

It was a form letter, and went broadcast to wherever it was likely to do good. Meyer rather believed and hoped that, with his reputation for munificence, it would be the Duke of Weimar that would grant his wish. Hanau might be richer in prospects and more conveniently located, but Weimar was a bigger palace and its badge would carry more weight. But the Duke's eye noted the faulty grammar and the little Jewish touches that all Meyer's efforts could not prevent from creeping into the German, and did not reply; while the business-minded young monarch at Hanau considered that, as Meyer had naïvely blurted out, a humble title was a rather inexpensive way of buying the good will of a tradesman who might be grateful enough to shave down the note discount rate and the prices of medals in future deals. In any event, William graciously complied; and on the first day of autumn 1769, the Judengasse beheld a new sign hanging over the house at the Saucepan bearing the arms of Hesse-Hanau and underneath, in gilt letters, the German equivalent of "By Appointment." And Meyer invested in a wig and pig-tail, donned a three-cornered hat and pinned a lace-jabot under his coat-front.

It was not precisely a title of nobility, but the effect of it—on Meyer, on his brothers and on the community—was tremendous. The young men themselves saw in the portentous event so sure an earnest of greater things to come that they at once began negotiations for purchasing a fraction of the building in which their home and business was housed, and two months later actually acquired a modest quarter-share. Neighbors, friends and business associates were profoundly impressed, and came around to offer congratulations and assurances of future success. The Judengasse match-makers saw the light, and became active. Fathers (and especially mothers) with marriageable daughters, not all of them in the northerly half of the street either, took notice. Not only Meyer but his brothers also shone in the blinding halo. Matrimonial offers of an incredibly flattering nature were brought to Moses and

even to the youthful Kalmann, to say nothing of their distinguished elder brother. Wolf, son of Salomon, known by the by-name Schnapper, a solid merchant with a thriving shop near the southerly gate, thinking better of Meyer's long-standing attentions to his pretty seventeen-year-old Guetele, consented to the betrothal, and the wedding was celebrated before the summer was over. Shortly after it was the turn of Moses. The good people of the Ghetto stepped along. It was not every day young men of the street became recognized court purveyors. Whatever their past, the Rothschild-Bauer boys had a future. It was as well to snap them up before they got too big.

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Meyer led his bride back to the bachelor quarters behind the shop, and there Guetele kept house for her husband and her rapidly increasing family for sixteen years. Within the year their first child was born, a girl who according to the pious Jewish custom was named Schoenche after Meyer's mother (presently to be changed to Jeanette). Then followed in quick succession three sons—Amschel (the future Anselm) so named in memory of Meyer's father, Salomon (the later head and founder of the Vienna banking house) and Nathan, the genius of the family and the architect of its greatness—and two more daughters, Belche (Isabella) and Breinliche (Babette). Not till Kalmann's death, in 1782, when Meyer was left in sole possession of the shop and its adjoining living quarters—Moses having withdrawn at the time of his marriage—did the young Rothschild have enough space to breathe in. It was not only that Meyer's affairs failed to keep pace with the

growth of his progeny; the housing shortage in the rigidly circumscribed Jews'-Street was chronic. For ten years, by which time the family had increased to a half dozen, they must prepare meals and consume them, work and sleep and receive guests in those three rooms (counting the shop) which constituted the ground floor of the Saucepan rear-house; and after that all that Meyer could contrive to add was but a further eighth-share. Unless a family died out or emigrated (and that did not happen often) there was no leg-room to be had. Every inch of building ground in the Ghetto had been occupied a hundred years before Meyer was born.

But Meyer's affairs had begun to stagnate. The splendid promise of the year before his marriage remained unfulfilled. For nearly nine years the firm's income continued stationary, without Meyer's share rising above twenty-four hundred florins (less than a thousand dollars) annually. The shop held its own; the exchange counter spurted forward a bit; the coin and curio business declined decidedly. Was it Moses's defection and Kalmann's death that had sapped the concern's vitality? Doubtless Meyer was hampered for lack of his brothers' competent and reliable assistance. He had neither the energy nor the interest in the shop of his juniors. Still, the stagnation had set in before the separation. It seemed as if the firm had gone as far as it could, that it was running on as satisfactorily as it did on sheer momentum but would never make any further progress.

For Meyer's first choice of a calling was the right one. At heart a scholar, he had chanced to fall in with a business that tallied with his gift for learning. Rare coins, medals, heirlooms, curious jewels and antiques interested him quite

Guetele was not unhappy at the change. A warm-hearted, cheerful, affectionate young Jewish woman of the old school, she took great pride in the scholarly tastes and attainments of her husband. She loved having him near her, particularly in the long winter evenings after the shop was closed and the children were asleep. Then Meyer would take down a tome of the Talmud, and while he hummed the sacred words she would sit beside him knitting or

mending. Why strive and pursue after vain ambitions? They were better off than most people in the Judengasse. Meyer had started with empty hands, and here he was the owner of a thriving establishment—not certainly a bigwig in the Ghetto, but a substantial and respected merchant of the middle rank. Their children were bright and good and strong, a credit to their parents. What had they to worry about?

And then before their seventh child was born, the miracle happened: a family did move out of the Judengasse and Meyer bought an entire house for almost twelve thousand florins. It stood on the edge of the street, too, not in a court, about half way between the two gates. Four stories, a spacious shop, an enormous cellar under all, and ample elbow room, they were as comfortable as princes. In this house "At the Green Sign" (zum gruenen Schild) four more children were born to the couple, and though Guetele lived to see her sons richer than kings and the possessors of palaces in Frankfort itself and in several of the capitals of Europe she and Meyer spent here the remainder of their days.

There were times during these quiet idyllic years when Meyer, recalling the ambitions of his young manhood, grew restless and discontented. Slowly middle age was creeping up on him; his boys were growing up in the crude, untutored environment of the Judengasse. What were they going to turn into? Plain, humdrum tradesmen like himself, without even the meager schooling he had received away back in Fuerth. Frankfort, or at least the Jewish part of it, was all business, and he had not the means to remove them to some purer, loftier, more thoughtful atmosphere: there were too many of them.

Enough Hebrew for piety, a bit of commercial calculating, hardly enough German to write a respectable letter—it was all the Talmud Torah of the Ghetto had to offer. How far would they ever get with such an equipment? And what had become of his young dream to be the father of scholars? His efforts to supplement their teachers' instruction seemed to fall on stony ground. The boys had no taste for learning. Keen and alert at the exchange counter, their attention drooped over a page of Rashi, and a fine-spun casuistical argument from the Talmud put them to sleep. It was almost too late: the Frankfort Ghetto air had got into their bones.

At such times Meyer would shake himself out of his lethargy, fill his medal case after his family had retired for the night, and arising with the sun hop on the stage-coach and go haunting the palace gates of his neglected clients. It made him feel young and fiery again, to sniff the air of courts, to spread out his rare coins and curios, and discourse learnedly on the origin, the previous ownership and the strange destinies connected with each piece. He felt transported to a higher plane, to the world he belonged in. Now and then he would make a sale, and for a moment he would feel an inner excitement and resolve to throw up his cosy, stifling shop altogether and be on his travels once more. But he would return home wearier and more resigned than he had started. He had his escapade, had taken a draught of the stimulant he craved. But alas! there was no sustenance in it, and he was the father of ten children. To live and rear a family on the beloved trinkets was unthinkable; the great courtly business to which they were to open the way was a forlorn hope; it was useless.

The one prince from whom he once expected everything he had now cut from his itinerary altogether. Young William of Hanau was much too shrewd and trying a personage to do business with for Meyer's gentle temper. What vistas had not he opened up, away back in '69, when he so readily granted the title others had refused! But almost immediately disappointment had followed. For that sly serenity meant to be forever rewarded for his munificence. He expected dealers whom he had honored to sell him their goods at a loss, and he was not above having his courtiers say so outright. For the better part of twenty long years, therefore, Meyer had given Hanau a wide berth. And then, in 1785, William had succeeded to his father's throne in the somewhat distant seat at Cassel, and the once hopeful connection seemed broken for good.

And yet, had Meyer had the gift of looking into the future, he might have seen that his early vague intuition about Hanau was well-grounded, and that the young Landgrave was some day to make the fortune of his house. He had no such gift, and it was a long time before he could bring himself to approach the imposing palace on the Wilhemshoehe at Cassel

CHAPTER I

PORTRAIT OF A PRINCE

had made nearly every sovereign in Europe, from Britain to Russia, his debtor.

Spartan simplicity, and astutely reinvesting his gains in safe British government bonds, he had succeeded in amassing the largest private fortune since the time of the Fuggers. With his money, his military prowess, his family connections and what he mistakenly took to be his political capacity, he was on the point of attaining the goal toward which his predecessors had striven in vain.

a self-contained model husband. He failed, and his failure destroyed his self-respect and the bases of his happiness. But worse things were in store for him. The kindling ambition of his career, the hope to wear a royal crown, which was the key to his toilsome, contradictory, pathetic and somewhat preposterous life, was never to be realized, and he died a disappointed man.

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in the dark, the compromises, the deceptions, humiliated him. He made a clean breast of it to his wife. There were tears, mutual forgivenesses, reconciliations. But presently he slipped again. His susceptible nature craved beauty and affection, and his timid, melancholy, passionless, disfigured wife was unable to give them to him. He had four children with his new concubine—a robustious daughter of the people who had known how to "spread her net" for him. He hated her and himself; she was "common, ignorant and vulgar;" their relations were "loveless and wholly carnal;" and after repeated resolutions and backslidings, he cast her back into the obscurity whence for a period he had raised her up, and nothing more was heard of her.

He believed he was cured, but within the year he was in the toils of a new and violent passion. Rosa Wilhelmina Dorothea Ritter was educated, well-born, clever, and she demanded that her status be recognized without ambiguity. She was offering up her girlhood, her beauty, her future, and she must have something in return. He bought her an estate, he conferred a title of nobility upon her and their eight children, he gave himself wholly to her and neglected Caroline utterly. It was not enough; he must put her right in the eyes of the world. She bobbed up suddenly at an officers' ball, and made her lover acknowledge her publicly. When he did that none too graciously, she insisted on being received at court. He yielded again, and the Princess was outraged. There was open talk of a separation, the palace buzzed with rumors and alarms, a clique formed to champion the affronted wife. By this time, however, William's conscience had adjusted itself and his self-approval returned. He saw himself as no longer a sinner, but as a much-tried unloved husband who had

a right to live his life and seek happiness where he could find it. Once and for all his wife must understand that it was she who was to blame for their ship-wrecked love. He came down in shining armor upon her and her defenders, scattered the clique and forced her to accept the situation. Thereupon calm was reëstablished. Caroline must take what satisfaction she could as the official consort and the mother of His Serenity's legitimate issue. And then, just as everything began going smoothly, Frau von Lindenthal (née Rosa Wilhelmina Dorothea Ritter) had the effrontery to cast lustful glances upon a young officer in her lover's employ. William's long-suffering patience snapped. He deprived the ungrateful hussy of her estate, her title and her children, and banished her forever from his sight.

Within a few months came the grand passion of his life. He was by this time a man of forty-four, while Juliane Albertine von Schlotheim was only nineteen. For a space this thought made him hesitate. "I had nothing to offer her but the heart of a married man twice her age;" but his scruples soon vanished when "my love and the dear creature for whom I felt it met in a devotion so tender, so true and so enduring as I had never known before." Enduring it certainly was, and William at least never questioned its depth and sincerity. Insofar as a woman's love could satisfy his restless, ambitious soul, he was happy with her to the end of his life. Toward no one else, surely, was he so generous and so trustful as toward her. He suspected and quarreled with his father, his wife, his son, his ministers, his financial advisers; but the radiant beauty who filled his prime and his old age with joy, who stood by him in his misfortunes and followed him into exile, had his whole heart and his unreserved confidence. Without her

asking it, he established their relationship from the outset as a mariage de conscience; her own tact and modesty made it easy for the Princess to receive her; and when the first of their nine children was born he settled her in a palace of her own and gave the emperor no peace till she was made a countess.

It has been said that William did not know himself the exact number of his offspring. As a matter of record, there were four by the first liaison, eight by the second, and nine by the Countess von Schlotheim, in addition to the three legitimate children of the Princess. Each of his families had its own name and title, and for each he provided as befitted his station. An augmented tax on salt enabled him to meet the extraordinary burden, and gave his subjects the opportunity to share it with him. The daughters born without the law married almost as well as their princely sisters; of the sons many lived to be generals and ministers in the service of numerous German states. The notorious Austrian General Haynau, the suppressor of revolts in Hungary and Italy, who as the "Hyena of Brescia" narrowly escaped mobbing in London, was the most noted of them.

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Comfort, delight, even ecstasy, his concubines and their prolific progeny gave William. They did not fill his heart. Women were the playthings of life, the rewards and relaxations of a busy man. He would have despised himself as an idler and a fribble if he let them absorb him. He was an ambitious monarch, and he wanted to be king over a greater Hesse than his predecessors had left him. Even his enormous wealth, its administration and expansion,

The French Revolution came, and three years later the leading German princes met in conclave to free the imprisoned Louis XVI and crush his rebellious subjects. William had no stomach for the enterprise; but if he was to participate, his vanity demanded that he be made commander in chief, and his avarice that the Hessian troops be paid for. He yielded on both points because the king of Prussia and the Emperor agreed to do their part toward

winning him the coveted hat. Five years later he allowed Prussia with his eyes open to outmanœuvre him in the secularization and partition of the spiritual princes' dominions, on the same ground. Time and again the exposed position of his country and prudential regard for its interests bade him go over to the side of France, especially after the advent of the Consulate; but he dared not displease the Emperor, lest he endanger his chance for the electorship and the grand goal toward which it was the stepping-stone.

Finally in 1803 he bagged it. And then to his vast disappointment and disgust, it turned out that he had labored and intrigued in vain. One year later Napoleon proclaimed himself the successor of Charlemagne, and the Holy Roman Empire—after existing for a thousand years—was abolished. The new Elector William I of Hesse-Cassel never voted for an emperor at all.

IV

This evil turn from the master of Europe was but an earnest of future incompatibilities. Worse was to come. From the first William was outraged and scandalized by the high-handed doings in France. The Revolution burst rudely upon all his hopes and schemes, violated everything that he cherished and believed in, and encouraged everything that was obnoxious to him. At heart he still thought of himself as an old-fashioned husband and father, and the rebels flouted the sacredness of the family. He dreaded and detested the new abhorrent fashions in theology, in government, in costume and hairdressing. Nor did the monstrous business stop there. In 1792 a French army

led by General Custine bombarded Frankfort and in the very shadow of his palace launched a proclamation to his subjects calling upon them to cast off the yoke of "the tyrant, the tiger who sells your blood to fill his purse," and describing his subsidy transactions with England as "this commerce in troops." The abusive phrase caught on and popular discontent rose to a high pitch, so that he was obliged to adopt counter-measures. He commanded the pastors to preach in their churches the virtues of docility and obedience and the holiness of the "good old German traditions" of absolutism. By way of ridiculing the new modes he ordered that the jail population be shorn of their pig-tails and, accoutred in pantaloons and stiff round hats, set to sweeping the streets. And when next year he again sold twelve thousand soldiers to Britain he voluntarily decreed a general reduction in taxes.

Not for a moment did he believe but that the upheaval was a passing mania, engineered by crazy agitators, without roots in history, without social significance and without a future. The advent of the Consulate only confirmed this opinion. Not that he perceived the genius of Napoleon. From first to last he saw in him nothing but a lucky adventurer. But he felt sure that "so despotic a general" could not bring the misled French people to their senses and make them wish their old rulers back. Even the long series of brilliant victories culminating in the proclamation of the empire did not sober him. Geography and the logic of events and the timid hints of his advisers impelled him into an alliance with the new powers, but he could not and would not conquer his aversion for "the usurper" and went on putting his trust in blind Prussia and bankrupt Austria.

So, without positively declining either offer, he decided to steer a middle course. Neutrality had its joys as well as its dangers, and it appeared likely to be the most remunerative policy to boot. In the back of his head the notion that Napoleon was a bird of passage had taken firm root. Who knew? Perhaps by the time he had come to a decision the struggle would end and he would gain both worlds. In

With one exception, nothing so auspicious had yet occurred for the future of the Rothschild family.

CHAPTER III

THE BOYS

Meyer's third son, for England.

The family had not been long in the house with the Green Sign than Meyer was obliged to take stock of his situation. By and large, the inventory was not encouraging. The purchase of the home had made a deep hole in his capital. His responsibilities were increasing, while his affairs barely held their own. A seventh child had come, an eighth was expected, and space was once more becoming a problem. What with the shop occupying the street floor, the growing family had all it could do to keep up appearances, without so much as thinking of comfort. What he ought to do, what was sorely needed, was to separate residence and business altogether. It was not a question of luxury. Poor, tired Guetele had not a fit place to do her work in. At night, after the children had gone to bed, she must mend and darn in the shop. And that was not all. Schoenche, their eldest, was seventeen, nearly eighteen, and should marry. The match-makers of the Gasse were busy with offers; but there was not a proper sitting room in the house to receive either them or the

Finally, there was Amschel, the eldest of the boys. Not

that he was a problem exactly. The youngster was alive with energy; and he had brains. Long before he had been confirmed, he had begun turning his hand to things. At first it was helping in the shop; then he took to running out into the market on his own, buying and selling whatever came along, cotton-cloth for the most part. It was good business, too; the difficulty was capital. If he had money or credit, it might really be a big thing. As it was, he could only make commissions, middlemanning for those who had.

But the boy did have brains; or at least he kept his ears open. Out among the tradesfolk he had heard talk: to wit, that the Poritz, the Landgrave at Cassel, was handing out English drafts—interest on securities he had there—to various merchants he trusted; some of them were Jews even; and he did not want them cashed right off, for fear of depressing the exchange rate; so he left them with the merchants till Frankfort Fair time, which might be six months off, free of interest. Now this Landgrave, wasn't he the Poritz father knew, the man who gave father a title once, twenty years ago, because he had sold him some coins and trinkets? He was, indeed! Well then, it was like this: the free use of capital was one thing; but besides, there were the cloth dealers from Manchester. They had to be paid in drafts on London. Why not pay them with the Landgrave's interest checks, and save the discount both ways?

If only father would take a trip down to Cassel and warm over the old connection!

So Meyer packed his medal case again and hopped on the stage that went from Frankfort to the Hessian capital. The boy was right: it was an idea. Why hadn't he thought of that himself all those years? It was better than all the court-business he had been angling for and never got. With his past services and his Court-Factorship for prestige, he ought to get a chance easily. And then the dowry for Schoenche and the launching for Amschel and the younger boys!

It did not go quite so fast as all that. His Serenity—without, of course, admitting the tradesman to his presence—did surely enough take the trinkets Meyer brought down for his inspection. The prices were too temptingly low. He even made a shrewd guess why the Jew was so generous, and sent out word that the next time he had checks to cash he would see to it that Meyer was remembered. But that, for the time being, was all. Meyer went back to Frankfort and sat down hopefully to wait. He waited for an entire year, but the court did not remember.

It was risky, but Meyer saw no other choice than to remind Highness of his promise. So he wrote him a letter recalling the services he had rendered back in Hanau, the low discounts he had been content to work for, his punctual payments, and his loyalty and devotion. He was, he declared, again prepared to match the highest bidders, to be grateful for the most modest credit allowance, and to be in all ways His Serenity's most faithful humble servant. After all, he concluded, I am not exactly a stranger to Your Princely Serenity, having these many years enjoyed the distinction of being a Hessian (which sounded better than Hanau) Court-Factor. Upon all these asseverations "the records of the Most-High Princely investment

office and state treasury department will not fail to bear me out, and I have no hesitation in referring myself to them."

The upshot of all this research was that the court, after months and months of further delay, graciously resolved to redeem its promise by authorizing for the petitioner a credit allowance of one thousand pounds sterling—the next time a batch of drafts arrived from London. In the closing months of 1789 checks in the amount of eight hundred pounds actually were turned over to him. It

was by that time nearly two years since the hopeful transaction with the medals.

I

But the greatest thing was yet to come: Two years later Nathan, the third of the boys, suddenly decided to go to England. It frightened Meyer at the time. He had taken the young man with him to look at the Manchester dealer's samples; and before he knew what was happening, some hot words had been exchanged between the two, the Englishman had snapped his cases shut angrily, and was showing father and son the door. Lord, but this was serious! The family's whole prosperity and future was bound up with the textiles, and the dealer knew it—that, and also that he had the entire Frankfort market in his pockets; no competitor touched the town. The Revolution and the strained relations along the Channel made trade too hazardous for very many merchants to venture over to the Continent; with the consequence that the few who still did come across had things their own way.

But the high-spirited Nathan did not seem disturbed in the slightest.

To the salesman he flung back over his shoulder: "I don't want your shoddy anyhow. I know where to get stuff as well as you do."

Then he reassured his parent: "It is all right. I am going to England tomorrow. I'll send you all the cloth you want." And he kept his word.

That amazing youth of 21 had hardly had time to get his bearings in the alien land and to pick up the most fragmentary smattering of English—in all his forty years of residence he was never to lose his Judengasse accent—than he had begun showing what he was made of. In less than a year he had tripled the little capital he had brought with him. For the present he was confining himself to cotton cloth for export to Frankfort. But he was already looking beyond Manchester to London. There in the world's business and financial capital were opportunities worthy of his talents. His affairs with the Lancashire

weavers had progressed far enough to enable him to operate at a distance. But it was useless to go to London without money. The only place he knew of where big money was to be had was the palace at Cassel. His letters, piously addressed to his father but intended chiefly for his brother Salomon, begged for that money. Could they not somehow get nearer to that pig-tailed miser in the court of Hesse, and whisper in his ear? Was there not someone about the treasury who did have his ear? It did not matter in the least what his price was. Buy him at any price, and get the money, and send it to where it will do the most good. The Landgrave will lose nothing and we will become rich, richer than he. It is the opportunity of a lifetime. Get the money, the money . . . Nathan's letters became an insistent clamor, a bombardment.

It made the young men at home feel sick and helpless. Now they realized as never before how very little they had yet accomplished. They were nowhere at court; their credit was insignificant; and they had no friends, none at least of any consequence. The petty discount business they got from time to time was the barest beginning toward what Nathan had in mind; the really big affairs at Cassel they were not allowed to touch, and if they were they had not the experience or the education to carry them out. They were shopkeepers, not bankers. All that they had to recommend them was their energy, their ambition and their native gifts. But what good were these in face of the handicaps they must overcome? Their path to the Landgrave's treasure was barred as by a triple wall, of mistrust, jealousy, prejudice. The Prince was indeed not the man to let sectarian considerations conflict with a good bargain. Still, he was of his time and class. Everything

else being equal, he preferred to transact important business with German firms of patrician antecedents. His courtiers more than shared that sentiment. Naturally, the great bankers of Frankfort, like the Bethmann Brothers and Rueppell & Harnier, made the most of their advantage and jealously kept the prejudice at Cassel warm. To complete the encirclement, the Jewish merchants at the Hessian capital looked upon the court business as their special preserve and hounded their foreign coreligionists bitterly, relentlessly.

What were the young Rothschilds to do? Somehow or another, straight-forwardly or by indirection, by fair means or otherwise, the capital which Nathan clamored for must be secured him. Only one possible door was open. It was not the most promising approach, not the most dignified; it was, in fact, a back-door. Oh, well, they were in no position just now to consider dignity. It might, if successful, force them to be unfair to those who opened it for them. So be it; ambitious men could not, at this stage of their progress, afford to be over-scrupulous. It might lead to a fight; there was no choice but to risk it, and arm for it in the meantime.

The plan was as simple as it was ingenious. Those old established German banking firms, though they guarded their connections with the Landgrave jealously, heartily disliked dealing with him; and the Rothschild boys knew it. Cassel was, to begin with, in these days of stage coaches, a long way off. That, however, was a minor item. It was Serenity's business manners that tried the patience of a self-respecting banker. William was arrogant, petty, mistrustful, vacillating, greedy, exacting. One never could

be sure with him until he had actually signed a contract, whether a deal was closed or not. He dickered and haggled worse than a Judengasse shopkeeper, and then he stood off loftily and demanded special consideration for his rank and wealth. The smallest transaction necessitated repeated journeys and endless correspondence before Highness's doubts were dispelled and his cupidity appeased. And yet, with all his faults, no banker could afford not to reckon with him: he was one of the richest men in the world.

have been attending to little matters for His Highness—those English drafts, you know. But our coreligionists in Cassel are making trouble for us. If we can go to the palace as your brokers, it will make things a bit easier.

ш

The Rothschilds had been as truthful as they had said they were when they named the opposition of the Cassel Jews as their motive for offering to act as the brokers of the two old Frankfort houses. They had merely not told the whole truth. Two further incentives spurred them on. Their ultimate goal was nothing less than to become the chief, if not the sole, bankers of the Landgrave of Hesse (the Elector of Hesse since 1803), so that by having his huge uninvested surplus on deposit they might supply their brother in England with the capital he required. To arrive at that goal they must learn a great deal more of banking than they yet knew, and—even more important—make friends at court. By 1804 both these objectives had been attained and passed. The Bethmann and Rueppell connections had served their purpose. It would have been idle to continue them, yes even risky. In the same year Nathan left Manchester for London.

So long as the Rothschilds remained on the outer fringe where their services were restricted to the trivial business of draft discounting, their opportunities either to make valuable contacts with the men close to the millionaire-prince or to gain anything like a comprehensive view of his affairs were almost nil. The English note transactions were a routine matter; clerks gave out the checks, clerks received the money. Bond-selling, more especially interest and capital collecting, were quite another thing. They came under the head of grand finance; they involved discussion and negotiation with high officials. Moreover, the brokers to some degree reflected the prestige of the great

houses in whose name they acted. Thus, without transition, the young sons of Meyer Rothschild suddenly found themselves translated into the innermost circle of the Prince's entourage, but one remove from direct contact with All-Highest himself.

Terms were a detail. The Rothschilds needed protection

in the worst way; Buderus, if anybody, could give it to them; he should have whatever he asked. Of course, Buderus had his price; they all did. That was the standard, recognized method of doing business around courts. The highnesses themselves tacitly encouraged it; it enabled them to keep large staffs at small expense. The courtier, having come to a cordial understanding with one of the firms supplying his master, saw to it that as much trade as possible went to his friends and as little as possible to those of his colleagues. In return for his amiability, the merchants remembered him and his with suitable gifts at certain seasons of the year, and helped him out from time to time with a loan—which neither side, naturally, expected to be repaid—to enable him to meet extraordinary obligations for which Highness's salary scale made no provision. Even princes' younger sons and heirs to thrones themselves, when the parental allowance was not elastic enough, did not disdain mercantile gratuities in exchange for a bit of quiet support—as William of Hesse, recalling the lean years before his accession, was not unaware.

Salomon Rothschild and his brothers diligently cultivated the man Buderus. They found him a friendly soul, once his thin reserve was penetrated; he liked a chat, did not even mind exchanging confidences. Nothing uppish about him. And his conversations about the courtly finances were immensely instructive. They had had no idea until now of the real magnitude of the quarry they were after. The Prince, according to Buderus, was a fabulously wealthy man. His loans and investments were scattered all over Europe, from London to St. Petersburg, from Copenhagen to Vienna. Those stodgy old bankers in Frankfort had barely scratched the surface. If they had

The loans, now: there were a half dozen profits to be made out of each one, which under the existing system often went to as many separate firms. First of all the business had to be negotiated; a commission was paid for that service. The terms having been agreed upon, and the contracts signed, the funds must be conveyed to the borrower. For this there was a second fee. After a time the interest coupons began falling due. Somebody had to turn

them into cash, and naturally he must be compensated. The debtor paid, usually, either in foreign currencies or in notes. Bankers were needed to convert both into legal tender, at a discount, of course. Lastly, the loans themselves matured; which, again, involved deliveries, conversions, exchanges—and commissions. This entire gamut of operations was being performed at the Cassel offices almost daily, through a dozen hands or more. Buderus could see no reason why a single pair could not much more efficiently do all the work, and earn all the commissions.

was at forty-two Director of two departments, and still rising. . . . Wasn't it perfectly dreadful how, with the disorders in France and the unceasing wars, the cost of living had soared? However, they, his family and himself, were people of simple tastes, who had learned how to restrain their wants. . . Without being immodest, he was probably the most influential man connected with the Landgrave's financial administration. . . . It was fantastic how many petty houses Serenity insisted on employing. But some day he would see sense, and then the concern that had in the interval gained his confidence would have an account worth talking about.

His family—Buderus was like a Jew in his devotion to his own people. Just às one thought he was coming to the point, he suddenly waved his hand philosophically and wandered off to "more agreeable topics." He never wearied of telling one about his splendid children, his excellent wife, his happy home. And this would lead up to what seemed another small, uncertain opening. The dearest wish of his heart—he would confide—the one thing in life for which he labored and hoped, was that he might assure his children an independent income and a title of nobility . . . Then once, in an undertone, Salomon was sure he caught something to the effect that men of the world should understand. . . That was enough. Salomon, being a man of the world, understood. He understood, namely, that a friend who had the will and the power to do for him what Buderus would do, merited something better than trivial gratuities. Why, he would not insult him by even suggesting such a thing. Buderus deserved a share in the Rothschild firm's earnings. He should have it, by all means.

had an idea. There was a man he knew up Altona-way, in Holstein, a banker by name of Lawaetz—Johann Daniel Lawaetz. He was in excellent standing with the Danish finance authorities, had been doing business with them for a great many years. There was even talk of giving him a decoration of some sort. Also, he and the Landgrave were old friends, the Hessian ruler having been educated in Copenhagen and having married a daughter of the Danish king. Suspicious though he was of all the world, William had faith in Lawaetz. Well now, Buderus would approach this splendidly connected man, ask him how he would like to negotiate a Danish loan with the Landgrave's money, on the understanding, of course, that the Cassel end of the transaction be entrusted to the House of Rothschild. He would get a letter off to him forthwith.

IV

Lawaetz was willing. So, after a little dickering and hesitating, was Serenity. The royal Dane was more than willing. The Copenhagen exchequer, chronically at low ebb, was in the year 1804 more than usually dry. A loan was in fact at that moment being negotiated with the Bethmanns, who on the plea of the great money stringency, demanded the exorbitant interest rate of eight per cent; so that Lawaetz, acting for an "enormously rich capitalist in Frankfort who was uncommonly well-disposed toward the Danish court," and offering to take up the entire issue at four and a half per cent, seemed nothing less than a god-send. The Elector of Hesse was delighted not only because the transaction enabled him to dispose at one stroke of the greater part of his then very troublesome

surplus, but even more because by the Lawaetz plan the identity of the lender would be kept from his poverty-stricken relatives in Copenhagen. And the Rothschilds, in their turn, were not averse to screening themselves behind their Altona correspondent for reasons of their own. They had a presentiment that the good patrician bankers of Frankfort who had so lately initiated them into the mysteries of state loans might take it in bad part were they to learn that it was their protégés' competition that had caused their own eight-per cent offer to be rejected.

For more than two years, during which no fewer than four loans were arranged between Hesse and Denmark, the ingenious system worked without a hitch. The borrowers themselves did not know from whom the money was coming. Every so often an instalment of the bonds, made out to bearer, was forwarded to Lawaetz. Thereupon he notified Buderus of their arrival and total value. Buderus then sent on the money through one of the Rothschilds, who paid it over to Lawaetz, received the securities and returned with them to Buderus. Not a soul in Frankfort had any inkling of what was happening.

By this time it was early in 1806. In January of that year negotiations for still another loan were in progress. Whether by now the Lawaetz-Buderus-Rothschild consortium had become over-confident, or the Elector William had begun to fear that excessive secrecy might lead to detection, or the Danes had raised some objection, in any event the veil was now for the first time partially lifted. William's part in the proceedings remained as hitherto unrevealed, but Lawaetz did at last mention by name his "enormously rich capitalist" in Frankfort. It so happened that the firm of Bethmann Brothers were these days also

offering Denmark a loan of a half a million. They had been smarting under their repulse of two years ago, and were determined to win back their old clients from those mysterious competitors, whoever they were. Who those elusive people might be, had been bothering and puzzling the Bethmanns a good deal. There were circumstances, seemingly unrelated to that Danish defeat, which simply cried to be resolved. There was, for instance, the strange behavior of the Rothschild boys. Three, four, five years ago, they eagerly snapped up the smallest crumb which the great banking houses deigned to toss them. Now they were oddly indifferent, astonishingly busy. One or another of them was continually on the road; their affairs seemed to be prospering hugely, too. They had lately managed to secure a warehouse on the Kurtrierplatz, although Jews were expressly forbidden to take part in the bidding. Very remarkable, again, their father had in 1803 been appointed an Oberbofagent to the Hessian court, and the two eldest boys now bore titles of Hessian Pay Office Agents. It was all very, very odd.

Oddest of all was their coldness to the brokerage arrangement which they had themselves so recently pleaded for. The Bethmanns, counting on the Elector William to take up a portion of their forthcoming Danish loan, had had the young Jews approached, only to be put off with shrugs and excuses. It appeared that Rueppell & Harnier had had a similar experience. The Bethmanns had then addressed direct inquiries to the Cassel War Treasury (Karl Friedrich Buderus, Director). Would His Serene Highness be interested in investing a hundred thousand thalers or so in a Royal Danish loan about to be issued? To which the cool reply had been, in effect, that the

Elector of Hesse was not buying any Danish bonds today, thank you.

In the meantime, in Denmark those dark competitors were again busy. Once more they were offering easier terms, as well as a larger sum. Certain men in the royal finance department at Copenhagen were favoring their bid, and the Bethmann offer was again in danger of rejection. Thereupon vigorous measures had become necessary. Who, the Bethmanns demanded to know, were these people who had the effrontery to make offers to His Majesty without coming into the open? Oh, it was an enormously rich capitalist of Frankfort who was uncommonly well-disposed toward the Danish court. What was his name? Why, Rothschild! Or was it Gruenschild? Something like that.

At this the Bethmann agents laughed bitterly and uproariously. Rothschild! Did they say Rothschild? That was a pretty bed-time story. Did His Majesty's servants know who the Rothschilds were? The father was a petty curio peddler of the Frankfort Ghetto. His sons ran a shop, which until very lately had been housed on the street floor of their Judengasse home. Enormously rich capitalist, fiddle-sticks! Why, they were nothing but irresponsible, insignificant fly-by-nights, without capital or credit or connections, as anyone in the city on the Main would testify. Let the Royal Government take warning. It was quite out of the question for these men to market a bond issue of such magnitude. They might, relying upon an investing public which in the present disorder of Europe and Germany had ceased to exist, think they could. But the moment they went out and tried, they would strike the inevitable snag, and then they would simply leave His

Majesty in the lurch. They were that kind of men. Besides, there would really be no other choice for them. The ancient and honorable House of Bethmann, on the other hand, had great resources of its own, upon which it could count with perfect safety. Let Denmark consider ere she plunged!

Denmark, however, took the warning lightly, and closed with Lawaetz-Rothschild-Buderus. How should the Bethmanns know that the combine had in the past two years thoroughly proved its soundness by repeated loans successfully placed? On July 2, 1806, Lawaetz wrote Buderus:

"I am asking Rothschild to inform you that the new Bethmann Danish loan, which seems purposely to have been kept secret from me in Copenhagen is actually a fact. I am told in a letter at the same time that it was not possible to say No to this old Bethmann House, which felt rather humiliated; and I observe that those who are not well-disposed toward our good Rothschild have held out promises that the Bethmann loan would cost less and be more promptly liquidated than Rothschild's. In order to contradict this last to the best of my ability, I shall this very day take up the entire remainder of the loan out of my own resources, and relying upon your coöperation look forward confidently to the final remittances from you. . . . I hope people will finally become convinced that he (Rothschild) is a good man who deserves respect, let envy say against him what it will."

The result of Lawaetz's energetic procedure was that the snag which the Bethmanns had so confidently foreseen was actually encountered by themselves. That summer Prussia lay prostrate under the heel of Napoleon; investors throughout Germany ran to cover; and the surplus of the millionaire Elector of Hesse was, through the good offices of shareholder Buderus, at the disposal of the House of

Rothschild. Regretfully Bethmann Brothers found themselves driven to write to Copenhagen in November that in view of the terrible events of recent date, which no man could have foreseen a few months earlier, and the consequent ruin of the most prosperous German lands, they must ask to be released from their promise and for the return of their initial advance. The ancient, patrician firm did not easily forget the humiliation of this letter nor their erstwhile young brokers who had obliged them to write it.

Next came the turn of Rueppell & Harnier. The lifting of the veil on the Copenhagen mystery had given them an even broader peep at the proceedings behind the scenes than the other banking house had got. The Elector, as it chanced, wanted a portion of the 1806 loan to be paid in old Danish bonds which were due to mature that September. That loan, however, had been issued through Rueppell & Harnier—interestingly enough, it was the very one in which the Rothschilds had for the first time acted as their brokers—and, if it was to be called in, the notice to Copenhagen must go through those bankers' hands. This concern, naturally, had its own friends at court; wherefore, in the course of time, the news was brought to them that the purpose for which Serenity desired those securities was to convert them by way of part payment toward a new loan, which not only was being negotiated by the House of Rothschild but—in order to screen Highness's identity—actually carried the Rothschild name on each bond as the lender!

Rueppell & Harnier were a younger firm than the Bethmanns; that is, they had a great deal more pugnacity and considerably less business. They were, therefore, not going to take a thing like this lying down. For that matter, as will presently be seen, neither did the Bethmanns. Unfortunately for the cause of both houses, there were several important details about the affair of which neither of them had the remotest inkling. They were not aware that in these two and a half years the Rothschilds had put through several loans between Cassel and Copenhagen (via Altona) and had made themselves extremely solid with the royal ministry of finance. They had never as much as heard the name of Lawaetz. Least of all did they know—at this time they did not even suspect—that the real villain of the piece was a gentleman named Karl Friedrich Buderus who, close as any man to the Elector, was even closer yet to the brothers Rothschild.

So, rather amusingly, Rueppel & Harnier opened hostilities by addressing a protest to the very man in Cassel who was the source of all their trouble. They Lordshipped and High-Well-Born-ed him all over the place—in point of fact, the modest schoolmaster's son was not even knighted till some months later—and begged him to consider how impossible it was for them to call in those bonds after the six-months' notice period had passed. But chiefly and bitterly they complained of the humiliating necessity of explaining to the Danish authorities that it was in order to make the Rothschild investment possible that these bonds must now be so irregularly amortized. "The conclusion which the Royal Finance Ministry might draw from this is that it is not the Danish state credit itself but solely the Jewish name of Rothschild which enables Danish state securities to find a market in Hesse; and this is surely so contrary to His Electoral Serenity's Highest intention that we account it a merit on our part to call your Baronial Well-born and High-Well-Born

Excellency's attention hereto" as well as to a counterproposal of their own.

The plan suggested by Rueppell was, of course, not adopted. But the temper of the letter gave Buderus more than one sleepless night and frightened the Rothschilds greatly. A fight was clearly coming. They were not yet ready to join issue with the most powerful banking houses in Germany. Satisfactory though their progress had been these last two or three years, their position was not yet solidly intrenched enough for such a struggle. How would it end? And in an open break what would that incalculable man on the Hessian throne, the timid, suspicious, vacillating William do about it?

And then, just as things looked their darkest, came Napoleon, the man who was so often to smooth the path unconsciously for the Rothschilds, and saved the day. On the last day of October, 1806, French troops, heedless of the Elector's "no trespassing" signs, crossed the frontiers into Hesse. In the middle of the night of November first Serenissimus hurriedly clambered into his carriage, and fled from Cassel in a panic. His beloved Hesse was not to see him again for seven years. Karl Frederich Buderus, silent partner in the House of Rothschild, was left in all but complete control of the princely finances at home.

By an interesting coincidence, the years of the Elector's exile were also the decisive years in the rise of the Rothschilds.

CHAPTER IV

BATTLE

and after narrowly escaping capture at the hands of the invader, sufficiently recovered his composure to turn his horses in a northerly direction. Two weeks later he drove over the frontier into Denmark. There his younger brother, the Landgrave Karl, who like himself had married a daughter of King Frederick V, and who was now resident governor of the Duchies of Schleswig-Holstein, welcomed the bedraggled fugitive cordially enough and assigned him the royal suite in his palace at Gottorp as a temporary residence. The first man to visit him in his exile was the Director of the Hessian War Treasury. William was so happy to see him that he conferred upon him the title of Von Carlshausen. One half of Buderus's dearest wish was thus fulfilled: his children were nobles. All they lacked now was an independent income; the Rothschild connection would take care of that.

Buderus stayed with his master only a few days, noting down orders for the disposition of the great quantity of boxes and bundles of valuables left behind. Then he returned to Cassel with his newly-acquired halo to carry them out. William himself was too unhapy to remain long at Gottorp. To be at a court where others ruled and strutted while he was but a barely tolerated interloper, was not his notion of princely grandeur. Every time the Crown Prince-Regent came down to Gottorp the aged Elector must clear out of his royal suite, gather up his boxes and papers, seek a corner in his brother's apartments, and listen to everlasting reminders about the kindness and hospitality he was enjoying. When, therefore, some two months later, the agreeable Countess von Schlotheim,—"my best friend for whom I wait yearningly" as his diary describes her—followed him with their children into banishment, he set up housekeeping first at Rendsburg and later—Lawaetz having secured a suitable place—at Itzehoe, where he "felt almost at home again."

Back in Cassel meanwhile events moved swiftly and tragically. The French troops had completely occupied Hesse. The day after the flight, Governor General Lagrange had taken possession of the Landgrave's palace, packed the frightened old princess off to her daughter at Gotha, and two days later issued a proclamation confiscating all the former ruler's possessions in the name of the Emperor Napoleon and ordering all the state's revenues to be paid into the imperial treasury. In a panic Buderus and the secret regency council which William had appointed before his departure made haste to get their master's remaining treasures into hiding. Truckloads of coffers and boxes were buried under the walls and stairways of the palaces of Wilhelmshoehe, Sababurg and Loewenburg, one cartful of securities and other valuable papers was dispatched in the dead of the night to a warehouse in Frankfort, a number of cases filled with records found their way into the basement of the Judengasse home of old Meyer Rothschild. Subsequently it transpired that Lagrange had an itching palm, so that the greater part of the

property safely reached its anxious owner at Rendsburg and Itzehoe, with the Governor General's connivance. The rest, consisting of eleven million thalers in bonds, coupons, cash, silver services and jewelry, including even William's prized rare-coin cabinet, which Meyer Rothschild had helped to fill, must be turned over to the imperial war chests. A round million francs went to Lagrange for his coöperation.

The Bethmanns and Rueppell & Harnier accepted the challenge and carried the fight into Denmark, to the Landgrave's exile. The older house deemed it beneath its dignity to do more than write; it wrote to Rendsburg often and vigorously; the other was not too particular to employ the same kind of weapons as their Jewish adversaries. Rueppell & Harnier, too, had friends at court. They were on the most cordial terms with a man—Lennep was his name—who stood as high in the Prince's esteem as Buderus. Lennep, too, was an honest courtier with a family to provide for. He had won the rank of War Privy Councilor long before Buderus had, and during those difficult days of the flight and the rescue of his master's possessions had shown the utmost courage and devotion. Best of all, he was now on a mission which carried him back and forth between Hesse and Schleswig-Holstein, so that he was in direct and frequent touch with All-Highest.

Early in March both partners journeyed to Rendsburg, accompanied by their friend Lennep, to lay their case before William. They brought with them an earful of news, part of it true, some of it fact grotesquely distorted, much of it pure gossip, all of it disquieting. Serenity's mistrust, never fully relaxed, was readily roused. He believed all that his visitors told him, and suspected a great deal more. So that was what his good man's much-made-of devotion amounted to! The moment his master's back was turned, he proceeded to rob him for his own enrichment. That was how he repaid his Prince for the faith reposed in him, for being raised from obscurity to titled rank, for the kindness and generosity shown him. Only lately he, William, had offered to double his Director's salary, not-withstanding the impoverishment that stared him in the face, though in truth Buderus had, out of regard for his

master's late misfortunes, declined it. Oh, there was no loyalty in the world, no appreciation, no gratitude. ("Oh, Hessians, in what a light you show yourselves," wrote the exile in his diary on another occasion.)

Though this was the aspect of things which principally

So, partly to pacify his visitors, partly to administer a gentle snub to Buderus—a severe one he did not dare risk—he promised to look into their complaints. He promised it, and he meant it. He really must pull Herr von Carlshausen up a bit. Meanwhile, as an earnest of his esteem for the House of Rueppell & Harnier and for his man Lennep, he would forthwith entrust the latter with a financial transaction in Cassel of considerable importance, which should serve the double purpose of salving their feelings and sobering Director Buderus.

The bankers and their friend went on their way rejoicing. Their triumph was to be of short duration.

1

The longer the Elector reflected on the tidings he had received, the more he was disquieted and the higher soared his temper. When, therefore, he presently took action he proceeded rather more precipitately than he had meant to and than appeared necessary. He was in very bad humor with the world. His luck had deserted him; none of his affairs prospered any more. A revolt of the Hessian soldiery, from which he had expected great things, had ended in bloody failure. His endeavors to placate Napoleon and regain his throne—with Majesty superadded, the rascally go-betweens whispered to him—were apparently futile and certainly costly. The boorish disregard of his high station by the Holstein peasantry, who never so much as dropped a curtsy or lifted a hat when he went riding in his carriage, chafed his noble spirit beyond endurance. The unspeakable French were despoiling him without mercy. And now this fellow Buderus too, scheming heaven only knew what with those Jews of his! Well, he would stop that at least.

The explosion came the last week of June. In a letter, which by a sort of poetic fitness was sent through one of the Rothschilds, William suddenly decreed that, effective at once, the English and Danish checks, hitherto cashed by Buderus via Rothschild on the spot, be forwarded untouched to the Reserve Treasury at Itzehoe, the new seat of the captivity. "I shall expect from you," thundered His Highness, "an immediate acknowledgment of this de-

cision and your compliance therewith (dass das Noetige besorgt ist)."

Coming thus without warning, this was an extremely unpleasant surprise. It not only knocked Buderus von Carlshausen's newly acquired knightly dignity askew, it struck terror and confusion into his and his associates' plans. Deliberate malice could not have chosen a worse time. A few months earlier such a blow, vicious as it was, might have been borne with resignation. But since the previous November things had been happening; startling, wonderful things. To continue happening, those English and Danish moneys of Serenity were absolutely indispensable. They were the concern's working capital. Their withdrawal spelled catastrophe.

The Elector had no sooner, by his sudden exit on the first of November, given the Rothschilds access to his money, than Napoleon, on the 27th, obligingly provided them with a profitable trade to employ it in. Having in the course of the summer thoroughly whipped Prussia and seized her coasts, the Emperor had on that day launched against Great Britain his memorable Continental Blockade. The Edict of Berlin, as it was called, prohibited all trade with England, declared all British merchandise contraband of war and closed the ports of the mainland to all ships arriving from the British Isles. This was the very thing that the Rothschilds needed. With Nathan in London to do the buying, with the Van Nottens handing him a monthly check for close to two thousand pounds, with Buderus in Frankfort supplying an equal or larger sum to the parent house, with cotton cloth and every other commodity from Britain or her colonies selling at famine prices, with four energetic, able-bodied, keen-eyed

Worse things yet seemed to be looming. Throughout the summer Serenity kept ceaselessly ordering his Director to present himself at Itzehoe and give an account of himself. There were so many things he could not understand; he was all in a muddle about his affairs; besides, he was lonely and homesick for old faces. Buderus assured him he would be delighted to answer any question, from a distance. But he begged to be excused from undertaking that journey just now. He pleaded urgent and heavy duties at home, the hardships and the dangers of travel, the suspicions his departure would arouse in the watchful

French police. But William insisted. So early in September, his arguments and resistance exhausted, Buderus packed his bag and mounted the stage coach for Itzehoe. On the evening of the tenth he stood before his quizzical master.

He stood in the little house in Holstein with hat in hand and trepidation under his tunic. Yet, now he was here, he was almost glad. At last the long-threatened storm was about to break. Let it break; he could weather it. What had he to fear? He had done nothing he could not defend. Any other man in his place would have done as much, if not more. He was making the most of his opportunities, as a responsible head of a family was in honor bound to do, without in the slightest degree hurting his master's interests or betraying his trust. What was more, he had the inside grip on the situation; it would take months and a staff of auditors to check up on him. Highness might thunder. But so long as he kept his head he, Buderus, would hold the upper hand. Whatever happened, he was confident of the outcome. None the less he could wish it were behind him.

In three days it was over, and he was returning home triumphant beyond his rosiest hopes. He had beaten them all—the Cassel Jews, Rueppell & Harnier, Lennep, and the mighty Bethmanns themselves. The future of his children was assured!

The first encounter, on the evening of his arrival, was at best a draw. William, lofty, overbearing, injured and fussy, led off by demanding why his Director was so thick with the Rothschilds and so distant toward the Bethmanns. Exactly what was the reason that he so invariably favored those Jews of low antecedents and doubtful re-

Buderus retired from the presence uncertain whether he had lost or gained ground. Alone in his chamber that night he went over the interview step by step. He decided that he had not acquitted himself as gallantly as he had expected. Without exactly losing the first round, he had let his master browbeat and confuse him. His choicest arguments were still unused. No, he would not risk another personal encounter if he could avoid it. He was too easily put out of countenance. Here in the quiet of his room he could think of any number of things he ought to have said. He would say them, now, in writing, away from that irritating, suspicious eye. He got up and went to work. The next day he handed William a long letter, categorically explaining his position. It was in effect a brief for the Rothschilds; and while it was by no means the last word that was to be said, it decided the argument.

Buderus began by frankly admitting that ever since the day of his master's regrettable departure, he had, with one or two exceptions, let the Rothschilds convert all the drafts coming from the Van Nottens in London. It had seemed to him good to do so because working through a single house was always more efficient and in these cruel times the only safe way. There was no need to dwell on the danger of too many people knowing his master's affairs just now. He had picked the Rothschilds for the reason already mentioned, as well as for the following:

Firstly. They were punctual with their payments. With money nowadays going out faster than it came in, this was of first importance. Indeed, on more than one occasion when there were pressing bills to pay, the Rothschilds had cheerfully settled up in advance of collection.

Secondly. They could be trusted absolutely to hold their tongues. When some disgruntled individual, unmindful of the injury to Serenity's interests, had recently informed against them, the police utterly failed to get a word out of them—not even after examining their books!

Thirdly. They always paid the exact rate of exchange pre-

vailing on the day of sale.

Fourthly. They willingly attended to certain payments which need not be named and which were he to handle them himself would expose All-Highest to very serious consequences.

There were many other advantages about the arrangements that he could easily point out. However, he had said enough to show that, unlike certain people whose church affiliations were doubtless more commendable, the Rothschilds were loyal, discreet, business-like, honest dependable and tireless in the service of the Most-High.

"And since," added Buderus sweetly, "I am unable to discover the smallest difference between a florin of Rothschild and a florin of Bethmann, I thought that I was doing everything for the best. It hurts me, however, to observe that Your Prince-Electoral Serenity, to judge by yesterday's verbal utterances, does not seem graciously to approve. I should, therefore, like to ask for definite instructions as to how the English checks are to be disposed of in future."

It was to him, he repeated, a matter of complete indifference. Only he must say right now in advance that after punctually carrying out highest orders, whatever they might be, he would not hold himself in any way responsible for any untoward consequences they might have. And this reminded him of something. His P.-E. S. doubtless recalled the sudden fit of mistrust that seized him earlier in the summer, when he issued that ill-timed order about sending on the checks here to Itzehoe. Well, it was no use now dwelling on the mischief that resulted in—the unpaid bills, the want suffered by interned Hessian officers and his own wounded pride. The one thing he was in duty bound to say was this:

"Had Yr. P.-E. S. been most graciously content not to interfere in my business, I could have sold 20,000 pounds sterling at 141½. Today they are worth at least six thou-

sand florins less, and no human ingenuity on earth can now prevent that loss."

That thrust struck home. There was no fight left in William. He made a brave show of pretending that he was unconvinced at yet another conference. But he knew, and Buderus knew, that the battle was over. Serenissimus' religious preferences were not as extreme as all that. When it came to losing six thousand florins he was as openminded as any French revolutionist. So he threw over Bethmann and the rest of them without much further ado. On the following day, amid mutual expressions of esteem and regret, peace was signed.

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Returning home to Hanau—he had moved his head-quarters to the little old capital, so as to be more accessible to his Frankfort associates and less in the way of the French usurpers at Cassel—Buderus went methodically to work to consolidate his victory. The Bethmanns were out. Lennep, as might have been expected, had during the summer eliminated himself by making a fiasco of the commission entrusted to him at Rendsburg. The man was not a financier to start with. In addition, he had had the ill-luck to lose a parcel of his master's bonds, which he insinuated certain Jews, including the Rothschilds, had stolen from him. Lastly, he had attempted to execute that commission without saying a word about it to Buderus; and that misstep had only given the latter the needed opening to crush him. That had done for him and for his patrons Rueppell & Harnier. The Cassel Jews need not worry anybody. They had no channels worth mentioning

to Serenity's ear. They could be brushed aside without ceremony. So, competition all but wiped out, the Rothschilds had a clear field. The question now was, What were they going to do with their monopoly? No, even before that, the immediate problem was to see that they held it.

The keen young men knew wisdom when they heard it. It needed no urging from Buderus to tell them that this policy would be its own reward. All they required of him was a bit of prompting now and then as to the surest way to please the man he knew so well. When they opened their places in Hamburg that summer, they made the

Buderus, however, did not intend to recline on his laurels. His victory at Itzehoe was a justification of his good counsel. So far, so good. But he knew his Prince too well to assume that any understanding with him was final. There would be other fusses no doubt, as the Rothschild-Buderus program went on toward its fulfilment. Serenity was not likely to submit to the very next step without a struggle. The competitors, temporarily routed, were bound to reshape their lines and attack again. This was little more than a breathing spell. It was the part of prudence to utilize it in preparation for future trouble.

The votive offerings to Highness must not only continue, they must be increased.

The personal ties with the Prince were knitted closer in other ways as well. Occasionally old Meyer, as the titular head of the concern, wrote the exile a cheer-up letter, assuring him of his loyalty "to the last drop of my blood," advising him not to take too high and mighty a line with the conqueror, volunteering to interpose on his behalf with the Empress Josephine on her expected visit

General Lagrange by way of conserving the ex-ruler's property. The aged merchant knew, of course, that he was promising more than he could perform; but Buderus believed there was no harm in being hopeful. It would keep his master in good humor toward the firm; he rather liked feeling that people were exerting themselves in his interests, even if their efforts came to nothing. And it so happened that the Rothschilds did in fact play no small part afterwards in easing the rigors of the occupation for the Elector and his faithful. For that thanks to the interesting comradeship which grew up between a Catholic archbishop and the Jewish merchant family. Of the good prelate, more anon.

Just what use, however, all these ministrations were, is problematical. For the fact is that the peace made at Itzehoe did not last. Of course, renewed friction might have come sooner and gone further, had the Rothschilds been less thoughtful. There is no knowing. The Serene William was a difficult man, without a doubt. Hopelessly mistrustful certain people—Buderus, for instance—found him. He may have been. And then again, it is possible he was merely taking bankers' helpfulness and unselfishness at a discount. He had a shrewd and cynical streak in him. However all this might be, it was not many months after September 1807 that his suspicions woke again and the tension between Prince and Director quickly rose to the breaking point. And for this there appeared to be grounds.

Years and years ago it had become an established rule that Buderus render each month an account of his transactions. Upon William's precipitate exit there had followed such confusion, however, that Buderus was compelled to

carried into Cassel upon the shoulders of his jubilant subjects. Some of the clearances were still to be signed while the Emperor Napoleon was on his way to St. Helena.

There is no overwhelming reason for doubting Buderus's sincerity in this whole affair. There are only some remarkable coincidences. In the summer of 1808 when his master was becoming unpleasant, Buderus defended his delays quite convincingly. He must, he said, do every bit of writing and figuring with his own hands, attend to an enormous correspondence which in these times required the most painstaking care both in wording and posting, go on numerous journeys, carry on complicated negotiations with all sorts of people—and all this in the strictest secrecy. Besides:

"It is surely most graciously known that my papers are hidden away, so that I could not (even if I had the time) possibly work at my accounts. I trust I shall soon be able to fetch them again, and then by taking extra time at night I shall try to relieve Your Electoral Serenity of uneasiness on this score, and prove that I have not a single penny of Your Highest Self's money in my hands."

Could anything be more straightforward? And yet-

Napoleon had no sooner seized Hesse than he went vigorously to work to collect the deposed ruler's loans. In those three and a half years between the spring of 1807 and the autumn of 1810, while William was waiting for his Director's accounting, repeated and ever-increasing inducements were offered the debtors to pay up what they owed to the imperial treasury. Concurrently the exiled Elector took steps, through Buderus, to have his money returned to himself. A large number of the borrowers settled with the usurper; many others preferred to redeem

their bonds from the rightful lender. In some cases Buderus collected the sums in full, in others he must meet the terms offered by the French. Of all these complex transactions no accounting was rendered till three years later.

Interesting to note also is the fact that between 1807 and 1810 the contraband exported by Nathan Rothschild from England went on continually mounting. The biggest month was July 1810. By October of the same year Nathan had found more interesting ways to invest the Elector's funds, as well as other and larger ways of access to them.

Still it is not impossible that the two sets of occurrences have nothing to do with one another. The coincidences may be purely fortuitous.

CHAPTER V

POLICE!

peror for the restoration of their legitimate Prince, vowing that they had always been "completely happy under his rule;" and these being roughly dismissed, they took secret and solemn oaths to drive the foreigner out by force.

It goes without saying that the imperial deputies and officials in Cassel, Hanau and Frankfort had more than an inkling of these latter enterprises, and kept a watchful eye open on all and sundry who still maintained contact, direct or indirect, with the absent monarch. And thus it came about that when the French, some two months after the occupation, upon ordering the Hessian military to don the imperial uniform and make themselves ready for service in Spain and upon being met with rebellious shouts of "Death to the invaders!" proceeded to ferret out the ringleaders and accessories of the plot, some good friend whispered to them that if they would go around to Number 148 Judengasse, to a house called "Zum gruenen Schild" but at present occupied by a family named Rothschild, they would probably find what they were looking for and maybe something more for good measure.

As a matter of fact, the information turned out to be mistaken. That is to say, the police did not find what they were looking for. They found, instead, a Jewish family of the middle class, consisting of an elderly pair, several daughters with their husbands, one or more married sons with their wives, and one or two unmarried younger members. The group was obviously worried and frightened; but, upon being questioned, gave what appeared to be a good account of themselves. They denied all knowledge of the soldiers' uprising and of the exiled ruler's affairs. They promptly, even cheerfully, produced their books when asked for them; and an examination of these seemed to prove that the family had told the truth. Not a trace of any dealings with the Prince or his agents could be found in them.

And that, for immediate purposes, was the end of the

first encounter of the Rothschilds with the Napoleonic authorities. All in all, it was the family's inning. They had had a scare, it is true; but even that was not an unmixed evil: it gave them confidence for future searches, if there should be any. Their skilful conduct throughout was, moreover, likely to avert suspicion later on. Most important of all, they had not slipped up on a thing. The police seemed to have gone away no wiser than they had come. His Serene Highness would be delighted when he heard that; it should strengthen his belief in their ability, their discreetness, their loyalty. He should hear of it, of course, at the first opportunity. The good Director Buderus must see to it.

This was in the summer of 1807. A month or so later, as might be recalled, Buderus was facing his master at Itzehoe. In defense of the Rothschilds and of his close relations with them, he did surely enough cite the incident with the French at Frankfort. It was one of the things that impressed the Prince and ended the discussion.

But the Napoleonic police, as it turned out, took a lot more convincing than that.

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It would have been little short of a miracle if the curiosity of the occupation authorities had been appeared by that initial visit. Their failure on that occasion to connect the house with the Elector's plots had been disappointing, but it did not allay their doubts. They drew from it the simple enough conclusion—the firm was keeping a double set of books. It was an irritating device; however, there was no help for it; the merchants would use it, to es-

cape taxes and cover up doubtful transactions. The Jewish family's resort to it was anything but reassuring; it only indicated that there were aspects of their business which they wanted to keep dark. The house of the Green Shield with its dependencies on the Schnurgasse, the Kurtrierplatz and elsewhere would bear watching.

Exactly what those very busy young men were up to remained, for the time being, to be found out. Nor did it look as if it were going to be easy, even afterwards, to bring them to book. They were about as keen and tough and slippery and uncommunicative a lot as any police officer in His Majesty's service would care to meet. For all that, no amount of shrewdness could possibly keep their hand concealed forever. They were much too active, their enterprises were too varied and numerous, for that.

There was, to begin with, the refugee Prince with his millions. An undetermined but certainly a huge part of his fortune was known to have been left behind, in the form of outstanding local loans, in securities of every sort, in jewelry, silver and what not. Gossip had it that this entire treasure had on the night of the flight been rushed to the Rothschild premises and that it still remained in their care. However that might be, a lively commerce between him and them was obviously going on. For the longest time every one in Frankfort had been suspecting that Buderus von Carlshausen was on a certain footing of intimacy with the Jewish merchant family. After October 1, 1807, that suspicion had turned into fact. This Buderus was by common knowledge the man whom the exiled William had left in charge of his financial affairs. It was clearly his job to rescue his master's loans from the imperial grasp, to gather up the tangible property and get

it across the frontier to its owner, and in other ways to look after the ex-ruler's pecuniary interests. But Buderus was keeping mouse-quiet at Hanau and on his little country estate of Carlshausen nearby, while his associates the Rothschilds were working like beavers and their carriage was uninterruptedly on the road. It was as simple as two and two: The young bankers were the link between the flown Elector and his man on the ground.

That was one thing. Then there was another. William, as the police had long ago found out, had left behind him in Cassel a secret ministry, or regency council, to represent his political interests. It was they who directed the agents and conspirators in Hesse, who kept the communications open with the League of Virtue and other German liberation societies, who watched over the disbanded army chiefs and their subordinates, and who inspired the petitions and the popular patriotic fervor. The council, the agents, the old officers and soldiers must live. Their master, through orders on Buderus, saw that they did not starve. And the Rothschilds were Buderus's bankers.

Then, again, there was the Continental Blockade, which prohibited trading with Napoleon's arch enemy, England. The Rothschilds not only had a shop in which English cotton and English colonial wares, such as coffee and tea and indigo, were sold; one of their number was residing and doing business in London; his father and brothers on this side of the Channel kept in touch with him regularly both from Frankfort and from a branch office which they had latterly opened at the port of Hamburg. This absent member seemed in effect to be one of the firm, its representative in the enemy capital. And meantime the blockade was being patently violated by somebody; for

the Continent, notably Frankfort, was filling up with contraband. It looked rather as if the concern might be having a hand in the smuggling trade.

In sum, even without anything unusual happening, the sheer complexion of the Rothschild affairs and contacts had a suspicious color. In disturbed times like these, when extraordinary events were crowding one another off the calendar, when even the most peaceful citizen of an occupied country had all he could do to keep off the police blotters, a great firm on the make such as the House of Rothschild could hardly expect to escape attention. That first little episode in the summer of 1807 was nothing but a prelude. Between that year and 1811 not fewer than five actions were taken, four of them in their raids on the premises or summonses to headquarters. The French authorities had scented blood and meant to trail the quarry to its lair.

To make it easier for them, there were the coreligionists of the Rothschilds, to whom the progress of the brothers was not an agreeable sight.

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On the 7th of July, 1807, Napoleon and the Tsar of Russia signed at Tilsit a treaty of peace and friendship, whereby the two emperors agreed to divide Europe between them. Five days later the Electorate of Hesse along with some other fragments of the Confederation of the Rhine was transformed into the Kingdom of Westphalia. At Cassel preparations were at once begun for the entry of the new monarch into his new capital. Two weeks before Christmas Jerome Napoleon I ascended the throne amid the cheers of his loyal Hessian subjects.

In view of these rumors, which inquiry showed to be not unfounded, it became the painful duty of King Jerome Napoleon I to offer the portfolio of War to some incumbent of sterner composition and to banish the good Lagrange from his royal presence. It seeming improbable, moreover, that the negotiations between the refugee Elector and the late Governor General had been conducted without intermediaries on the ground, or that their execution had been effected without the aid of subordinate French officials, the inquiry was widened with a view to discovering such possible accessories. The trail led, on the French side, to certain of the former Governor's immediate aides, and, on the Serene William's, to Buderus, his preferred bankers and one or two others. Lagrange's dismissal occurred in January 1808, only a few weeks after Jerome's arrival in Cassel; the supplementary investigation lasted till mid-summer of the same year.

The upshot of it all was that Buderus as well as his old rival Lennep was arrested and taken under guard to Mayence. Buderus freely admitted his continued loyalty to his banished master and his concern with the latter's affairs, but no amount of grilling or threats would produce anything more. He was, he insisted, merely His Highness's bookkeeper and factotum; there was nothing illegal about that. Yes, he was sending reports and balance sheets and that sort of thing by post to Denmark, to his employer's present address. If the authorities had anything against his doing so, he would, of course, have to stop. No, the police were quite willing to have him continue. Only he must submit all papers, before posting them, to His Majesty's servants. With this warning, suggestive of future interviews, both men were allowed to go.

The Rothschilds' turn had come earlier. Old Meyer being ill in bed, Salomon responded to the summons by appearing at the court house in Frankfort. He entered a sweeping denial, of course; his firm, he declared, had had nothing to do with the Lagrange bribery episode. It happened to be quite true. That entire affair had been handled by William's political representatives, not by his financial agent. The secret regency council had seen the Governor General, had come to an understanding with him as to terms, and had then merely asked Buderus to provide the wherewithal. Partly because Highness was just then in bad humor with the Rothschilds—it was the time of the Bethmann and Rueppell & Harnier insinuations—and partly because the Jewish bankers were likely to arouse jealousy in mercantile circles and suspicion in official quarters, the Prince's ministers directed that the payments be made through a concern of their own choosing. The Rothschilds' hands were thus clean. Salomon, however, could not deny that certain correspondence from Holstein reached Buderus through his address; and upon being ordered to deliver the same to police headquarters in future, he was excused.

No more enlightening was the examination of Bansa & Son, bankers, the concern above alluded to. They, too, entered a general denial, they likewise cheerfully submitted their records, and these, equally with the Rothschilds', contained not a solitary mention of Governor General Lagrange. The Frankfort schools of business taught double-entry bookkeeping as a regular part of the curriculum, clearly.

The Royal Westphalian police were sure they were on the right trail. Their failure to bag their game baffled them. Their doubts increased, and so did their vigilance.

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The erection of a kingdom upon the ruins of his beloved Electorate, the Majesty whereof adorned not himself but the son of a Corsican lawyer, was a cruel blow to William. "Most terrible of all days!" he moaned in his journal. "I am deposed. Hesse, my dear Hesse, knocked down to the Kingdom of Westphalia. . . . My house has reigned uninterruptedly for 542 years, since Henry the Child, through twenty-one rulers, attained with me its highest peak, and now has totally ceased to be! O God, give me strength to bear this misfortune as thou wouldst have me, without whimpering."

The prayer must have been granted; for though he never ceased complaining, his courage did return after a time. The wretched fiasco in which the Christmas soldiers' rebellion had ended had not disheartened him. It had on the contrary given him much hope. For the lesson which he drew from it was, not that the usurper was invincible, but that his people were ready to die for their Prince. Logically, therefore, he buckled on his saber for fresh efforts. How very much in earnest he now was may be judged from the fact he no longer insisted on bartering Hessian troops for English subsidies (as he had obstinately done before his flight) but volunteered to put an army corps of four thousand men into the field at his own expense, as his contribution to the anti-French war then brewing, and even to help with money in the ambitious plans for a general revolt in Northern Germany which were being fostered by the Prussian minister Von Stein. The corps, to be sure, subsequently shrank to thirteen hundred men and not quite three hundred horses; but he

did design the uniforms himself, and anyhow it was nobody's fault that recruiting was so slow.

The whole adventure misfired, unfortunately. A letter of Von Stein's dealing with the projected war and uprisings fell into the hands of the French, and this caused Napoleon to demand that the Prussian king dismiss and banish his minister. In April (1809) the Austrians were beaten at Eckmuehl, by way of a prelude to the crushing defeat at Wagram. On the same day French artillery scattered the premature rebellion of the under-armed and badly-led Hessian peasantry.

As might have been expected, the royal police at Cassel once again determined to hunt down the financial agents of the plot. Poor Lennep was at once taken into custody, and locked up in the fortress at Mayence where for weeks he was treated like a common criminal. Then, on the 9th of May, a detachment of soldiers commanded by a police officer showed up at Buderus's home in Hanau with a warrant for his arrest. Buderus happened to be with his family at his country place in Carlshausen that day. A sister of his was alone in the town house. Pointing a gun at her head, the officer demanded to know where her brother was hiding. After much rough-handling of the lady, breaking open of desk-drawers and rummaging through files, they were persuaded to leave. They then proceeded to Carlshausen, seized what papers they could find, and marched Buderus as their prisoner back to Hanau. There he was severely grilled for two days and finally released under bail.

The Rothschilds came off rather easier. Residing in Frankfort, they were not within the jurisdiction of Jerome's kingdom. To be sure, Frankfort was, like Hesse, part of Napoleon's empire; it was, however, a separate unit, and was governed by a gentleman of quite another stripe. Archbishop Carl von Dalberg, sometime Elector of Mayence, had found favor in the imperial sight by doing the preliminary diplomatic work in the formation of the Confederation of the Rhine. A good Teuton, an easy-going, kindly man, an ambitious prelate, he was convinced that Napoleon was destined to do infinitely more for the advancement of German unity than all the petty, selfish, mutually distrusting native princelings. For his services the Emperor appointed him primate of the Confederation, and assigned him the City of Frankfort as his more or less sovereign domain. His bailiwick was left intact even after the anointed Jerome entered his kingdom. In 1810 Napoleon named him Grand Duke of Frankfort and gave him Hanau for his capital.

Thus the Rothschilds, though in fact subjects of imperial France, came directly under the allegiance of Archbishop Dalberg; and he and they were the best of friends. The Jewish firm had from the beginning made a point of cultivating the good prelate. His cloth notwithstanding, he was a man of the most liberal views; also, he was ambitious and hard up. The bankers, on the other hand, had ample funds, and their affairs just then were of such a nature that influence in high quarters was desirable at any cost. As time was to prove, Dalberg's friendship was decisive in at least one crisis in the family's history.

It surely was a life-saver in the spring of 1809.

Having disposed of Lennep and Buderus, the Westphalian Commissioner of Police, Savagner, gave his attention to the Jewish banking house. He made up his mind, now once and for all, to finish with those bright young men. He had had enough of idle hearings and farcical examinations of their dummy books. He wanted the lot of them jailed. He wanted them jailed, and he wanted their places, all of them, thoroughly ransacked. Evidence that they had played any part in the recent revolt was, to be sure, lacking. No matter. It was manifest to everyone that they had their hands in a dozen unlawful operations. Well, this was the time to bring them to book. The late uprising was merely the needed pretext.

move tell-tale wrappers and tags. That done, the family carefully rehearsed the threatened interview, and sat down to pray for more power to the Archbishop's elbow.

Events showed the wisdom of these preparations. In the next day or two the good Dalberg was rather forcibly reminded that there were limits to his sovereignty. Pressure exerted from Cassel via the imperial envoy at Frankfort could not be ignored. A point had, therefore, to be yielded. Of the arrest of the bankers Dalberg still would not hear. With no more evidence than Savagner had to offer, it would be unconstitutional and outrageous. However, if the Westphalian authorities really believed it would be of any use to them, why, of course, they could have a search warrant. But propriety and due respect for the sovereign dignity of Frankfort demanded that an officer of the city state assist at the proceedings. He must insist on that, naturally.

So Dalberg's man assisted, and did what he could as public defender. None the less, the visit was by no means an empty formality. The search, begun at the house on the Judengasse, was carried into the merchants' dependencies in town. Old Meyer, though again ill in bed, was questioned and cross-questioned most thoroughly, and so was Guetele, his wife, their daughter Jettchen, who was in charge of the cash box, two sons—the others being on the road—and their wives. Perfunctorily, too, the visitors glanced at the books. They had learned by this time how little they must expect from that source.

A certain directness and self-assurance marked the authorities' conduct of the personal examinations. The questions had not only been written out in advance; they seemed to be based on information of a peculiarly inti-

mate nature, as if someone on the inside of William's affairs had had a hand in their preparation. It disconcerted the family not a little.

This, after all the warnings and rehearsals, was a sad slip. It hit Buderus particularly hard. Here he had been harping for three years on the discreetness and self-sacrifice of the Rothschilds, and now he must report that! He would have to do a deal of explaining, and stress the far greater losses which the faithful bankers had prevented.

The unerring intelligence that guided Savagner's men

in the questioning seemed also to inspire their search through the buildings. To the riot cellar, where William's boxes lay interred, they miraculously did not penetrate. But the way they hustled through the stores of merchandise and eyed each piece of English stuff betrayed a remarkable expertness. With every identifying mark removed, they could naturally do no more than think things. But their discoveries and the Rothschilds' halting explanations forebode trouble in the future. It came the following year, and hit many other people besides the Rothschilds.

be for the Rothschilds to play with. Lastly, though they were careful not to come out into the open, they rather felt that a bit of quiet intimidation would have the desired effect on the faint-hearted refugee.

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The customs authorities in Paris had been aware all along that a lively trade in contraband was going on across the Channel and the North Sea. Some of Napoleon's advisers had for some time, therefore, been in favor of modifying the Edict of Berlin. The blockade, obviously, did not prevent Britain from selling her own and her colonies' products on the Continent; it merely robbed the imperial treasury of much needed revenue. Would it not then be wiser to open the coasts to a limited list of articles, tax them heavily, and use the money to tighten the restrictions on the rest? The Emperor, being a soldier, not an economist, was not moved by this logic. He was determined to strangle the "nation of shopkeepers;" besides, though there was doubtless considerable smuggling, the extent of it was, he thought, much exaggerated.

The police news from Frankfort, however, in the summer of 1809, obliged him to change his views. It was not so much that the premises of a particular merchant family named Rothschild had been found to be crammed with goods of suspicious origin. It was the inescapable conclusion to be drawn from that accidental discovery that was disquieting. Frankfort was a great, bustling commercial center. People of all kinds were getting rich there every day. Never in all its history had it been as prosperous as in these last two years since the Continental Blockade. Was it not evident that others besides the Rothschilds were engaged in the forbidden trade? And Frankfort was only one town.

It was many months before this reasoning could reach the Tuileries. Napoleon was that year divorcing Josephine and marrying Marie-Louise, as well as winning fresh victories on the battlefield. In August of 1810, however, he took action. The Edict of Trianon, dated that month, left the restrictions on British manufactured goods unchanged,

It is a fact, however, that from this time forth the smuggling of goods ceased to be a part of the firm's commerce. Whether this was because they had tired of being eyed with suspicion, or because the blockade was too efficiently maintained, or because they found some new outlet for their energies, remains to be seen.

Certain it is that the authorities, aided as usual by

jealous people in Cassel and Frankfort, continued to burden the house with its attentions. Indeed, the most irksome display of French mistrustfulness toward the family was not to occur till a year later. But of that in its place.

CHAPTER VI

THANK GOD FOR NAPOLEON

EARS later—it was in 1834, to be precise— Nathan Rothschild told friends at a dinner party in London how he had got his start. He said, among other things:

"The Prince of Hesse-Cassel gave my father his money; there was no time to lose; he sent it to me. I had £600,000 arrive unexpectedly by post; and I put it to such good use that the Prince made me a present of all his wine and linen."

This bit of reminiscence has had a curious destiny. The many authors who have since written about the history of the family have treated it either as literal truth or as an out-and-out invention. It is really neither. It is simply fact, slightly embroidered. Nathan did receive £600,000 of the Prince's money—and a little bit over—and he did put it to excellent use. Only it came to him neither unexpectedly nor in a lump. Whether the Prince was so grateful for the way Nathan used it as to make him a present of anything, appears more than doubtful. Several barrels of wine from the palace cellars were during the exile actually stored with the Rothschilds, but His Highness not only asked them back on his return but was rather horrid about it. Of linen the records say nothing at all.

The plain truth of the matter is that Nathan begged and schemed for that money, and left no stone unturned to get it, for all of two years; that it was two years more before he got anything like the entire amount; that, though he invested it so skilfully as to make the fame and fortune of his whole family, the Prince was so little pleased with the relationship that he threatened to withdraw from it altogether; and lastly, that while William lost little money by the transaction, he worried and fretted himself almost into the grave over it, and had to wait years before Rothschild even began to give him the accounting he demanded.

was the good of having Buderus in the firm if he could not do a little thing like that?

Almost immediately after this cold rebuff, however, the prospect brightened. The very next month, as will be recalled, Buderus did journey to Itzehoe and succeeded in calming his master's fears. The effect of that reassurance was—not, indeed, to evoke the hoped-for half million sterling—but at least to dispose the Prince favorably toward the firm in case he should some day decide to put

more money into Consols. Hardly had that preliminary been disposed of than along came Napoleon to attend to the rest. In the ensuing fifteen months or eighteen, political and military events so shaped themselves as to destroy virtually every other investment market for the Prince's millions and to leave him scarcely any other choice.

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The years 1806-08 were a period of uninterrupted catastrophe for the Electoral finances. One after another Prussia, Denmark, Austria, Russia—all the smiling lands where he had for long years been reaping such rich harvests—became submerged. The Bonaparte inundation gradually spread over and engulfed them. Some were conquered outright, others succumbed to alliances with the usurper, the rest were driven into bankruptcy.

The greatest of these calamities was, of course, the seizure of his own beloved Hesse and contiguous lands. Yet so long as the reasonable Lagrange Governor-Generaled it there, some hope remained of an arrangement whereby investments at least might be made secure. But then, with tragic swiftness, came King Jerome, Lagrange was bidden to go elsewhere, and Napoleon—whose inexorableness toward William was mainly an affection for his money—redoubled his efforts to collect the refugee's loans. By offering the borrowers increasingly tempting rebates, by threatening them with penalties if they failed to pay up, and by promising rewards to all and sundry for informing against recalcitrant debtors, the Bonaparte brothers succeeded in collecting a round six

million thalers, in addition to the much larger sum which Lagrange had previously been obliged to turn over.

That did for Hesse and vicinity. It did also for Russia. For the same treaty which had made Jerome king had tied the Tsar by an alliance to the Napoleonic chariot.

Next came the turn of Denmark. When William fled there in the autumn of 1806 that country was still neutral. A year later, however, England had in self-protection found it necessary to bombard Copenhagen and seize the little kingdom's fleet; with the result that Denmark was likewise driven into the arms of the enemy. Thereafter William's unhappiness over the Holstein peasantry's boorish manners was aggravated by a vague feeling that his continued presence on Danish territory was both dangerous to himself and embarrassing to his hosts. The king, who was both his nephew and his debtor, was polite to be sure, but in subtle ways he made it evident that his uncle's departure would be viewed with relief. So William found it prudent to collect his boxes and things and go wandering again.

At this juncture it was that Prussia too fell from grace. As a field for investment that kingdom had in fact hardly counted since she had been bagged by Napoleon at Jena two years before. But now she added insult to insecurity. At the time of his flight the Prussian king had invited the Elector to come and occupy one of the royal palaces as his guest. In his present quandary William bethought himself of that offer and reached out a feeler with the intimation that he might now be persuaded to accept; to which His Majesty replied that nothing would make him happier—if Serenity would first obtain the consent of the Emperor Napoleon! Surely no self-

respecting Prince could consider lending money on any terms to people who insulted one that way.

The Emperor Francis of Austria, it was true, had shown a more hospitable spirit, and had willingly let the homeless Prince find asylum in the capital of his Bohemian kingdom. But Austria was a bad risk. William had had no end of annoyance in his dealings with her. Already five years before her finances had come to such a pass that she must stop paying interest on her debt. Since then continuous war and invariable defeat had all but ruined her. The Austrian paper currency was almost worthless and the state was on the verge of bankruptcy.

The result of it all was that by the end of the year 1808 William found himself with money accumulating on his hands, loan after loan coming due, and no place to put a thaler safely out to interest. Next to the loss of his throne, this was about as distressing a situation as he could imagine. Then it was—but not till then—that Buderus came forward with a bright idea. Why not Consols? In these dreadful times, they had proved almost the only safe investment. They were now cheaper than they had ever been in their history or were likely to be at any time in the future. . . And, in passing, why not commission the House of Rothschild with the deal? They were anxious to be of service, they were as always willing to work for less than others (like the Van Nottens, for instance) and they had a capable man right in London. The Rothschilds, like the Consols, had been a rock in adversity for Serenity. When fair-weather friends had run to cover, they had stood by loyally, dependably, unself-ishly, without a thought of the risks to their own lives and fortunes.

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For once William agreed promptly and without dickering. There was really nothing else to do. Those idle thalers were worrying him nearly as much as those much too active Bonapartes. He grasped at Buderus's suggestion gleefully. In the two years between February 1809 and December 1810 he authorized three purchases of "Funds" amounting in all to £550,000. As the accruing interest was also to be invested in the same security, the grand total came up to considerably more than the figure named by Nathan in his after-dinner reminiscence of 1834.

The Rothschilds, too, were as good as their word. They had said they were going to do this business for their noble patron without a thought of self, and they meant it. They waived commissions entirely. All they asked was a nominal brokerage fee of ½8%, based on the face value of the bonds, to cover portage and incidental costs. They did not care to make any profit whatever. As the securities were bought at an average of 72, their services cost the investor the altogether negligible sum of a thousand pounds. A mere thank you. William was delighted.

To Buderus, likewise, the bankers behaved handsomely. They had intimated that if he would put through that long-coveted deal, they would show their appreciation in a large way. The very day the Prince's consent was received Buderus was presented with a generous block of stock in the concern and the old verbal understanding was formally reduced to writing. The document is dated February 17, 1809, and reads thus:

"The following agreement has this day been concluded between the War Privy Councilor Buderus von Carlshausen and the mercantile firm of Meyer Amschel Rothschild in Frank-fort:

First. Buderus has invested with the banking house of Meyer Amschel Rothschild the sum of twenty thousand florins and has promised to assist the said firm with counsel and in other ways to the best of his ability.

Second. The House of Meyer Amschel Rothschild promises, on its side, to give the said Buderus a faithful accounting of its earnings upon the above-named capital stock of twenty thousand florins, and grants him the right of access to all the firm's books at all times, to the end that he may be sure of the most equitable treatment."

William's rejoicing gradually sobered down as time passed. He had expected, it would seem, that the London Rothschild would the moment Serenity's order reached him hurry to the nearest broker's, buy the bonds, rush with them to the Bank of England, and having duly registered and deposited them, forward the certificates to Prague by the first boat. It was, on several counts, a vain hope; and only goes to show how naïve a great capitalist (and Fuerstlichkeit into the bargain) may be. In the first place, Nathan did not actually receive any such thing as £600,000, nor even £150,000 all at one time. William sent him his order, and then took his time to furnish the wherewithal; he was relying for the funds on maturing loans, and dribbled them out in monthly instalments as they reached him. For Nathan to have executed the commission immediately and in full would have meant that he must tie up his own capital. He had no capital. It was to secure that commodity that he had prayed for this business all this long while.

Then there was another, even more persuasive reason why Serenity must be disappointed. By the terms of the contract the exchange rate for sterling as well as the price of Consols was fixed at a definite figure, win or lose. Now the Napoleonic wars had already brought both the English currency and the English "Funds" to a lower level than they had ever known; and more wars were coming. The chances of a further drop were therefore excellent. A little waiting was likely to be worth while. As a matter of fact, Consols did fall approximately ten points before Nathan got around to buying them, or at least to delivering them.

Lastly, what did that pig-tailed innocent back there in Prague imagine the Rothschilds were doing this thing for? Did he really suppose that six able-bodied and agile-minded men (not counting Buderus) were going to give their time and labor for a brokerage fee which would hardly feed their horses and keep their carriage in repairs? Or did he imagine that they were so naïve as not to know what to do with money when they got it into their hands?

Well, William had not stopped to consider all these questions before he gave his orders. He began to wonder a little now. Months passed, a year, two, three, and no certificates came—not a scrap of a receipt from the Bank of England to show that a man named Rothschild had deposited Consols there in the accustomed way. He became a bit uneasy. A doubt arose in his mind: Was his money safe at all? To be sure, communications were chaotic. The blockade did make travel unsafe; and entrusting valuables to the mails was out of the question. And yet, the money from this end seemed to be reaching London somehow. Was there any more risk in one direction than in another?

He began regretting Denmark and giving ear to Aus-

Austria now—true, she was in a muddle. But at least she was not away off at the other end of the world like London. And could anything be less safe than Consols with such brokers? Moreover the Emperor Francis had been a magnificent host; had given him an honor guard and otherwise treated him as a visiting sovereign. All in all, Prague was the nearest thing to a home that he, William, had had since he quit Cassel. Besides, Consols brought $3\frac{1}{2}\%$ , while the Austrians were prepared for almost any

terms; they needed the money so badly. No, he would think twice before he declined their proposals.

So he wrote Buderus to ask what he thought of the matter. Buderus, of course, informed his Frankfort associates of what was brewing; and these, terrified at the menace to their London enterprise, were at first for vetoing the Austrian plan out of hand. Upon deliberation, however, a subtler course was adopted. Let Serenity meet his hosts half way, by all means. There were some six million thalers outstanding among thirty-odd debtors here and there and everywhere, which for a variety of reasons—chief among them the long arm of the Bonapartes—were uncollectable. Why not have William suggest to His Viennese Majesty that he take them over? In that way Austria would have what she wanted; Serenity would get his bad debts into a single, relatively safe, place; Nathan's operations in London would continue unembarrassed; and everybody would be happy.

That strange man in Prague actually took up the scheme. He saw nothing ridiculous about a Hapsburg turning sheriff for his benefit. So he informed Vienna that he would be most happy to tide over His Majesty, if the latter would persuade his son-in-law Napoleon to let him collect certain loans due the Elector of Hesse-Cassel, a list of which was herewith appended. The proud paupers in the Austrian capital, however, did not seem to take kindly to the idea; for the Emperor had his treasury people write back, a bit ironically, that he appreciated the Elector's thoughtfulness and goodwill, but felt the offer did not quite comport with the dignity of the imperial and royal state.

This was in the spring of 1810. All through the summer, consequently, William saw with a heavy heart his strong-box filling up and no outlet in sight. By September he must therefore again listen to Buderus's counsel and authorize the London Rothschild to invest for him a third £150,000 in Consols.

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And all the while no sign of a Bank of England certificate, not even for the first purchase, ordered now nearly two years ago.

He gently prodded Buderus. "I am not unaware," he wrote, in effect, "of the grave risks involved. I have the fullest confidence, too, in the wisdom and loyalty of the Rothschilds. Yet here it is more than a year and a half now since that first contract was signed. Don't you think that in all that time a way might have been found to forward that document to me? It seems to me odd that there should be so much hesitation and delay, when the remittances from this side reach England month after month without loss. Would not the same precautions, whatever they are, serve also in an easterly direction?"

Buderus began to be nervous. He warned his Frankfort people that the air was becoming electrical, that a storm was gathering, and that something had better be done about it soon.

At this juncture the diplomat of the family had an inspiration. Short of handing Serenity the certificate itself—which obviously was impracticable so long as the Consols were unbought—there was nothing in the world would so delight his soul as a little concession on the new

contract. The firm could afford it—it need not be more than a trifle anyhow—and it would relieve the tension. In October, therefore, Buderus was able to write: "After much persuasion and effort I have succeeded in cutting down Rothschild's price on the third Funds investment one-quarter percent, thus saving Your Serene treasury 4521 pounds." Nevertheless he felt it desirable to add: "The certificate for the first investment will be brought over by young Rothschild as soon as there is the slightest chance of safety."

And William was even more pleased than had been expected. He not only did not cancel his recent order; he raised it to a quarter of a million! That, however, did not prevent him from reminding Buderus that he was still waiting for his receipt. "I instruct you at the same time to see to it that the document for the first investment reach me now without delay and that the others follow as soon as possible."

Just then, however, Buderus was obliged to report some unpleasant news. No more than a fortnight after his last letter came the great raid on the Frankfort business houses. He gave William a terrifying account of the event. "The Court-Agent Kalmann (Karl) Rothschild was about to start for Prague when several French regiments marched in with artillery and a great number of customs men, seized all the City's gates and ordered no one to leave . . . I have taken all conceivable care and I can only give the highest praise to the sons of the Superior Court Agent Rothschild for the indefatigable concern and zeal with which they have shown their devotion to Your Electoral Serenity."

Moreover: "New incentives have been offered infor-

mers and borrowers to bring about the liquidation of Your Electoral Serenity's loans, by assuring them of a reward of fifteen percent, and the quantity of spies and traitors under every disguise is so great that no one can be trusted any more."

Finally: "As soon as it is possible I shall see that the Court-Agent Kalmann Rothschild leaves Frankfort with the packs."

Without saying so outright, Buderus evidently meant to convey that the Bank of England certificate would be contained in those delayed "packs." But five months later, nothing of the sort having arrived in Prague and William having again made inquiry, Buderus tells him: "Young Rothschild is really going to London to fetch the receipts for the Funds investments." Incidentally: "His father has, without my asking him, succeeded in collecting 160,000 florins from Copenhagen. Will Serenity permit me to express to him Your satisfaction at his manifold endeavors in this connection." Then: "I am notified by Rothschild that the police in Prague have discovered the secret drawers in his carriage. I have therefore thought it prudent not to send along my accounts for last month and enclosures. These cannot be concealed in the clothing like letters."

Whether or not young Rothschild went to London, he did not fetch the receipt for the Consols. At any rate six weeks more passed without any such document reaching its anxious owner. Wherefore, though William obligingly forwarded the requested thanks for Rothschild, he must say: "I had no idea that the police here have found out the secret hiding places. There is in any event nothing to fear at this end . . . I am looking forward with gen-

uine longing and justifiable eagerness to the Funds documents."

The summer was half gone and still nothing had arrived. William, despairing of ever accomplishing anything through Buderus, bethought himself of another channel. He instructed his envoy in London to make direct inquiry. What was his astonishment to learn that this was the first Lorentz had heard of the whole matter! Buderus had never said a word to him about Consols. And not only that: The Funds were down to 62 and still falling!

Then the dykes gave way. "I am distressed beyond words," he notified Buderus, "and am looking forward with genuine yearning to your explanation.

"Till then please stop all further payments against the Funds.

"Neither are any more interest moneys to be reinvested therein.

"Lorentz must be kept informed of all My English financial affairs. Especially must he know about the capital invested for Me by Rothschild so that he might as My chargé d'affaires keep an eye on it.

"I request you to attend to this without delay."

The effect produced by this bombshell in Frankfort may well be imagined. Buderus wrote often and sorrowfully of the already well-known dangers of carrying valuable documents across the Channel, of the tireless efforts of all the Rothschilds to satisfy Serenity's genuine longing, and of the inadvisability of confiding business secrets even to accredited chargés d'affaires. Kalmann went to Prague and argued and pleaded in person. But William was adamant. For the better part of a year nothing would induce him to authorize the payment of a solitary thaler

to London. There is no telling what might have been the consequence of this obstinacy, if by a rare piece of luck Buderus's deposits in the Rothschild bank had not just during that period risen to quite unusual figures. Whereas in September (when the stoppage order reached him) his account showed a balance of less than 30,000 florins, it now gradually began increasing so that by spring it was 360,000—which was slightly over the normal monthly instalment remitted to Nathan.

The embargo was at last lifted in May. For though Buderus had repeatedly assured his master that no pressure would or could in the slightest degree affect the blockade, the first certificate did brave the Channel that month, after nearly three and a half years of faint-hearted hesitation. A second followed within less than a year.

By 1813, however, the House of Rothschild could afford to be indifferent to both the millions and the wishes of the Elector of Hesse-Cassel. How this consummation was effected in so brief a time will appear in the pages immediately following.

PART II

CHAPTER VII

AID AND COMFORT TO WELLINGTON

What might it all mean?

The phenomenon remained a mystery. No Frankforter

had the remotest inkling of the Elector's recent English investments, still less that the Van Nottens had gone the way of the Bethmanns, least of all in what manner their successors were employing the enormous wealth thus suddenly dropped into their laps. Even those who were in the secret were scarcely aware of all that was happening. Buderus, for instance, who had had some little part in the initial proceedings, might have found it difficult to expound their present ramifications with anything like certainty. It is doubtful whether the titular head of the House of Rothschild himself was abreast of the details. The business was much too complex and confidential and far away for Frankfort to follow. And the young men were much too preoccupied to report back with any frequency.

In the beginning Nathan's thought in reaching out for a bit more of William's surplus had been simple enough: he could use it advantageously in expanding his contraband operations. If he got all he hoped for, he might, indeed, discover a few things to do on the Royal Exchange. But that miser back there in Prague hung on to his thalers with the grip of death. He sent him authorizations—as if one could do business with a scrap of paper—and then tremblingly dribbled out instalments. For the better part of two years, therefore, anything more ambitious was not to be thought of. Besides, defying Napoleon had its rewards. Then just as the monthly remittances had accumulated to a sizable sum came the Edict of Trianon and emasculated the blockade to a tame, more or less legal and not especially remunerative business. Some months later followed the great raid on Frankfort. That was the final blow. Willy-nilly something must be found to take the place of contraband.

Obviously the whole performance was silly from beginning to end. So long as there was a land route between Portugal and London it was sheer incompetence to try to send money by water and take all the risks. That, however, was the government's affair. What interested Nathan was the brainlessness of those scalpers, "The Cab," as they were called. Their paper eventually must find its way to London, or it would not be worth buying at all. And so long as it arrived eventually, there was no good reason why it should not get there directly and the proceeds stay in one hand.

Well, he had the organization, he had the capital, and he was willing to give the game a try. It was an enterprise exactly to his taste. It afforded all the adventure and rewards of the late lamented contraband trade. Why, it was in fact really nothing but smuggling of a new and peculiarly interesting kind. His Continental brothers would take to it as fish to water. Their five years of blockade running had them left as fit and agile as athletes. Add to that the equally ticklish courier work for His Highness, and there was not a more competent or better trained staff for the job anywhere between Lisbon and London. False papers, disguises, bogus names, secret caches, official-bribing—all the tricks and dodges of the spy—were old familiar things to them. It was not by prayer that they had become successful men of affairs in time of war.

'n

Quiet, home-loving Amschel was persuaded to relieve Kalmann (Karl) of the Frankfort-Prague route. Father took over the diplomatic mission of contracting Buderus. The goods trade at home, stripped down to a bare skeleton, became the province of the unmarried girls, Gotton (Julie) and Jettchen (Henriette), flanked by their sisters-in-law. And mother Guetele kept house for her family as usual, leaving business to those who fancied and understood it. Thus liberated, the three youngest and ablest male Rothschilds could dedicate themselves to the new venture. Blessed by their parents and their women, they pushed off silently while Frankfort slumbered. Ignorant of any language but Jewish-German, they threaded their way across frontiers, over hostile country, through armed outposts; paying when they must, dodging where they could, confident of their well-filled purses and their own stout hearts; and presently bobbed up on the Western rim of the Continent to keep the tryst with Nathan.

The two youngest men took the ends of the line—Kalmann the Pyrenees, Jacob the Channel coast. Salomon, the persuasive and diplomatic, stationed himself between them, in Paris. In the nature of the case, London remained the headquarters and terminus, as it had been the originating source, of the enterprise. The chain complete, the machinery could begin to function. Kalmann speedily entered into relations with the merchants along the Franco-Spanish frontier, offering to buy from them whatever notes of the British commander they might acquire in trade. Mutual safety required that the commerce be kept dark; the Spanish shopkeepers understood that. They may or may not have understood, further, that too much advertising tended to force up prices. As soon as Kalmann had got together a sufficient quantity of Wellington's paper, he headed north with it; Salomon at the same time quit Paris; along the route somewhere the brothers met, exchanged satchels, and then faced about. Avoiding the capital, Salomon journeyed on toward the Channel, found Jacob at an appointed spot, and the performance was re-

peated. From Dunkirk or Gravelines London was but a jump, and in London the almost worthless drafts became legal tender acceptable at par. The water-stage was at first attended to either by Nathan traveling south or by Jacob going north; later on dependable English sea-captains were commissioned with the task.

This was the colorful and exciting aspect of the venture. Danger of the most breath-taking variety attended every link of the chain. It was espionage and commerce with the enemy, and the penalties for these offenses were, then as now, brief and final. The smallest slip of eye or foot brought one face to face with the guillotine. Of course, the brothers were not so reckless as to neglect precautions. Itching palms were generously greased all along the route from the mountains to the sea; on the Narrows the prefect of police of the Pas de Calais Department himself lived so prosperously on the Rothschilds' bounty as to attract the critical notice of his superior in Paris.

But the business was not all poetry. The pedestrian element was to find the shining metal cash, which alone was of any use to Wellington. Toward this consummation Nathan contributed more than his share, both with substance and ideas. He had anticipated the problem from the beginning and had arranged to meet it. Each man in his territory was between trips quietly picking up all the yellow loose change he could get his hands on. The light-footed Jacob was particularly active, not only in France but also in Holland and elsewhere; Salomon helped out from Paris and the larger towns of his route; and Nathan himself did his best to turn Wellington's drafts into guineas. Kalmann, at the extreme end of the chain, had his hands full collecting the paper. All of them had to

work with the utmost circumspection, not alone because exporting gold was everywhere forbidden, but principally because of the influence on the exchange.

Sooner or later, however, the traffic was bound to hit a snag. After half a year of combing the world for gold there was no gold left to comb. Every country in Europe was on a paper basis; what little coin was still in circulation was, as always in times of inflation, being hoarded; the rest had, by the Rothschilds' own efforts, rolled down into Spain. The difficulty seemed insuperable. The British authorities ought, of course, to make things easy; the Rothschild consortium was doing their work for them, and rendering a patriotic service to England besides, in the face of the gravest danger to themselves. But those complacent and unimaginative men at the royal exchequer knew nothing about the consortium or its work, and if they did know they might take it into their heads to spoil the game. It would be not unlike them.

But Nathan still had a shot in his belt. He took to haunting the curio shops, the old metal-dealers, the junk yards and the bullion market. It was not long before the trade came to know the paunchy young man with the inscrutable face as a buyer of unlimited capital who paid the highest prices for everything made of gold. When therefore the East India Company brought in a large shipment of gold bars, Nathan was one of the first to get wind of the event. The lot was to be sold at auction at the Company's offices. Nathan showed up early and bid so lustily that the entire shipment, valued at close to a million pounds, was knocked down to him. Thereupon word went out over the Channel to Dunkirk that all was well.

Ш

But the good news proved to be a little premature. Before Nathan had had time to remove his treasure, let alone get it across to his brothers, a very official-looking document was brought to him. It was a letter signed John Charles Herries, Commissary General, inviting him to be so good as to present himself at that gentleman's office for a conference. Mr. Herries, who had expected a rather impressive personage of the customary City dimensions, was not a little taken aback to see this very unprepossessing, ill-groomed Continental being ushered into his presence. His surprise was heightened when the visitor began speaking. Could this be the man at all who drove bargains involving hundreds of thousands of pounds? Never before had the English tongue been spoken with such an accent in His Majesty's offices. But as the interview continued Herries found himself listening with close attention to what his guest was telling him and forgetting altogether the oddity of his idiom.

The Commissary General began by inquiring whether it was true that Mr. Rothschild had acquired a certain quantity of gold from the East India Company, and upon receiving an affirmative answer, went on to say that His Majesty's Government would consider its repurchase at a given figure. There happened just at that time to be a military expedition on the Iberian Peninsula; it was the duty of the Commissary General to supply the army engaged in that enterprise; owing to the blockade great difficulty had been encountered in shipping provisions in natura; and according to the officer in command, he could readily live on the country providing he had the

necessary funds. The government, therefore, desired to secure the bars in question for that and kindred purposes. Mr. Rothschild, being a British subject and patriot, was entirely ready to comply, for a consideration. If he might be permitted, however, he would like to ask just how the authorities proposed to reach Spain. He had no wish to pry into state secrets; only as it happened he had acquired the metal for that identical purpose. He had, if the truth must be told, been doing his humble part in keeping the Peninsular forces alive for some little time past. Naturally, he had not attempted to ship by water. As the government had doubtless found out for itself, that route was not quite safe. Fortunately there were other ways, which, if the Commissary General cared to hear of them, he would be glad to explain.

Nathan sketched in outline his organization, his methods, and the recent hardships he had had to face in consequence of the growing scarcity of gold coin on the Continent. As a private person, he could not, of course, honorably do the things that the situation demanded. There was, on the other hand, no reason why the state should stop where he must. It could, for instance, in a time of national peril like this, produce French napoleons and Portuguese ounces in its own mint without asking the permission of the governments concerned. There were other short-cuts, too.

Herries not only cared to listen; he was so hugely impressed with what he heard that he invited Mr. Rothschild to put himself and his organization at the service of the British government. Nathan was aware that the East India gold, purveyed down to Wellington in the old way, would have brought many times the returns he was

getting from Herries. Still, low profits never yet ruined a merchant; he was disposing of the whole thing in a lump, without effort or risk or worry. And, lo! he had made a priceless contact with the English Treasury into the bargain. In that 1834 after-dinner reminiscence, already quoted, he described this day's adventure as the best piece of business he had ever done. Well he might! Nothing that had ever happened to the Rothschild family, since the Elector's flight five years before, was destined to mean so much for its future.

IV

While these happy events were occurring in England, the mainland was becoming uncomfortably warm under the other Rothschilds' feet. The curious Frankforters, though still baffled as to the nature of their young fellow-townsmen's affairs, had traced their whereabouts. The locale seemed to them suggestive. Enterprising business men did not go to French seaports for the salt and the bathing. Therefore the imperial authorities began receiving hints, in writing and otherwise, that the undefined activities of a certain trio of brothers would in all likelihood repay looking into. The communications in due course were forwarded to police headquarters in Paris, and thence to the prefect of the Pas de Calais department. It became the unpleasant duty of this well-disposed official to warn his young friend Jacob that matters were passing beyond his control and that it might be best to go while the roads were still open.

Jacob had rather been thinking so himself for some little time past; so he took good advice when it was given him. Early in March, 1811, he therefore dropped everything and sank out of sight. Much as he disliked saying anything about his movements even to the discreet Frankfort authorities, he felt it necessary to regularize his status; and it was better to confide in the good archbishop than to risk unpleasantness in Dunkirk. Dalberg, as it happened, was himself getting ready for a journey to France. Marie-Louise was about to present Napoleon with an heir to his throne; and throughout the empire and its dependencies well-disposed chiefs of state were arranging to assist at the grandiose ceremony with which that long-awaited event would be attended. The pope himself was to baptize the eaglet; and Dalberg, apart from wishing to pay homage to his secular chief, deemed the occasion good for bringing certain matters in which he was interested to the attention of his spiritual overlord as well. But going to Paris in such circumstances required money, a great deal of it. Old Meyer Rothschild, the moment he learned of his friend's difficulty, cheerfully offered him a loan of eighty thousand florins

Naturally, therefore, when, as chance would have it, a son of the generous lender needed a little favor at that very time, the grateful Grand Duke could hardly refuse it. James obtained not only a passport duly visaed with which he could return to France openly; he got something in addition which, as time soon proved, was infinitely more valuable still. Dalberg gave him, namely, several letters of introduction to important Paris banking houses, including one to Count de Mollien, the imperial minister of finance.

Noblesse oblige. It would not do for one coming so highly recommended to slink about in the dark. Consequently James laid his cards before de Mollien with the most engaging frankness. He had, he confided, a brother in London, with whom he was in constant touch, and from whom he received at intervals shipments of English gold. As to the ultimate destination of the metal he was a bit reticent; but he communicated enough for de Mollien to draw his own conclusions. And Napoleon's minister of finance who, it seems, did not quite measure up to his generals, perceived at once that a country which was so stupidly governed as to let a thing like that happen could not but be on the brink of economic disaster. He so told the emperor. He only prayed that this brilliant young Frankforter might be correctly informed. To doubt James's truthfulness did not occur to him. The Frenchman, indeed, was so convinced of the boy's sincerity (James was only nineteen years old) that he took him under his wing and shielded him from annoyance at the hands of other officials.

Savary, for instance, the imperial minister of police, was inclined to be skeptical. Here, he figured, was a much too plausible stranger from a conquered province who, while pretending to have nothing to hide, was carrying on a very doubtful kind of commerce with an associate in an enemy country. He might be harmless; yet it would be as well to keep an eye on him. So Savary quietly put his subordinates on guard everywhere from Mayence to Paris and the Channel ports, ordering that the goings and comings as well as the mail of all Rothschilds from Frankfort to London be given the closest attention.

Unfortunately for this loyal and astute servant of Napoleon, the Rothschild movements, and especially the Rothschild mails, were not as susceptible to observation

But as Monsieur Citiz in Hamburg was informed neither of the family's methods nor of its enemies in Cassel and Frankfort, he took the intercepted document at its face value and promptly forwarded it to his chief in Paris. Thence a hue and cry went out to secret police headquarters in Mayence, to ambassador Bacher in Frankfort and to the coast guard at Dunkirk and Gravelines urgently requesting that the affair be pursued to the limit and the various persons named taken under close surveillance. Bacher, in his reply, suggested proceeding cautiously, lest the suspects take warning. Dalberg, as usual, made light of the whole matter, and gave the meagerest coöperation. From Mayence the report stated that the House of Rothschild had since the raid of the previous year apparently given up smuggling and now confined itself to trade in legal merchandise and banking; that their sentiments toward France, while correct on the surface, were far from loyal at heart; and that Dalberg was for some unaccountable reason so thick with them that he refused nothing they asked of him.

The correspondence on the subject was kept up with undiminished zeal for several months. Every day, it seemed, the French net was about to close on the elusive gentry. It never did, however; and in the end, the pursuit which had so hopefully begun was abandoned for lack of results. It would, in fact, have been given up sooner, if in the midst of it, one or two even more suspicious looking letters had not been picked up on the coast as well as, again, in Hamburg. This time the internal evidence showed unmistakably that the police had in their hands genuine correspondence between one Rothschild and another. What was especially noteworthy was the circum-

stance that one of these documents was discovered not in the mail bags but on the person of a courier. If these gentlemen's operations were as pure as they pretended, why should they try to avoid the regular postal service? Their excuse that the letter had missed the mail and had been rushed to the port so as to catch the boat, was patently specious. Besides, the contents were hardly reassuring. James was telling his brother in London that he had duly received several shipments of English and Portuguese gold coins, and that he had got drafts for them from the bankers in Paris!

Savary and the military governor at Hamburg were, therefore, in favor of speedy and summary action. They wanted James arrested, and at the very least expelled from France. They were so sure of the treacherous character of the brothers' activities that they carried their conclusions to the emperor himself. But Napoleon dismissed their fears with a wave of the hand. Why, de Mollien had been aware of the traffic all along. It was quite all right.

And all the while Nathan sat at a desk in Commissary General Herries' office in London, or traveled under his orders on the Continent, to all practical purposes an official of the British government; and hundreds of thousands of pounds in gold—English guineas, Dutch ducats, and French napoléons-d'or, the latter either collected in France itself or minted in London—were quietly, unobtrusively, without disturbing either the bourses or anybody's blockade, rolling down into Spain to feed and clothe Wellington's Peninsular army. Suddenly, upon returning from his disastrous expedition to Russia, Napoleon woke up to learn that the British general—the man who was so soon to crush him at Waterloo—had somehow extricated himself

from the impasse that had so long held him fast beyond the Pyrenees and was marching his well-fed and wellequipped forces into the southern provinces of France.

V

There seven generations of his ancestors rest with him, but not a single one of his descendants.

Meyer's will was designed not so much to dispose of his estate as to secure the future. The business was left absolutely in his sons' hands. To make sure that his daughters and their husbands would not interfere, he went so far as to sell out his own share to his male heirs. The hundred and ninety thousand florins thus realized, were, apart from his home, distributed between his wife and his ten children. "I direct and desire, therefore, that my daughters,

my sons-in-law and their heirs shall have no part whatever in the existing firm of M. A. Rothschild & Sons, and that still less shall they, on any pretext whatsoever, . . . claim the right to examine the said business, its books, papers, documents, inventory, etc. . . . And I shall never forgive any of my children if they should against this my paternal will take it upon themselves to disturb my sons in the peaceful possession of their business." Moreover, the entire inheritance of his wife and daughters must remain in the sons' keeping, to be used as capital in the firm and to receive interest at five per cent.

CHAPTER VIII

THE GOODNESS OF MR. HERRIES

UST what had the trusteeship of William's English investments netted? No one, perhaps not even the brothers themselves, could have said exactly. Certainly those six hundred thousand pounds had been productive in their competent hands. Had they multiplied five or six times, eight or ten, in those four epochal years? Had the capital (costing three per cent) earned a hundred and fifty or two hundred and fifty per cent? They did not take the time to figure it out. They were too busy, their holdings were too scattered; and anyhow what mattered a few hundred thousand more or less to men who had overnight become millionaires in sterling? Besides, they were not quite such materialists as to miss the essential point, which was that the cash dividend was a small thing beside the friendship of the British Commissary-in-chief.

With the entry of Mr. Herries, indeed, the center of gravity had shifted from Frankfort to London. Nominally the concern still rotated about the old home office; and Amschel (renamed Anselm), as the eldest of the five, was chief. In reality the leadership had long since passed to Nathan. It was he, to begin with, who had conceived the great plan which had enriched them all, and had set up the organization to carry it out, and it was he who had made the contact with Herries and must go on cultivating it. For a good while to come, clearly, Herries was destined

to play a part roughly resembling that which Buderus had lately filled. Hesse-Cassel had served its time, and would henceforward fade out of the picture, to be supplanted by His Britannic Majesty's Treasury Department. Therefore, regardless of age and priority, and quite apart from natural talent, the man who sat in London would inevitably be de facto head of the firm.

Nathan and his brothers did not have to be trained statesmen to foresee, in outline at least, the history of the next few years insofar as it concerned their interests. So long as Napoleon remained emperor of the French, England would go on making war on him. The difficulties she had hitherto encountered in supplying her forces were not likely to diminish; and that being the case, there was no reason why Herries, or whoever was charged with his duties, should not continue using the Rothschild plan and the Rothschild organization which had proved so effective in the past. In reality, these calculations erred on the side of conservatism. As the Napoleonic interlude approached its final phase the problem of transferring British funds to the Continent became graver and more complex than ever.

Ever since Austria had signed the Treaty of Vienna in 1809, the German states had been at peace with France. It was not a matter of choice. Nor was it resignation. Prince Metternich, for all his sacrifice of Marie-Louise on the altar of the conqueror, was straining to be at it again. So was the ineffectual Frederick William III of Prussia. So, of course, was the banished Elector of Hesse and the great majority of the lesser princelings. What cooled their enthusiasm was partly an almost superstitious awe of Napoleon and chiefly lack of money. Their economy, anti-

quated and ill-administered at best, had become hopelessly disordered under the stress of war. Defeat, inflation and extravagance had ruined their credit. In Prussia things had come to such a pass that the king was unable to meet his private expenses and was continually harassed by tradesmen and bill collectors. The case of other German sovereigns was at least equally trying.

Napoleon's disaster in Russia in the winter of 1812–13, followed as it was by the virtual annihilation of the Grande Armée, put fresh heart into the German liberators. It did not, however, solve the problem of finance. The Prussian Chancellor Hardenberg no doubt expressed the sentiments of all the Continental Allies when he told England that without pecuniary assistance it was out of the question for his country to fight. Fortunately England was, under her new treasury head, prepared to return to the policy of Pitt and grant subsidies in exchange for soldiers. The very year of the retreat from Moscow Chancellor of the Exchequer Perceval had been assassinated. Vansittart, his successor, managed to convince the Government of Lord Liverpool that the defeat of Britain's great enemy would be cheaply bought at such a price, and that it was in any event unlikely to be had any other way. In the years 1813–15 Parliament appropriated fifteen millions sterling for the support of the Continental Allies, more than two-thirds of the sum going to Austria, Russia and Prussia.

Now arose the old question of remittances. In the past the British authorities had known but two ways of making payments on the mainland, one more costly than the other. They either shipped silver bars or gave the payees a free hand to draw on London. The insurance rates on bullion however, were prohibitive; besides, there was no such thing as fifteen million pounds' worth of silver, or any approach to it, in the whole of Britain. Drafts on London, again, in such enormous quantities not only played havoc with sterling exchange, causing terrific losses to both Britain and her friends; the markets of Europe became so swamped with the paper that after a short time it was nearly impossible to cash it at any price. Thus, in all Berlin Hardenberg could only with the greatest difficulty and at heavy discounts dispose of twenty-five thousand pounds' worth of his English checks, at a time when he had two-thirds of a million to realize. In Vienna the offer of drafts on London in the sum of eighty-three thousand pounds resulted in depressing sterling by several points. The operations must be carried out with the utmost secrecy, and that involved paying commissions to numerous agents, as well as competition on the exchanges between states fighting in a common cause.

At this juncture Herries laid before Chancellor Vansittart the Rothschild plan which had proved so workable in Spain, with the suggestion that it be extended to the subsidies problem. He put stress on the advantages of the new method: it was economical, and it virtually was not felt on the exchanges. What was more, there really was no other way in sight by which any large sums could be transferred to the Continent. Vansittart did not take much urging, and Nathan was sent abroad as the secret agent of the British Treasury to do for the coalition what he had now for some time been doing for Wellington.

In the interval, however, the situation had greatly improved, and it was no longer necessary to go to the danger and trouble of collecting coins. The French were in retreat on all fronts,—it was after the decisive Battle of Leipzig—

The chancelleries could not quite figure out how it was done, but they were delighted to find that somehow and suddenly their checks were being accepted without demur and credited as bank deposits wherever the money was needed. And when Nathan returned to London and related his success, Herries sent a secret report to Vansittart glowingly praising the astuteness of the man who had not only carried out his commission without a hitch, but had in

addition secured seven hundred thousand pounds' worth of checks on Frankfort and Holland for future use; and all this without in the slightest degree affecting the exchange on London! He was quite sure, added Herries, that an operation involving a mere fraction of these sums, entrusted to treasury officials or British diplomatic representatives on the Continent, would have had ten times the adverse effect on sterling.

п

Traders on the Royal Exchange began to take notice of Nathan Rothschild. This pudgy foreigner with the baggy clothes and expressionless eyes seemed to have sources of information inaccessible to anyone else. At least he was acting as if he did. There was the matter of bullion, for instance. Early in the year, when the first rumors of a new coalition began to be heard, with probable subsidies for the Continental states, there was a great boom in the precious metals. Rothschild was the only considerable man on 'Change who was not looking at silver; he was in fact bearing the market. The prophets predicted his ruin. But presently it was learned that the Government had made other arrangements and was not going to ship any cash. That sort of thing happened again and again. Now it was the Funds, and another time it was Continental drafts. He rarely steered with the current, yet almost invariably he touched shore first. He was called a speculator; but he appeared to know, when others merely guessed.

Did he really know? A web of myths began to form about the strange unkempt alien. People talked of the Rothschild instinct, a sort of infallible inner light. Others whispered about a pigeon post, about his brothers in Germany who were reported to be monsters of wisdom, about occult Jewish divinations. No one even gave a thought to the Commissary-in-Chief. For that was a dead official secret, of which no one in the Government itself except the Chancellor of the Exchequer and Mr. Herries's private secretary had the smallest inkling.

Nathan impassively relished the interest he was arousing. His prestige and his credit did not suffer from the legends; they were making him an important man at the same time that his operations made him an enormously wealthy one. As the war progressed he contrived, in fact, to deepen the mystery and to provoke gasps of wonder elsewhere than on the stock market.

Like all exceptional men, Nathan was astonished at the stupidity of the mass of mankind. The Royal Exchange, for instance, was alive with individuals who called themselves speculators. That meant, if it meant anything, that it was their business to read the future, and they really pretended that they were going about it in rational fashion. What they did read in actual fact were the newspapers and the government decrees. That is to say, they tried to make capital from events after they had become common knowledge. It was a case of the halt leaning on the lame; for editors and authorities alike muddled along on general sources of information. Such a thing as exclusive news was unknown in their system. No one seemed to realize the importance of knowing things in advance, not of their occurrence, but of publication. Time after time the Government learned of battles and their outcome from him, hours before the official dispatches arrived, and hours (of course) after he had turned them to

account on 'Change. And when they did learn them they either wagged their heads incredulously or gaped admiringly at his cleverness, but seldom knew what to do with their information.

After the Battle of Belle-Alliance, for example, the Government did hear the results before he did; only what they heard was not so. He got word of a victory for the British troops, and when he brought the news to the Treasury, the officials there laughed patronizingly. Oh, yes, Mr. Rothschild was very kind and helpful, to be sure. They appreciated his desire to be of service. As it happened, however, the Government had got a dispatch from its own people on the ground, and unfortunately there had been a defeat. Later the truth came out, and then the most fanciful stories were invented and believed about the sources of Mr. Rothschild's knowledge.

Then came Waterloo. As often before, it was he who first communicated the facts about that epoch-making event to the authorities. This time there was no shoulder shrugging; they had learned to take him seriously at last. But what legends, in the City and everywhere else, were spun out of that scoop of his! He had himself (so it was said) gone to Belgium, witnessed the battle, then rushed back home to make the most of what he had seen. The tale was embroidered with breath-taking circumstantial detail: how just as he had reached Ostend a hurricane had broken out on the Channel; how after much haggling he had hired a fisherman to take him across and had paid two thousand francs in advance for the service; how on arriving on 'Change the next day he had looked so mournful as to cause a violent drop in the British Funds, the while his secret brokers bought up every piece of scrip they could

get their hands on at panic prices; and much more of the same sort.

back, regardless of wind and weather, whenever any event of outstanding importance had occurred on the Continent. It was thus that Nathan learned of battles and things ahead of the British Government. That was all there was to the mystery.

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but raise the firm's prestige enormously. It promised even to knit a permanent tie with the court, and give James a position there comparable to that of his brother in London.

That was not all. Though the long Napoleonic night-mare was over, temporarily, the impecunious Allies still required, and were by agreement entitled to receive, the British subsidies. It was not entirely out of friendship for Nathan therefore, that Herries now energetically undertook to convince the ambassadors of the Allied powers in London that it would be to their advantage as well as England's to centralize the payments somewhere on the Continent; he was thinking primarily of the economies that arrangement would effect for the British treasury and of the salutary influence it would have on sterling exchange. Incidentally, however, he proposed that the place be Paris, and without naming Rothschild, that the choice of the agency be left to the English financial authorities, which in this department meant the Commissary-in-Chief. The amiable thought behind the proposal was, as in the advance to King Louis, to smooth the path for young James and the remaining Continental Rothschilds.

But the Allies, particularly Austria and Russia, raised objections. They were conservative powers; they liked to do things as they had always done them; besides, they owed favors to their own money-men. The negotiations, moreover, were now conducted with the principals of the Allied governments in Paris itself, whither Nathan had accompanied Herries; and the Eastern statesmen entertained certain sentiments toward the name, the sectarian affiliations and the social and personal traits of such people as Mr. Rothschild. Prussia, being the neediest of the breth-

ren, was more agreeable; and some little progress was achieved with the others after lengthy discussion. On the whole, the project did not promise to have the success that Herries had anticipated. During the remainder of the year 1814 the major Allies continued realizing their subsidies by drafts on London executed through their own bankers.

Early in 1815, while the victorious statesmen sat haggling over the spoils around a green-baize table in Vienna, the alarming news rang out over Europe that Napoleon had landed near Cannes on the Riviera, had been wildly acclaimed by his old followers, and was rapidly collecting an army and marching on Paris. The intelligence had a sobering effect on the Congress. Irritating differences were suddenly ironed out, and the diplomats who had the day before sat glowering at one another embraced affectionately and became allies once more. In a trice the coalition was reconstituted. The armies, dawdling at their ease in France, shouldered their muskets again, reinforcements set out from every corner of Europe, and England loosened her purse-strings and began pouring out fresh subsidies. Under the stress of renewed war Herries was pleased to note a more accommodating spirit on the part of even Russia and Austria toward the Rothschild plan of handling the remittances. It was the last but probably the greatest in the long series of services which Napoleon unconsciously rendered to the five brothers.

Indeed, the problem for Herries and the Rothschilds was now, not to persuade the Continental governments so much as to find the wherewithal in cash and credits on the spot to satisfy their needs. Once again the British Treasury was obliged to coin French louis-d'or in its own mints

and otherwise to resort to extra-legal means. The Prussian command in Belgium was during the Hundred Days as before in the gravest straits, so that at one time Bluecher was driven to the expedient long ago adopted by Wellington of issuing his own drafts on London, while von Buelow, the Prussian finance minister, urged and implored to have at least a hundred thousand pounds advanced without delay.

moreover, that both Herries and Salomon were fittingly rewarded, the British official with a porcelain service from the royal manufactory, the banker with the title of a Prussian Trade Councilor. Best of all, he retained a lasting impression of the evident influence of the firm and never after lost contact with it.

IV

the firms with sufficient resources and the right connections. He and his brothers were amply provided with the first item. They must make haste to secure the second as well. That was why the news from Berlin was so heartening.

But Prussia, though splendid for a beginning, was, when all was said, but a rather small patch on the map of Europe. The great prize on the Continent was imperial Austria. Austria was not only the leading state in the German Bund; she was a great power with immense subject lands, and she stood only second to Britain in the councils of the Coalition. The banking house which secured a firm foothold in Vienna would gain something more than prestige and a leverage for future conquests. It would become the first financial institution on the European mainland.

Unfortunately Austria was not to be captured so easily. Her own favored bankers had neither the vitality nor the necessary connections to handle the subsidies with the vigor and dispatch that the situation demanded. Yet, though the good Herries did his utmost and though her forces suffered from inefficient provisioning, it was only with the greatest difficulty that she could be persuaded to accept payment according to the new system even during hostilities. Her big men, unlike the alert Prussians, held aloof away off there in Vienna, and were inaccessible to mere business men; with the consequence that the war ended and no Rothschild had got within earshot of an Austrian minister. After Waterloo she stiffened still more. Her haughty governing clique, accustomed to servility from all who came near them, demanded preferential treatment and made endless difficulties. At the base of

their resistance was mistrust toward the still little-known Jewish concern.

All these strenuous endeavors, however, seemed to go for naught; and in the end it fell to Herries to bring Austria around. He tried persuasion through his agents on the ground; he addressed communications to the imperial authorities, dwelling upon the savings in time, in money and in the good influence upon the exchange which the improved remittance plan effected, confirming all the boasts of the Paris and Frankfort Rothschilds and adding

his own high opinion of their ability, their financial strength and their entire reliability; and when Vienna still hesitated he ended the interminable discussion by summarily taking the matter into his own hands and relieving Austria of responsibility altogether. For while the Allies doubtless had the right to employ what men and means suited their own fancy in converting the subsidies, it was, after all, the British Treasury that held the purse, and so long as the remittee got his money safely, promptly and without loss, he could not reasonably complain as to the manner or the agency. Herries, therefore, quite simply instructed his friend Nathan to pay the monthly instalments to Austria as and when she wanted them and to accept her drafts on the British Government at par. As to costs, commissions and discounts, why, England would take care of them herself! He, Herries, would show the people over him that the arrangement was the cheapest in the end.

This somewhat high-handed procedure had the desired effect. Vienna at last realized that the queer English meant business, and that this suspect Rothschild plan and Rothschild concern were evidently held in some regard by the one European nation to whom finance and business were second nature. And since the islanders were the rich uncles of the Coalition, it might be as well for proud but needy kin to keep on the sheltered side of the tradesmen they favored, even if the terror of Europe was now safely stowed on St. Helena Island. Austria, therefore, did more than submit to Herries's decision. She went a long step further and arranged with the House of Rothschild to handle her share of the French indemnity. Presently, finding that these payments were coming in too slowly to

mend her disheveled finances, she approached the concern with the idea of liquidating the outstanding instalments in advance of their maturity. These transactions were not only enormously more profitable than the subsidy affairs, they brought the House into immediate contact with the finance administration in Vienna, and in addition served to raise its prestige in France. Nathan had sized up things correctly: the rapprochement with Austria was to make Rothschilds the first financial institution in the world. Right off it enabled James to establish himself definitely in Paris. In a very short time it was likewise to erect Salomon's house in Vienna and Karl's in Naples.

CHAPTER IX

NOBILITY

NE good turn deserves another—in the same direction. Having got what they wanted, the brothers now considered that they deserved well of their new clients. True, they reasoned, they had made a good thing of the subsidy transfers to Vienna; but then the bargain had turned out still more advantageously for the Austrians. The imperial treasury had, owing purely to the Rothschild influence in London, saved an enormous amount of money in bankers' commissions and an even larger one in interest on the advances. These sums, to be sure, had not come out of the Rothschild pocket; they had been made good to the last penny by the British Government. The fact remained nevertheless that Austria had got several millions ahead of time without paying the customary charges. Only a house having the influential friends in London that they had could have done such a thing for her, and she knew it; her own bankers had asked one per cent commission and six per cent interest. Was it not legitimate, therefore, for Austria to show some appreciation for their loyal services?

This logic of business, whereby the merchant made the profits and the client emerged as the beneficiary, was no invention of the Rothschilds. It had come to them by inheritance, from their father and from William of Hesse-Cassel. Had not old Meyer earned his Court Factor title

as a kind of bonus from the Landgrave for the privilege of letting him buy a batch of trinkets? Had not the Landgrave himself been elevated to the dignity of an Elector in recognition of a loan he had made to the same Emperor of Austria at a good rate of interest? And had not Prussia, upon a gentle hint, recently honored Salomon with a Trade Councilorship in circumstances similar but much less favorable to that state than the present ones were to Austria? How else were men of business to become gentlemen of rank?

from exacting respect, only heightened the contrast between their present magnificence and their lowly beginnings, threw into the more striking relief their cultural rawnesses and provided wags and Jew-baiters with handy gibes. While their Gentile competitors, like Bethmann, mingled on easy terms with statesmen and field marshals, they neither received invitations nor could get their own accepted. It hurt, that; also, it made the ladies unhappy; not least, since finance was so much a matter of teacups and small talk behind potted palms, those bolted doors were not good for business.

So it was urgent that something be done. Those minor dignities were not any good. They must get no mere Kommerzienraths and that sort of thing any more, but a spangle so gigantic and lambent as to cast their entire previous history into the shadow. Now the country where the name Rothschild stood in highest repute was England. If Nathan cared, he might possibly obtain a knighthood by way of reward for his aid to the Duke of Wellington and subsequent usefulness. But Nathan was the one brother who did not care, and even if he did, it was hardly likely that the honor would be of any use to his foreign relatives who needed it most. Prussia was very friendly, but the shining things in her gift were not big enough. There remained only Austria. That conservative state, for all its unenlightened treatment of the Jews in general, was not ill-disposed toward deserving individuals of the faith. The present emperor had conferred nothing less than a barony upon one Jewish financier. What he had done once he might be induced to do again. In any event Salomon thought the attempt worth making.

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This verbal feeler was in due course transmitted to the minister of finance in Vienna, Count Stadion, who in his turn handed it on to the emperor. Stadion, though he had never laid eyes on any Rothschild, recommended favorable action. The man was nearly frantic with the effort to save the country from bankruptcy, and the opportunity to gain the adherence of this energetic young house with its powerful connections in London looked to him like a god-send. Negotiations for the liquidation of the French indemnity were still in progress with James in Paris. They had come to nothing so far because the brothers, for all their unselfish devotion to His Majesty, were obliged to offer the somewhat low figure of sixty kreutzers to the gulden. Were the emperor to confer upon them some fitting honor, they might perhaps reconsider the question and be content with a twenty-per cent profit on an advance repayable over five years.

The monarch, however, was not to be rushed. Stadion's troubles did not disturb bis sleep. Besides, a Christian emperor could not just like that hand out distinctions to people who not only were theologically unacceptable, but were tradesmen of doubtful origin and foreigners to boot. So Francis took his time to reflect. Also he consulted his chancellor and one or more of his courtiers. The chief minister, Prince Metternich, was on general principles disposed to cultivate good relations with moneyed people, regardless of race, creed or antecedents. One never knew when they might be needed. Leader and fountain-head of the reaction though he was, he had a singular tenderness for the Jewish people, individually and collectively, and was doing everything in his power to secure the rights of citizenship for them in Frankfort, if not in Austria. So Metternich seconded his colleague's motion.

But in other, no less influential, quarters, the Rothschild proposal encountered severe and ironic opposition. A gentleman about the court, Lederer by name, subjected the petitioners' claims to such close scrutiny that the project seemed in peril of falling to pieces. What, he asked in effect, had they done to merit consideration? As far as

those subsidy remittances were concerned, now, it was quite true they had not required Austria to pay any commissions on the matured instalments nor any interest on the advances. Well, they were not entitled to any. England had squared the account with them in full. They had not sacrificed a penny in the whole operation. Did they expect to be paid twice? Similarly, their great to-do about having carried through a complex financial enterprise without disturbing the exchange. So they had. But their cleverness had nothing to do with it. Events over which they had no more control than over the weather, had been favorable; that was all. As for their punctuality and efficient management—good heavens, what were the men thinking of? They were bankers, weren't they? Was it not their simple duty to be punctual and efficient?

Then Lederer gave some attention to Stadion's doctrine of putting the firm under obligation for the sake of future needs. To him the whole notion seemed the veriest innocence. Did the minister of finance suppose that business men governed their conduct by sentiment? It was one thing or the other: either Austria was a client worth having or she was not. If her affairs were profitable they would go to all lengths to get them; if they were not profitable they would not lift a finger, no matter what favors were shown them. The only criterion was profit and loss. This was the first time he had ever heard of the idea of men of the trading class being expected to operate on any other basis.

Lastly, they were Jews. Not that he entertained any prejudice against any people or faith. Still, facts were facts. In Frankfort where the men in question had their home, the Jewish question was just now particularly acute.

A proposal to grant the Jews equal rights with Germans was under discussion before the council of the states sitting in that city, and feeling on both sides was running high. Were His Imperial Majesty to single out a Jewish family of Frankfort for distinction at this time, the impression was certain to go abroad that Austria was taking sides with the Jews and trying to force the issue; which surely was not what All-Highest intended.

However, when all was said, the brothers, or one or two of them anyhow, had certainly given valuable service to the empire. He was not in the slightest degree disposed to minimize that, however much they might have to thank England and the course of events for the result. Nor did he mean to suggest that they were entitled to no consideration at all. Just what form the reward should take, it was not his place to decide. But if his opinion were required, he would suggest that they be given each a gold case with His Majesty's monogram outlined in diamonds!

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This devastating analysis came very near dashing the brothers' hopes. The emperor hesitated and weighed the pros and contras as if it were a question of war and peace. But Stadion, backed by Metternich, pressed on. No doubt, there was much to be said for Lederer's objections. Still, Austria was in no position to repulse friends with money and influence. Inspired reports from the legation in Frankfort dwelt on the power and the wealth of the House of Rothschild, on its eagerness for social recognition and on its goodwill toward Austria. There would probably never be another opportunity like the present for winning its

Meantime, before the grave discussion had come to an end, the Rothschilds had made bold to supplement their petition. Originally the plan had contemplated honoring only the two eldest members of the family, Amschel and Salomon. On second thought, it was pointed out that, while they had been particularly active in the subsidy operations, the firm was a solid unit and worked together on each and every undertaking. Consequently it might be both invidious and prejudicial to the solidarity of the family were some of the brothers to be raised above the

rest. The logic was clearly sound and incontrovertible, and that point, too, was granted.

Salomon was now asked to convey to the imperial heraldry office his ideas of a coat of arms for his House, and Salomon complied to the best of his ability. Left to himself, he would have taken the opportunity to paint a symbolic history of the family, or at least of those aspects of it which lent themselves to public admiration. Wasn't that what armorial emblems were for? Besides, one was not asked to become a nobleman every day in the year. A natural reserve, however, bade him be moderate. The quartered field, therefore, showed but three colors, red, yellow and blue; figures, all told, a meager seven—two lions, a leopard, a stork, a hound, half an eagle and an arm holding five arrows, the whole surmounted by a crown. Even this was largely in grateful allusion to the honored patrons of the family rather than to its own magnificence. Thus the leopard symbolized England, the eagle Austria, and the lions the Elector of Hesse-Cassel. In the field itself only the arm with the arrows spoke of the unity of the five brothers, while the hound and the stork, which held up the shield, stood for loyalty and piety.

The martinets in the heraldry office, however, were not in the habit of letting things go through just like that, and they blue-penciled Salomon's draft unmercifully. The animal collection was wiped out almost entirely. Why? Tradition! The rules of heraldry forbade the arms of a foreign country, or any reference thereto, to appear on a device granted by Austria. The crown, too, must go; it belonged to a loftier style than was being contemplated for the moment. Even the hound and the stork, those gentle creatures representing the virtues that had made the

House of Rothschild great, were not allowed to remain. The ridiculous slashing went to the length of reducing the number of arrows in the arm from five to four. Sheer stickling! By the time the experts were done there was so little left of the original design that Salomon hardly knew it. Nevertheless the 25th of March, 1817, was a red letter day in the history of the family. For on that day the final document went forth from the imperial palace in Schoenbrunn declaring that henceforth the four continental Rothschilds were members of the Austrian aristocracy. The snobs of Frankfort might now give themselves what airs they liked; the sons of Meyer, the Jewish curio dealer, were by imperial decree as good as any of them. And James in Paris could prefix a significant "de" to the Rothschild Frères on his office sign, and look the proudest courtier of Louis XVIII straight in the face. Only Nathan remained a humble plebeian. But he did not mind.

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But though Nathan was inclined to smile at armorial bearings, there was one species of official dignity to which he was not indifferent. Cordial relations with Herries had shown him the value of being on the inside of government. There was more worth-while information to be picked up around the ministries in a day than in all the London drawing rooms in a year. Now that the war was definitely over and subsidies a thing of the past and the British connection safely clinched, it behooved him to spread his nets into new waters. For any number of reasons, but chiefly because of the geographical distribution of his brothers, France and Austria were the most desirable waters in sight.

Paris would take considerable wooing. Vienna, on the other hand, was coming along very nicely. The past performances on behalf of Austria were, however, no more than a good beginning. If the same rate of progress were to be maintained, it was essential to keep the closest kind of watch on developments in her fiscal policies. Her old bankers at home were surely making the most of their proximity to the court; and although Salomon and the others were nobles now, they had no firm footing on the ground. There was no Rothschild office in Vienna,—not yet. By the time news reached Frankfort it was apt to be of little use. Therefore some channel of a more direct kind must be cut to the great capital on the Danube.

It so happened that the Austrian consulate general in London was vacant at the time. It seemed to Nathan that that was the very thing for him. Were he to fill that place he would be in effect the financial attaché of the embassy. Considering that London was the world's money capital and that Austria was bound for a good while to come to borrow, this would mean that the ministry of finance in Vienna would guide its fiscal policy by his, Nathan's, reports and opinions. That is to say, he would not only know far ahead of the court bankers when a loan was being contemplated, he would have a hand in determining when and whether such operations should be undertaken. Incidentally he would, as the accredited representative of a great power, be brought into intimate contact with the official folk of other countries as well, not by way of fox hunting and tea parties, but in their business capacities—the only aspect of fashionable society that mattered to him.

He conveyed his thoughts to his brothers, and Amschel went to work at once. While he was about it, indeed, Am-

schel discovered that the Austrian consulate general in Paris was likewise in need of a good man, and it occurred to him that he might as well give his little brother James a boost at the same time. So he wrote to Vienna that should the chancellor contemplate filling those two vacancies he knew the very men for him. He was not, he explained, seeking any new honors for members of his family; his brothers and he were much too grateful for the splendid surprise His Majesty had lately seen fit to give them. It was precisely for that reason that he was anxious to make some small return. The members of his House in London and Paris, owing to their prominence in the business and banking of those capitals, were in an excellent position to further the commercial interests of the Empire abroad. They had, moreover, no thought of asking any kind of pay for their services. They merely wished to demonstrate their gratitude and loyalty.

Meantime Nathan himself let no grass grow under his feet, but plied the Austrian ambassador in London to the same effect. Vienna, however, was in no haste this time. It looked to the authorities there as if the Rothschild people had an unhealthy appetite for distinctions which grew by what it fed on. Without exactly refusing their request, the Austrians decided that a little check would be good for them just now. It might spur them on to show their devotion in some more tangible form, such, for instance, as an offer of better terms in the French indemnity matter. For the time being, therefore, nothing much happened. The Rothschilds, however, were not discouraged. They kept on begging and pulling wires. But it took three years before Vienna got around to the appointments.

That was a long time to wait. Fortunately there were

other things to keep Nathan and James occupied in the interval. Early in that eventful year 1817 the royal government of France, upon balancing its books, discovered a rather staggering deficit. Prospective revenues would not only leave nothing over for indemnity payments, they would not even meet current expenses. A loan of some three hundred and fifty million francs was imperative. Such a sum could not at this time be raised within the kingdom, to be sure; but the credit of France, despite the instability of the last quarter of a century, was still good abroad. The ministry therefore set the machinery in motion by calling in, not James Rothschild, but that financial wizard, Napoleon's old banker, J.-G. Ouvrard. Ouvrard, however, though he had made several fortunes in his time, was richer in ideas than in money just now; so that he in turn sought the help (again, not of de Rothschild Frères) but of the great British financiers Baring Brothers and their associated firm of Hope & Company.

James was frantic to take a hand in this first great operation since the war. It was not so much the profits—he was not doing so badly in his other affairs—but if he could at least participate in the syndicate, his standing in France would be assured. But neither the Englishmen nor the Frenchmen would have anything to do with him. The Rothschilds' exploits in the Peninsular campaign were no secret any longer; but far from being admired for them, they were looked upon as unscrupulous tricksters who had abused the confidence of French bankers, had helped the enemies of France and would very likely do so again if they had the chance. Labouchère, the brother-in-law of Alexander Baring and the head of Hope & Company, conceived an unconquerable aversion, moreover, for young

James personally. He despised the insignificant little man with the marked Semitic features, the deep restless eyes and the curly red hair, who could cringe when he wanted something, became arrogant when he had got it, and was insufferable at all times. Ouvrard more than concurred in this estimate. To him the Rothschilds were "simple money changers, who owed their fortunes more to accident than their own ability."

the Rothschilds. In years to come Parish wished he had taken his friends' warning.

As it happened, the French loan was a brilliant success. Baring and Hope—though not Ouvrard—cleared enormous gains. But the Rothschilds were not impoverished by

it either. They bought on margin and largely with the untransferred indemnity funds, such great blocks of the securities that they presently controlled the price of them. Ouvrard later calculated that they made a good fifty per cent with the self-loaned Allied moneys in this affair. Ouvrard, however, did not know the half of it. In his bitter hatred and contempt of the Rothschilds he could not believe that they ever thought of anything but gain. As a matter of fact, their interest in mere profits was only a passing phase this time. For a while, indeed, they bulled the market with great energy, much to the joy of Baring and Hope. But the sequel was much more interesting and rather less agreeable to these gentlemen. Of this, in a later chapter.

CHAPTER X

THE FIRST LOANS

rately than he knew. Of course, there would be other loans. His brother James was still lamenting his rebuff in Paris, when along came Berlin to cheer him up. True to her promise, Prussia had never forgot the help she had got from the Rothschilds during the critical Hundred Days. What was perhaps even more to the point, her finances were in a desperate state. The British subsidies and the French indemnity, mere stop-gaps at best, were about drying up; a few millions which, thanks to Salomon and Karl's good offices, she had lately borrowed from the Elector of Hesse-Cassel, were gone almost before they had reached her; her own people, burdened with taxes and economically exhausted by the long war, were as poor as their government; and the state treasury was barely able to pay the military and the civil servants their salaries. A foreign loan was the last and only hope.

With Karl virtually residing in Berlin, this state of affairs was no secret to Nathan. Therefore, along about November 1817, he sought out the Prussian consul in London, and after several conversations reached an understanding with him. This gentleman—Barandon was his name—without taking the time to consult his country's ambassador on the spot, communicated what he had learned (or such part of it as seemed to him relevant)

This highly inspired communication no sooner reached the Prussian chancellor than he authorized Barandon to proceed, and negotiations were opened forthwith. It soon transpired, however, that Barandon had misunderstood something. The House of Rothschild was indeed prepared to float twice as big a loan as the royal government desired, only the rebate would have to be not ten but thirty per cent. Why should anyone want to invest in Prussian bonds at ninety when French ones could be had for seventy? This seemed reasonable, and a provisional agreement was drawn up on these terms. But before the final contract could be signed, news reached London of projected flotations by several other countries, with the consequence that money became tight. Thereupon a very curious thing happened. Barandon, namely, made public Nathan's printed plan for the Prussian loan. In that document the amount of the issue was stated at twelve millions, instead of the twenty provisionally agreed upon, and the emission price not seventy but sixty. The purpose of this interesting procedure, as Barandon apparently understood it, was to discourage other prospective borrowers away from the London market. However that might be, it was received in Berlin with raised eyebrows, and Barandon was asked to explain just what the changed figures signified.

Barandon's explanation was so clumsy and tactless that Nathan saw with dismay that the man he had picked was not exactly a Buderus either for financial astuteness or for keeping those over him in the right mood. He blurted out things as they were told him, without stopping to think of their possible effect. Thus he told Berlin straight out that the reduced price had been dictated by the fall of the French rente to sixty-five. Sixty was, of course, less than that; but then the British investor preferred the French paper because it represented the recognized national debt of a first-class power whose credit had safely weathered three successive revolutions. As a matter of fact, he added, Austria was offering her five-per cents as low as fifty-two, and Russia was vainly trying to float a loan at seven and one-fifth per cent. So what could Prussia, whose securities were quite unknown to this foreign market, ex-

pect! How all this sounded to Chancellor Hardenberg can only be imagined. But Nathan was sufficiently discouraged to drop the rough-and-ready diplomat, and henceforth transferred the negotiations to the embassy. For a space it seemed as if the entire project would go aground. The Berlin authorities were extremely put out with what seemed to them a highly suspicious way of doing business, and efforts were made to secure a loan elsewhere or to manage without one. Ambassador von Humboldt (a brother of the famous scientist) succeeded, however, in calming the air.

Humboldt put the whole blame on the unfortunate consul, and recommended sending over a well-trained man specially for the purpose. As for Rothschild he was not only "easily the most enterprising merchant here now" but an entirely trustworthy man, honest, fair and intelligent. He transacts much business with the British government, and is through his brothers thoroughly familiar with the Prussian situation. To advance his brothers' interests he is disposed to make himself agreeable to "our Court" and it will not be easy to find another house as friendly. What Barandon had said about the difficulty of placing foreign loans over here is quite true, and the success of the French issue must be regarded as a special case; so that it were best to think twice before trying someone else. Rothschild, on the other hand, is not going to be very manageable. He has the independence which comes with wealth and prolonged residence in England, and the ministry of finance must be prepared once the conditions were agreed on, to let him handle the whole thing without interference. His affairs and speculations are so compre-

hensive and varied that it means very little to him whether he secures this particular enterprise or not.

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Prussia then sent over her keenest financial intellect, a man named Rother, who having started as a regimental clerk had risen by sheer force of character and ability to the directorship of the treasury. The negotiations now began in earnest. Nathan at once perceived that in Rother he had met his match. Here was another Buderus indeed, but a Buderus who took his responsibility with the utmost seriousness and would represent his royal master's interests as loyally as if they were his own. Nathan not only respected what was to him a quite novel type of official mentality; he found delight in pitting his wits against those of an equal. This was going to be a chess game after his own heart, with no victory assured in advance. Well, he would rather lose against an opponent like Rother, than win with Barandon.

Rother shared this feeling; only he had the advantage of having something like his opponent's measure in advance, whereas he was an unknown quantity to Nathan. Before proceeding to England he had painstakingly prepared his retreat. All in all, he preferred to have the loan launched in England, but only provided the amount and the conditions were at least equal to those that could be obtained elsewhere. To make sure of this he had entered into negotiations with bankers both in Berlin and in Amsterdam. Moreover, he had outlined a plan for a direct government flotation without the aid of bankers. As it

happened the Netherland authorities were contemplating a loan themselves and could not permit a foreign one to be offered on their exchanges at this time, but privately a number of capitalists assured Rother that they would be glad to invest in the Prussian securities if they were issued abroad. In Berlin, despite the general depression, a consortium was improvised which was willing to take up fifteen million, possibly twenty, on acceptable terms. Prussia was thus well armed for the fray. The Rothschilds by no means had the field to themselves. They must reckon with strong competition.

Realizing all these initial disadvantages, Nathan called his brother Salomon to his support. This was the first government loan the family had ever been called upon to float, and it must go warily. Salomon had had dealings with Rother before, was closely in touch with developments in Berlin, and might well know something about the rival terms. Nathan, moreover, though he was confident of his own business skill, did not trust himself in delicate manœuvres with diplomats, especially Continental ones. That was Salomon's forte.

The conversations began at noon on the 25th of March and continued for an entire week, sixteen hours a day, frequently till the small hours of the morning. Rother opened by declaring the conditions named in the printed plan unacceptable. To this Nathan replied that he was prepared to listen to any reasonable proposal. However, that plan had been made public, and it would be a breach of faith with prospective investors, as well as compromising to both Prussia and his House, to dishonor it entirely. Prussia was about to make her initial appearance in the London financial market, and such a beginning would injure her

SALOMON VON ROTHSCHILD prestige. While, therefore, he would be glad to consider raising the price somewhat, he would suggest that at least a portion of the loan be offered at the figure originally named. But in any case, he wished to say at once, it would be useless to try to float the issue at over sixty-five on the average. As Herr Rother was aware, even the French bonds were unable to lift themselves above that level, and the Prussian Funds were a new and untried investment over here. Yes, Herr Rother had heard this reasoning before from Consul Barandon. Also, he knew that he could do better than match these conditions much nearer home, and that in all probability Mr. Rothschild would not let it come to that.

Aloud Rother observed that without wishing to make odious comparisons, he regarded his own country's credit as an infinitely sounder risk than that of France, and that this he had reason to believe was also the general view. If the public had any real confidence in the newly restored French monarchy, its securities would command a much higher price. But France, as the last quarter century had amply shown, was a turbulent country. Besides, her national debt was tremendous, and she was at present groaning under the burden of a still unpaid indemnity. Prussia, on the other hand, was a young and vigorous state, with an orderly population devoted to its reigning House and quite proof against revolutionary infection. Her internal debt was trifling, her foreign one almost non-existent. The entire world admired and trusted her honest and efficient government, and her hard-working, pious, intelligent inhabitants. In sum, the low state of the French rente had nothing whatever to do with Prussia.

The Rothschilds conceded that there was much to be

The next day a succession of compromises was proposed and discussed. Finally Nathan declared himself willing to float the bonds at seventy straight. In view, however, of the condition of the market and the consequent risks involved, he must ask for no less than four per cent commission. Again, the negotiations were in peril of an

abrupt termination. Rother was still soaring in the region of eighty, and commissions of four per cent he declared to be unheard of. The discussions continued until long past midnight. Not only the price but the amount of the loan were still in dispute. The Rothschilds argued that to launch five million pounds' worth of an unknown security was to risk both their own fortune and the credit of Prussia unnecessarily. It were far more prudent to start modestly with three millions, and in the event of success to follow it up with a further two, which would then doubtless command a better price. As the hours dragged on with no solution in sight, a spirit of accommodation possessed both sides. Rother agreed to the four per cent commission, Nathan gave in on the five millions. On the price, too, a compromise was reached. The first half was to be issued at seventy, one half the remainder at seventy-two and a half, and the last quarter at seventy-five. The understanding was verbal; papers were to be signed on the morrow.

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Between supper and breakfast, however, Rother did some sums and observed that at this rate the treasury would realize on the average somewhat less than seventy per cent of the face value of its script. This was no better than the German bankers were prepared to do, and he would have a difficult time explaining his reasons for placing the profitable business with foreigners, in particular as public opinion was strongly opposed already to having the bonds go out of the country. Besides, were he to sign up on these terms he would be exceeding his authority. He disliked very much reopening the discussion—it meant

a deadlock now, he feared—and seeming to be going back on his word; but there was nothing else he could do. In the morning he therefore dispatched a letter to Salomon explaining his position.

Salomon was not to be outdone in courtesy; for his gifts as a diplomat were superior to his grammar. If he was put out he did not show it. Writing back promptly, in language which even old Meyer would have been ashamed of, he assured Rother that they wished nothing to be done in haste, that good-fellowship and sincerity were more to

them than business, and that they were his cordial and devoted friends.

There followed four more days of fencing and bargaining and threats of rupture. Finally at three o'clock in the morning of March 31 an agreement was secured. It was not this time a compromise; all the concessions came from the bankers, and Rother emerged with flying colors. The flotation figures were unchanged—seventy, seventy-two and a half, and seventy-five—but the commission of four per cent had been eliminated entirely. Immediately upon the signing of the contracts Nathan dispatched a boat to Hamburg with a million thalers in silver, to await Rother's arrival there, and a second million in commercial paper on the same city was handed him on his departure. Humboldt was delighted; Rother's skill had achieved a triumph beyond all expectations. The felicitations, however, were premature; Rother still had a card in his sleeve. He had held it for a climax all along.

When, early in the negotiations, Rother had painted the economic outlook of his country in bright colors, the picture represented his genuine convictions. All that Prussia lacked was a world market for her credit. This loan, now happily arranged, would give her that. He trusted the Rothschilds to handle the exchanges with skill. In these circumstances it would not be long before the bonds would rise in value. Why, then, should not the royal treasury share in the profits? The country did not need the entire five million pounds at once. She could afford to invest a bit in her own securities, now that the pressure was relieved. In a final conversation with Salomon he, therefore, suggested that Prussia would cheerfully take over one million pounds from the loan herself. Considering that the

bankers had throughout fought for keeping the total down to a lower figure, they could hardly object now that Rother so obligingly lightened their burden. The brothers graciously consented, and the parting letters exchanged between the negotiators were almost tender. Rother wrote to "my dear Salomon" that he was leaving London happy, and Salomon replied by assuring him that he had done "a divine piece of business. God knows," he added, "that our hearts are with you and that we are moved by no desire for profit. . . . We are heartily, eternally and loyally your friends."

Why should they not be? The new loan was taken energetically in hand by all the five brothers and pushed simultaneously in all the more important exchanges of the Continent as well as in London. Trading in it was so brisk from the start that within six months the price rose to eighty-three. It went back for a little time, without however falling below the level at which it was issued, and then recovering it went on upward till at the end of six years it mounted to par. The Rothschilds thus had reason to be content with their first venture into state financing. They had been generous without exactly sacrificing themselves. Doubtless they could have wrung more favorable terms out of Barandon. But where would have been the glory? They had learned something from the contact with Rother, had triumphed over competitors, and had recaptured the confidence of the Prussian court, which in the first stages of the negotiations they had almost forfeited.

As for Rother he had during a time of depression succeeded in obtaining terms which were the admiration of the experts. His last-minute move had been a stroke of genius. The bonds had scarcely been put on the market

when a Paris banking-house offered to take over the million pounds he had reserved, at five per cent above the flotation price. Many people in the government were in favor of accepting, but he held on till the height of the boom, and the state realized a round hundred and fifty thousand pounds on the incidental operation. Moreover he had avoided the risk of a direct loan and had put Prussia definitely on the European financial map.

CHAPTER XI

HONEYMOON

O return to France and the sequel to James's rebuff.

Why the Rothschilds should take the lead in bulling the loan of 1817 puzzled Labouchère and Alexander Baring not a little. It looked to them like the purest benevolence. The brothers, after being not only beaten but snubbed into the bargain, were returning good for evil, like apostolic Christians. It did not sound like them, or even like rational business. What might they be up to? Make a killing? Naturally. But that was too obvious. They could as easily profit by bearing the market. The only plausible explanation seemed to be this: they were currying favor with their rivals by a demonstration of their power on the exchanges. It was a peace offering. Ouvrard and Labouchère lost what little respect they had for men who could resort to such groveling tactics.

The gentlemen were in error, however, and unjust to Nathan's resourcefulness. Not that he was not capable of precisely those tactics; only in this instance he had other objectives in his eye. A corner in the new French rentes was desirable on general principles, as well as for two or three specific ones. In view of the firm's manifest destiny, the public ought to have its confidence educated in state securities. A weak response to this initial venture would be a setback for all loans and hurt more people than Baring and Hope. Contrariwise, a brisk absorption of the

What followed came close to bearing out Nathan's calculations. Within less than a year the French bond issue of 1817 soared twenty per cent—from fifty-five to sixtysix. The British firms came off so well that the Paris investors and even more the French taxpayers complained loudly at the tribute they were forced to pay the foreign bankers. Even the government was stirred, and brought suit against Ouvrard for profiteering. Nevertheless, when early in 1818 the budget again failed to balance, the ministry of finance turned for help once more to Baring and Hope, and the Rothschilds found themselves as much on the outside as the year before. Neither gratitude for past aid nor veiled threats of future obstruction would make Labouchère overcome his aversion for the brothers. This time, however, Nathan as well as James must be reckoned with. The London Rothschild, fresh from his triumph with Prussia and his victories on both royal exchanges, was determined that no new French loan should be launched without at the very least his participation in the syndicate. If Baring and his friends refused to take warning, then he, Nathan, would have no choice but to use his veto power.

П

Negotiations in Paris began early in the year. By summer a tentative agreement had been concluded with Baring and Hope, whereby the two associated British firms were to raise two hundred and seventy million francs for the final liquidation of the indemnity. By way of a sop to public opinion, the government did for a while give some perfunctory attention to schemes of a direct treasury loan, and listened with one ear to proposals of the native bankers; but nothing came of either alternative. In one respect at least Nathan's fears were thus justified. For the government took the position that it could not risk untried men and methods at a critical time, and that the British houses had more than earned their profits by the great lift they

had given French credit at home and abroad through their successful handling of the last loan. Indeed, it was owing to their efforts that the nation was now able to command a much improved figure for its bonds.

For the time being, however, the agreement was provisional. France must first secure the assent of the Allied governments, and that meant a wait of several months. In the autumn a conference of the Powers would meet at Aix-la-Chapelle to consider the evacuation of the French provinces, the payment of the balance of the indemnity and some related matters. Till then, therefore, the precise terms of the loan contract must remain in abeyance. The Rothschilds were going to have their delegate at Aix, and Nathan was still hopeful that Baring would be realist enough to come to terms. The last word at the conference would rest not with France but with the statesmen of England, Russia, Austria and Prussia. With all these countries the Rothschilds were in good standing. At any rate, James and his brother in London went on trading in the French bonds of the previous loan and pushing them up.

Meantime Karl, the fourth son of Meyer, had reached his thirtieth year and felt it was time for him to marry. Choosing a mate for a Rothschild had, by the year 1818, become a serious matter. Amschel and Salomon had taken wives in the dim days when the family were Judengasse shopkeepers; Nathan had wedded Hanna Cohen during the smuggling interlude. But Karl was fifteen years younger than Amschel, and thus the first to attain marriageable age since the House of Rothschild had become a dynasty. They were not only the richest Jews in the world, but nobles to boot. Their former neighbors and business associates were away beneath them; families on

their own economic level still hesitated to accept them as equals. Moreover, Karl was the least clever of the brothers. It was therefore a brilliant achievement and another step in the rise of the House when the erstwhile Kalmann won the hand of Adelaide Herz. The young lady was not only beautiful; her family belonged to the small and exclusive circle of cultivated German Jews who had had their money long enough to attain enlightenment and social graces.

The wedding took place on the 16th of September, at the very time when Frankfort was filling up with notables on their way to the Congress at Aix. It was a gorgeous throng. From the four corners of Europe Emperors and kings, statesmen and generals and great ladies were converging upon the ancient capital of Charlemagne. Originally it had been planned that Salomon should be the sole plenipotentiary of the Rothschilds at the big show; diplomacy was his bailiwick. But Adelaide was tempted; and since the young pair must go on a wedding journey somewhere, why not combine pleasure with business and take their honeymoon at Aix amid the gilded pageantry? The notion caught Salomon's fancy. Finance being so largely an affair of the right social contacts, the presence in the delegation of a lady with Adelaide's accomplishments would be a distinct asset. Her beauty, her poise and her family connections might easily turn the scales in the delicate mission ahead of him. By all means let the couple come along.

m

In truth, Adelaide and her people had begun helping out even before the wedding. No one surely who had thus

The facts in the case were a great deal more interesting than that. In his youth Gentz had shown decided leanings toward the radical ideas of the Revolution. Later, the excesses of the Jacobins and an offer of employment at the court of Prussia had made a wiser and a disillusioned man of him. He read Burke's "Reflections" and swung completely around. A man of rare political insight and literary gifts, he soon attracted notice in influential quarters by his eloquent defense of the old order. Foreign diplomats in Berlin approached him with assignments in behalf of their governments. He sold his pen and his editorial connections

to England, to Russia, to whoever was willing to pay for them. At a time when courtiers and even ministers balanced their private budgets with gifts and loans from court merchants, when reigning princes themselves bartered their subjects for money, it was too much to ask of an impecunious young writer to be swayed by ethical scruples. Gentz was anything but ashamed of the "subsidies" he got; he noted each item gleefully in the Journal he kept as "an agreeable transaction" or as "good news." Subsequently, after entering the service of Austria, he discovered that bankers were prepared to make safe investments for him with their own capital in exchange for advance notice of his master's intentions, and he delivered this intelligence as freely and with no more thought of wrong-doing than he had previously shown in merchandising his literary wares.

Gentz preceded Metternich to the congress, and arrived in Frankfort on the 3rd of September. The same evening, his journal records, he saw Moritz Bethmann the banker, by whom he was "very cordially received." (Bethmann's firm, like most financial houses, had irons in the fire at Aix.) On Sunday he lunched at Bethmann's home. But the man with whom he spent most of his time was David Parish, the young Vienna banker who was again operating on the sidelines for Baring and Hope. Parish, however, was no mere check-book to Gentz. "David Parish," he wrote to another friend, "is the matador, the pearl of the business world in all Christendom on both sides of the Atlantic Ocean, one of the most complete men that I have ever seen." They too met and talked every day for as long as Parish remained in Frankfort, which was till the eighth,

when he left for Aix, after "important arrangements" with his friend.

Salomon, accompanied by the honeymooners, followed him the same afternoon with a light heart.

IV

At Aix the proceedings got slowly under way. At least the official ones did. How much was being accomplished at the ceaseless round of luncheons, dinners, soirées, balls, the Rothschilds had no way of knowing for certain, but what they surmised made them uneasy. A score of bankers—Alexander Baring and Labouchère among others—had arrived on the ground before them, with their suites of well-groomed, genteel-mannered lieutenants. They were seen everywhere, riding about in their proud equipages, halting at one palace after another, gold-laced magnificoes and splendid ladies at their side. Parish and Gentz apart, Saloman saw scarcely anyone in that whole brilliant assemblage with whom he was on speaking terms. Hardenberg was there for Prussia, but Rothers was not in the delegation. England had sent Castlereagh but not Herries. Even Barbier was absent. Neither Adelaide's beauty nor Gentz's friendly offices seemed to be of much use. The shimmering pageant rolled past, but the Rothschilds looked on at the windows, wistful spectators.

Gentz was touchingly attentive. The busiest man at the congress, he would tear himself away from a reception at the Nesselrodes', a tête-à-tête with Lady Castlereagh, even Metternich's dinner table, to spend a couple of hours with Adelaide and her husband and brother-in-law. Almost every day he found time to receive Salomon and Karl at his own rooms. And he did his utmost to convince his Prince that the Rothschilds were too rich and powerful to be overlooked, while Parish on his side urged the same logic upon Baring and Hope. But it was all to no purpose. Metternich and the bankers were committed. In those two or three days before Salomon's arrival an understanding had been reached between them, and there was no going back. It was too late for a peaceful solution of the Baring-Rothschild rivalry.

Already in September, while the forehanded guests were

Nevertheless the two brothers remained serene and devoted. On the twenty-seventh, after Gentz had about made up his mind that they had at last given up,—they had come only twice since the ninth—Salomon appeared and handed him eight hundred ducats, winnings from a little investment in the English Funds. The busy secretary pock-

eted the windfall gratefully enough, though he was a little puzzled. The persistence of those people was astounding. What could be their game now? The mystery was to be resolved a week later.

On the fifth of November the thunderbolt fell. While Aix had been enjoying itself, some terrifying things had been happening in Paris. About eight days ago—on October twenty-seventh, to be exact—a mass of 1817 government bonds had suddenly been unloaded on the bourse. The result had been pandemonium. Within five days the state securities had dropped from 74 to 68. Every other paper had followed suit. There was no let-up in sight. It was a panic. From the French capital the movement was spreading to the other Continental markets. Even London was showing the strain.

V

The bad news threw the Congress into confusion. "They all pretty much lost their heads," says an eyewitness; "only Baring kept his." Lucky for him that he did. He had something more tangible to save than his self-control. By the contract which he had signed here at Aix less than a month ago, he had on his hands a trifle over a quarter of a billion new French obligations, which he had bought at an average of seventy, and which therefore meant not only an immediate loss but that they could hardly be offered on the market at all. Unless he held his wits together and found a way out, he was a ruined man. The situation was as desperate as could be imagined; there was no mistake about that; all the greater the need for straight thinking.

"An Englishman the like of whom there are not many," was Gentz's characterization of Baring. He proved himself worthy of the compliment now. No muddling through for him. A glance showed him pretty clearly what had happened, who had made it happen, and why. Patently a couple of gentlemen in London and Paris had decided to show him who was master. Well, they had succeeded. It was useless to deny that. But they were mistaken if they thought they had got his scalp. One way or another he was going to squeeze out of that contract. That was all, and that was enough satisfaction for any rival surely. There would be no new French loan just now; but the House of Baring Brothers would go on standing for yet awhile.

The proposal, however, to break the engagement could hardly come from the banker. It would be not only undignified but useless. He would be read a stern lecture about the sacredness of contracts, and be held to his pound of flesh. As it happened, a number of the leading Allied statesmen had an interest in the ill-starred loan, other than official. Hardenberg of Prussia, Nesselrode of Russia, Prince Metternich, not to mention Gentz and other smaller fry, each had signed up for a parcel of the as yet unissued bonds. They had not actually put up any money of course. If all had gone well, they would have clipped the coupons every six months or so, and eventually have collected the full value of the matured paper, without the bankers being too petty about the accounts.

But things were not going well, alas! not well at all. So Baring via Parish via Gentz begged for an audience with Prince Metternich and the other chiefs of the Congress; which was grudgingly granted. The statesmen would rather have avoided the meeting; it did not promise to be pleasant. The unlucky financier would probably whimper and crawl and appeal for mercy. But no! surprisingly. The thoroughbred was taking misfortune like a man. He did not so much as hint at release. A contract was a contract; he meant to stand by his guns, whatever the cost. What could be finer! However, there was something more—another surprise, not so agreeable. He expected the good gentlemen to honor their commitments also, and thus distribute the burden! In view of the fact that the operation was to be a loss from the outset, he must respectfully and regretfully suggest that all subscribers pay up in advance, trading on margin being feasible only on a rising market. And

This was unheard of, fantastic. Metternich was thoroughly outraged. No banker had ever made any such proposition to him before. He had no money for investments of any kind, least of all for flivvers. Rather than do what Baring wanted, he would throw the loan out altogether. And that was what happened. At the session of November 19, the chair informed the French delegation that, mindful of the deplorable news from Paris and having the credit of France at heart, the Congress was obliged to reopen the matter of indemnity payments. A canvass of the assembled powers revealed that the representatives of Russia, Austria and Prussia favored postponing the question to some future conference. The Duc de Richelieu had no choice but to agree. The houses of Baring Brothers and Hope & Company were saved, but they left Aix with their glory dimmed. Metternich never forgave them. Their primacy in world finance was gone forever.

VI

His next halt was Munich, where he was received by the Bavarian king and treated on all hands as a personage. He felt himself that he had acquitted himself more than creditably at Aix. As he added up the proceeds of those two months' work he must admit that he had not done so badly: two orders (the Red Eagle from Prussia and the Anna

Order from the Emperor of Austria) besides six thousand ducats in cash, thus: France eight hundred; ditto from Prussia and Russia; seven hundred pounds from England, and from a Herr Bentheim on behalf of "the mediatized" nobles one thousand ducats. Nothing at all, of course, from Baring, but to make up for it, another eight hundred from the Rothschilds, with much more in prospect. And his total expenses, including gifts for loved ones in Vienna, barely more than a quarter of the total.

Money, however, is not everything. Aix had been a turning point in his career. Writing to a friend from Munich, he let himself go in exultation: "Never, I can truthfully say," he declared, "have the laurels been heaped so thick on my head; every day I was flatteringly assured that without me it was no longer possible to have a congress. . . . It was proposed I regard this period as the culmination of my life . . . that I be forced to marry, so that my stock at least might not die out. . . Partly for official reasons, but also because I felt I could make no better or more interesting use of my spare time, I have had the most instructive conversations with the most powerful figures in the commercial world—Baring, Labouchère, Parish, Rothschild, etc.; and it was no small advantage to hear the innermost secrets of the greatest money affairs that have ever been carried on among men, negotiated in my little house."

Exciting and delightful as all this was, it did not prevent him from observing the financial gods with a twinkle in his eye and making thumbnail sketches of them. Parish, "the matador, the pearl," was a boon companion after his own heart. He admired the intelligence and the broad training of Baring. But the phenomena, the marvels, of the entire assemblage were the Rothschilds. As men they could not compare with the others, and he frankly despised them: "They are common, ignorant Jews, outwardly presentable, in their trade the sheerest materialists, without the remotest inkling of any higher relationship in the world." But they are "endowed with an admirable instinct which always makes them take the right course and between two right ones the best. Their enormous wealth (they are the biggest in Europe) is entirely the product of this instinct, which the vulgar call luck." It must not be imagined, however, that all the Rothschilds are equally gifted. Of the five one is only so-so, (Amschel) and another (Karl) is wholly negligible. Finally, the moral of the financial drama he had witnessed:

"The profoundest reasonings of Baring, now that I have seen everything at close range, inspire me with less confidence than a single healthy glance from one of the more intelligent Rothschilds. If ever Baring and Hope go wrong, it will be because they think themselves wiser than Rothschild and do not follow his advice."

But there was little danger; Baring had learned his lesson, and he had no thought of defying his rivals again. In the years to come the two houses cooperated often and amicably.

PART III

CHAPTER XII

IN THE SADDLE

only yesterday Salomon Rothschild and his brother Karl had been slinking about on the twilight edge of Aix-la-Chapelle, patronized by Gentz and Parish, snubbed by Labouchère and Baring, outsiders in the grand show? How strange and sudden were the ways of destiny!

But now,—now came the sky-rocket years,—the glamorous, golden harvest years. Fortresses so long besieged that they had almost appeared impregnable suddenly surrendered without resistance, with hardly a blow, unconditionally. The whole battered front gave way, wilted, and collapsed. The conquering five, with flags flying and drums rolling,—the strangest host in all history—marched on to victory. So swiftly that it made their heads dizzy, everything that they had ever aspired to, things that they had hardly dared breathe of even to themselves, dropped into their hands, all in the space of three brief years. The Austrian Consulate Generalships in Paris and London went to James and Nathan; a new house rose up in Vienna with Salomon in command; Naples, at the extreme tip of the Continent, was taken, and Karl, too, reigned in sovereign grandeur; and then came the splendid climax: all the brothers were raised to the baronate, with their children and their children's children to perpetuity.

It was Austria, the one country that had taken such long and arduous courting, which, having once yielded, gave herself so unreservedly and so whole-heartedly. Scarcely had the agenda of the Aix Congress been finally disposed of when Salomon emerged as His Imperial Majesty's chief banker. The haughtiest and most fastidious court in Europe opened its proud doors wide to welcome Salomon and Karoline (née Ştern) Rothschild. With the

mighty Chancellor securely bound to the golden chariot, the rest of the cabinet were drawn into the procession as a matter of course. Where the political power of Austria was ascendant, there also the financial power of Rothschild swayed. Salomon had but to whisper that he desired honors for a man in his employ or privileges for a relative, and the Imperial Hapsburg thought twice before he declined. Invitations poured in upon the banker and his wife; hardly a state function passed without them; archdukes and ministers dined and danced at their home. On the bourse he was supreme. He made and destroyed men and fortunes with a nod. To be in his good graces was better than credit; to incur his displeasure was ruin. Former rivals and competitors submitted to his dictation and prayed fervently for his continued success; for, in the words of Moritz Bethmann, the very prosperity of Austria was inextricably bound up with the fortunes of the House of Rothschild, "and the fall of such a colossus would be terrible."

But not alone in Vienna was the sun shining. In France also a new king had arisen, or at least a new minister of finance. Count Joseph de Villèle, like Metternich, was an ultra-monarchist Christian gentleman and thus had a natural aversion for the people of Jesus; but, even as the Austrian Chancellor, he was drawn toward the Rothschilds, and—so it was rumored and insinuated—by the same irresistible lodestone. So James acquired an ancient palace on the Rue Laffitte and filled it with masterpieces of painting, sculpture and such things, hired a box at the opera, and became a patron of the arts. The last of the sons of Meyer to be born, he was still a bachelor; but his position in society, the multitude of his friends and re-

tainers, and his elaborate entertainments, made a wife indispensable. Therefore he bethought himself of marriage presently. The latitude of choice, however, had since the last Rothschild wedding become still more restricted. What with being Austrian barons and all the rest of it, even families like the Herzes could now hardly aspire to family alliances with them. They were, like royalty, a subspecies apart. Only a Rothschild was fit to breed Rothschilds; and surely none but a Rothschild could provide the dowry fit for a Rothschild. The consequence of all of which was that in the summer of 1824 James was wedded to Betty, the youthful daughter of his own brother Salomon.

11

Imperial Austria, as distinguished from its imperial Chancellor and his efficient secretary, took Salomon to her bosom for pressing reasons of her own. The "good news" and the "pleasant surprises" which came to Gentz; the loans and gifts and holiday remembrances which Metternich received, the mediation and expert advice of David Parish, certainly removed obstacles; but the ministry of finance was in no position and in no mood to be choosy anyhow. The state exchequer had been suffering from distempers and violent attacks of vertigo for decades; the wars with Revolutionary and Napoleonic France had aggravated the malaise immeasurably; and no amount of subsidies, indemnities and kindred doses had sufficed to effect a cure. The Vienna bankers administered temporary relief from time to time; but their resources were limited, they lacked the necessary connections abroad, and, the

In these circumstances the financial alliance effected at the Congress of Aix was as gratifying to the distracted Minister of finance as it was to Gentz, Metternich and Salomon. Here was a concern with unlimited means, with youth, energy and ambition, and with powerful roots in Frankfort, Paris and the world's money capital, London. Most happy augury of all, the Rothschilds were making the advances; they were clearly taking a sanguine view of the Austrian economy. Count Stadion, the then head of the treasury, was not disposed to play the blushing maiden: he met the bankers more than half way. At the first opportunity he displayed his goodwill by putting business into Salomon's hands. Not many months after the dissolution of the Congress several trial operations of the already familiar type were entered into,—indemnity transfers and the like—and cordial feelings developed between the minister and the banker. A shrewd official without any nonsense about him, Stadion took the measure of his man at once, and having satisfied himself that the connection was promising, went to work with all his might to clinch it. Rothschild craved decorations, social advancement and an improved status for the Jews of his home city; he, Stadion, was prepared to labor with the Emperor, with the council deliberating in Frankfort, with Metternich, to secure them for him. It was an article of his faith that men placed under obligation made loyal servants; Austria, heaven knew, had little enough to offer; and if this useful house could be bought with such counters, why, he was willing to pay the price.

The next year business began in earnest, and Salomon justified Stadion's trust in human gratitude. There being as yet no Rothschild office in Vienna, and the nature of the enterprise being new to the firm, David Parish conducted the preliminary negotiations and shared subsequently in the result. Early in April the Emperor authorized the associated houses of M. A. Rothschild & Sons and Fries & Company (the Parish concern) to float a lottery loan of half a hundred million florins. Salomon, however, had ideas of his own about ways and means. With Stadion's approval he proceeded to throw open to

the public only a fraction of the issue. He calculated, and rightly, that an undeveloped market like Vienna and an untrained investment community like the Austrian would be swamped with such a mass of securities released all at once. Therefore, naturally, not a word was whispered about the next step, not for three months at any rate. With the help of Gentz, meanwhile, and with the aid, also, of a Baron Meseritz, who represented in Frankfort the Augsburger Allgemeine Zeitung and a syndicate of lesser journals in other German cities, a brilliant publicity campaign on behalf of the loan was launched in the press—not paid advertising, but a regular modern public education fanfare, with advice to investors, and short, snappy, popular disquisitions on finance and thrift and the like. Nor was the effort wasted. In a few weeks the scrip rose from barely over fifty to eighty, ninety and par; and long before the time the bankers had planned to let out the secret about the remainder of the loan, the first twenty millions were selling at three times the flotation figure. The loan was a riotous success.

Salomon's objective had been something more than a comfortable margin of profit; he was expecting a storm, and the ballyhoo with its effect on the market was to serve as a screen. Surely enough, the moment the remaining thirty-five millions were announced, there was a violent and agonized outcry from the purchasers of the earlier issue. It did no good for the bankers to point to the splendid results of the manœuvre and the high price at which the security was quoted. The public suddenly remembered that the culprit was a Jew, that the state (which meant the Austrian Christian taxpayers) would have to pay

back almost two guldens for every one the loan had netted, and—worst of all—that they discovered, too, that owing largely to the release of the new scrip the old was tumbling furiously and disastrously. There were open charges of manipulation and Jewish trickery (the participation and the correct church affiliations of Parish being overlooked) and whispered insinuations that Metternich, Gentz and many other high officials, including even Count Stadion, had had their palms greased. However that might be, the market gradually rallied, and thereupon the popular indignation subsided.

Salomon subsequently declared that his firm alone had cleared six million florins; but that must have been the gross. Extraordinary charges, such as the newspaper campaign and other expenses, were borne by the Rothschild part of the combine alone; and unless Parish lied on the night of his tragic death six years later, he did not even know of them. At least, he said then that he knew nothing of the other expenses, which included one or two items recorded by Gentz in that outspoken journal he kept. Under date of June 7 (1821) Gentz noted a conversation with Rothschild, in the course of which the secretary conveyed "remarkable and flattering comments" of his master on the banker, which "produced favorable results" from the latter. Neither the nature of the comments nor in whose favor the results were had is indicated; but an entry of some weeks later is more explicit: "He (Salomon)," says Gentz, "gave me an accounting of my share in the last few financial operations, and it turned out that, contrary to my highest expectations, I was five thousand florins to the good."

Ш

kindly treasury chief made an honest effort to have Parish participate; in a mild way he even insisted. Thereupon Salomon paid a visit to Gentz, and complained (says Gentz's diary) "with many tears about the inconsiderate manner in which various people were behaving towards him in connection with the new loan project." And within the week Gentz, to his "no small astonishment," received three thousand ducats on the Naples account and a day or so later two thousand more. Parish, in the meantime, went on shooting and drinking parties with Gentz—the jolliest pair of boon companions in the gayest capital in Europe. What could the unsocialized product of the Frankfort Ghetto do to match that?

IV

Any other piece of business would not have mattered greatly. But Naples was not commerce; it was conquest, empire. A banking firm might share risks and profits, without injury to its standing. Sovereignty was quite another thing. You either held it in solitary grandeur or you did not have it at all. And it so fell out, to Parish's misfortune, that the Neapolitan adventure followed hard upon the lottery loan.

The beginnings of the affair went back, like everything else in European politics since 1815, to Napoleon. Under the empire the Kingdom of Naples and Sicily had been governed by His Majesty Joachim Murat. After Waterloo the legitimate monarchy was, of course, restored by the holy alliance of the victors and for a space Ferdinand I ruled the land autocratically and more or less tranquilly. The embers of 1789, however, which Napoleon had un-

newly granted constitution, and restore the monarchy to its ancient and rightful glory.

There was no thought, of course, on Salomon's part of keeping out of the enterprise. The needed advances, indeed, he furnished forthwith, so that the expedition might be set marching without delay. He only begged Metthis time. Instead, he would send him down his younger brother Karl. Karl was still floating about vaguely in the old way, running errands, keeping up contacts, filling in the last of the five brothers to find a local habitation. Who knew? Perhaps his chance had come at last.

gered. He and his descendants lingered on till Italy became a nation, more than forty years later. At last, after years of wandering and waiting on his brothers, the last of the sons of Meyer had found an anchorage.

V

Fortunately there was no need to ponder this time what would please Herr Rothschild. He was right on the ground now, and he was not making any mystery of his aspirations. For five years he had been hankering after those fabled beasts that a martinet in the heraldry department had cut out of the coat of arms he had submitted. He wanted them back, and he wanted a title that sounded like something. Well, he should certainly have them. No officious meddling by experts now, no irony and no captious criticism. On the 29th of September 1822 all the five brothers were by imperial letters patent admitted to the hereditary aristocracy with the dignity of barons. Amschel, Salomon, Karl and James rejoiced and celebrated. Nathan eyed the sheepskin sardonically, dropped it into a desk drawer and forgot it.

CHAPTER XIII

IN OUEST OF A HALO

For they felt, without knowing it, that they were out

There was something far more painful than all this. Monarchs, chancellors, ministers, aristocrats and their ladies made one feel at his ease. Lesser men were not so considerate. In Austria and throughout the German lands, a strange, confused wave had suddenly arisen against the "kings of Jews and Jews of kings." The most incredible assortment of people and passions were stirred against them. Liberals who abhorred Metternich and all his works; functionaries and petty nobles resenting invasion of their privileges and dilution of their rank; staunch yeomen of

11

The great trouble was that Salomon and his brothers lent themselves so aptly to this sort of thing. Humorists with pen and brush found them a god-send. They were not only fabulously wealthy; not only parvenus of obscure and doubtful origin, and the favorites of the mighty of the land, and members of a hitherto despised race and religious sect; other people were all these things, yet it

occurred to no one to make sport of them. The Rothschilds, as even the devoted Gentz had observed, were a species apart. They hobnobbed on terms of equality with distinguished and cultivated men, with the flower of breeding and learning; and all the while they remained the crudest ignoramuses. They spoke the harsh, guttural jargon of the Ghetto; they could not write a presentable letter; their manners were offensive, their persons unattractive, their voices rasping, their gestures irritating, their minds commonplace. Advancement had no effect on them; contacts did not develop them; they seemed incapable of growth; their brains were impervious to ideas; their souls resisted refinement. The brilliance in which they moved only heightened their ludicrousness.

Where had they come from and how had they got there? It was known only that they hailed from Frankfort. The rest was a mystery; and they did nothing to dissipate it. Their father was a merchant—vague word. Merchants, even Jewish ones, educated their sons. These astonishing monarchs of finance were all but illiterate; they had risen to their commanding position with less learning than their humblest clerk; it was reported that they were not at home even in the lore and traditions of their own people. Surely any merchant, however lowly, could scrape enough income to bring up his children respectably. And it was hardly imaginable that the shadowy Meyer was a poor man. He must have given his sons some kind of a start. Such fortunes as the Rothschilds' do not grow from nothing in a single generation. And they were still young men. The oddest, and certainly not the most reassuring part of it was the consistent silence—one could almost call it secrecy—in which they wrapped their an-

tecedents and their beginnings. They seemed to be ashamed of them.

and starve so that the Jewish baron and his brothers abroad might pocket the difference? (The excited economists naturally omitted to mention that the insolvent state was unable to induce the Christian bankers to take the business even at that figure.) How had Herr von Rothschild succeeded in misleading and betraying the populace? By spreading lies in a press that was either too dull to see through his game or something worse. By giving away whole parcels of the securities to people whose names need not be mentioned because everybody knew them. By driving up prices on the exchanges which he held in the hollow of his hand. By withholding the truth. In short, by subterfuges to which no gentleman with honest Teuton blood in his veins and the teachings of Holy Church to guide his footsteps would ever have stooped.

Then the liberals took up the lament. An edifying spectacle: the Prince of the reaction and the king of coin cooperating to extinguish the freedom of Europe. In Naples, in Piedmont, in Spain, oppressed peoples arise to demand their rights; they exact constitutions from their tyrants; liberty and justice triumph; a new era of democracy and progress is about to dawn; when, lo! the unholy alliance descends upon the helpless lands with steel and with gold and restores the cowardly assassins to their thrones. The artists performed their part with devastating effect. One cartoon showed a gentleman with marked Semitic features, attired in slovenly Ghetto garb and an aristocratic lace shirt-front, standing in a chariot made out of a strong-box and propelled by the two-headed imperial Austrian eagle, careering over Europe. In another, entitled "The Pump," Rothschild, obese and coarse, stood knee deep in a pool of gold and with both arms acting as

suction levers poured the world's wealth into the pockets of monarchs.

ш

of respect, for instance, which Salomon now and then sent to Frau Metternich and the children—a costly bon-bonnière, a live American deer for Christmas, a trifle of some sort for a birthday—and surely no transaction was straighter business than the loan to His Highness himself. Yet it could only too easily be imagined the interpretation that a scurrilous press and an evil-minded public would put on them.

And that was only the beginning. Once a gentleman like Hormayr commenced prying, what lengths might he not go to? The Elector William was dead, and so was Buderus; but their correspondence files were not buried with them. And the Jewish community of Frankfort still had its tax records. And the police archives of Dunkirk, Gravelines, Paris. And London. What a tale it would all make! Salomon shuddered at the thought.

TV

The protracted deliberations of the council in Frankfort came to a sudden head. For years the Jewish question had been bandied about, while a determined clique with the presiding officer at its head blocked its final liquidation. Metternich had been friendly all along; but he was a very busy man, and the rights and liberties of a few thousand Jews in a single city were rather a small patch on the map to a statesman who carried the world on his shoulders. When, however, Baron Rothschild intimated that his good offices would be gratefully remembered, the thing began to look very different, and word went out to the Austrian delegation as well as to a few lesser ones in the Chancellor's sphere of influence urging speedy action. The obstructionist chairman, as it happened, was himself a Metternich subaltern. He was given to understand that his tactics were unpleasant, and that he had better change them. He resisted; whereupon the axe descended upon his head. His successor received explicit instructions from the outset, so that there was no further trouble. In the summer of 1824 the Jews of the free city of Frankfort were at long last citizens.

of the pet doctrines of the French Revolution was, to say the least, remarkable. So tongues continued to wag and eyebrows went on shrugging.

V

The modern personality magazines could do worse than go to school to Gentz and Meseritz; for it is very much to be doubted whether these early nineteenth-century

of his own property that the wealth entrusted to him by the Elector is saved from the clutches of the invader.

Meyer, in the meantime, has passed away, but his soul lives on in his sons to guide and direct them. When about to die he calls them to his bedside and adjures them to keep the torch of high principle aglow, to love one another and work in harmony; and so deep is the young men's piety and veneration toward their saint-like parent that

With the example of the Rothschilds before us, concludes Gentz in a brilliant philosophical peroration, it is idle for people to talk about luck. "In particular instances good or adverse fortune may, indeed, determine a man's destiny in life, though even then not exclusively. But enduring success, like persistent ill-fortune, is al-

ways and to a far greater extent than is commonly supposed, the fruit of personal merit or personal inefficiency and wrong-doing."

VI

Gentz looked upon his handiwork and found it good. Salomon was pleased enough with it to pay for it. Amschel only wished there were more of it. And what editors thought of it, from the Augsburger Allgemeine Zeitung to the Brockhaus Konversations-Lexikon, can fairly be inferred from their readiness to publish it. One man's judgment alone has, unhappily, not come down to us. Back in Cassel, the Elector William II was reigning in his late lamented father's stead. A man of thirty-six in 1813, he had witnessed one or two of the post-exile passages between his parent and the heirs of Meyer not recorded in the "Biographical Account"; and if he read the Gentz idyl, his comments must have been worth hearing; but his literary interests appear to have been limited, and he may never have laid eyes upon it.

There was, for instance, the irritating affair about wine. During the occupation Marshall Kellermann, commanding the army of the Elbe, made his headquarters just outside Hanau. He fancied the liquids in the palace cellars, and when he was obliged to move on he ordered them taken along. They were later offered for sale in Frankfort. Someone notified the rightful owner, at the moment languishing in Prague, and William, after sampling them, sent word to Meyer that he buy them back and store them in his warehouse against a happier day. There the barrels, fourteen in number, remained till 1814. On their

being delivered to Cassel, it was found that the numbers did not tally and that the quality of the contents did not measure up to the price. There followed a lengthy and acrimonious correspondence, the court demanding that one of the bankers present himself at Cassel to "straighten out the difference." The Rothschilds, at the moment occupied with more important matters, politely declined the invitation. Serenity's letters becoming from this point on a little too hortatory, the Rothschilds did not answer at all. Thereupon an ultimatum from All-Highest reached the offices of the Bornheimerstrasse, which elicited the following reply:

"As we have most humbly explained already, our only motive in this transaction has been to give satisfaction to Your Royal (!) Highness. The wines were brought to us by the late Councilor Winzingerode. We have faithfully stored them; but we can hardly be held accountable for the invasion of our cellars by foreign troops, for the outbreak therein of a conflagration and for the consequent breaking in of all sorts of people. . . . It is impossible for us to know what has happened to the wines in the course of these catastrophes. We are nevertheless willing, though we cannot justly be compelled, to stand the loss to this extent: We will on our part waive the very considerable traveling expenses to Prague which are still due us, as well as the equally substantial and likewise unpaid advances on account of courier and mail charges; providing that Your All-Highest will at the same time agree to regard the mine matter as closed."

Whether or not it was has not transpired. But William could in this instance hardly be blamed for being a little suspicious. It so happened that some time earlier another incident had set him wondering. He had asked for those boxes of documents which at the time of his departure had been taken to the Rothschild cellar in the Judengasse. He had needed only to glance at them to perceive

that they had been tampered with. One may imagine his consternation when, upon their being opened, it was found that not only had his own papers been grievously disturbed but that a number of bond certificates belonging to the departed Meyer had been stuffed in among them! The young Rothschilds had offered a curious explanation: Originally the boxes had been placed in the house cellar. On the night preceding the raid by the French police, it had been deemed wise to remove them to the secret space under the courtyard. The boxes were large, and the connecting passage was narrow. At the last moment it had, therefore, become necessary to break the things apart and after effecting the transfer nail them up again. It was dark and damp, and the time was short; effects of the family's own were being brought to safety at the same time; so that some confusion was inevitable. Why had no word been said about the matter at the time? To that the only reply they could make was that they did not know; it had happened so many, many years ago.

But William II had no wish to reopen old sores, and if the Gentz-Meseritz version of the Rothschild relations to his father did come to his attention, he kept silent. Other people, on the other hand, were less discreet. If, said the cynics, Meyer really was the noble soul he was represented to be, why then there had been a distinct reversion. His successors had certainly inherited his energy, his punctuality, and his capacity; but whether he had also bequeathed to them some of his other shining virtues seemed open to doubt. On the whole, therefore, the immediate effect of the "Biographical Account" was somewhat disappointing; and in the years to follow, Salomon and his brothers found that Gentz's extravagant pæan had done more to make them suspected and ridiculous than all the libels and calumnies of their enemies put together.

CHAPTER XIV

LEADEN SKIES

The ominous part of it was that, each time, the upheaval occurred in the territory of the family's titans, Nathan and James. Salomon's imperium in Vienna, though

Gentz had long ago said of them) "without the remotest inkling of any higher relationship in the world," must go down before rivals with culture and education? It looked very much like it. Their enemies, believing what they hoped, were convinced of it. But providence had other plans.

n

The series of operations with the French monarchy, when they were begun three years before, had held out every promise of being the most productive, as they were the boldest, stroke the House had yet attempted. Patterned on a gigantic scale, executed by James under the immediate and constant direction of Nathan himself, assured of the government's adherence by the complaisant and powerful Villèle, (who was now chief minister) they had seemed a foregone success. They were to be one more turning point in the sweeping Rothschild advance. With their limitless resources in capital, influence, connections, nothing could possibly go wrong; yet, as it turned out, nearly everything did go wrong. No danger, no accident was overlooked or unprepared for—none, except those that actually came along. When, by 1830, the great muddle was cleared away, the firm emerged shaken and sobered, its standards very much bedraggled, its losses in prestige, friendships, confidence and money so vast that any other organization would have collapsed under them.

The preliminary step was taken in 1823; and although the transaction—involving a capital of over four hundred million francs—was far and away the most ambitious in

Lack of imagination and old-world inertia alone were responsible for the burden of usury under which the nations were groaning.

of small investors represented in the chamber of deputies, was another kettle of fish. He grasped at the proposal with enthusiasm, partly because the annual interest charge had become an intolerable drag on the budget, and partly (if Ouvrard's insinuations are to be believed) on more human grounds.

Having got that far, Nathan proceeded to set up his consortium. The preliminary loan was a family affair, none but the Rothschilds participating. But, daring as he was, he hesitated to plunge into a four-billion franc operation single-handed. So for the conversion scheme he called Baring in London and Laffitte in Paris to his side. The tables had turned somewhat since the Congress of Aixla-Chapelle; and the distinguished British house made no difficulties. The three firms then made up a pool of a billion francs, in the event that they should have to take over a sizable part of the three-per cent rente solid, and lined up the smaller banks in their respective spheres. How Baring and Laffitte raised their part of the outlay the story does not tell; but a circumstantial account of the trouble that Nathan went to is given by Ouvrard in his Memoirs. Ouvrard's feelings toward the Rothschilds make him normally a prejudiced witness. In this instance, however, his testimony is largely corroborated by another, more credible, contemporary. What the Rothschild brothers did, it seems, was this:

Nathan, it must be remembered, still had his mass of unsold Consols from the English conversion deal. It occurred to him that by withdrawing them from the market at this time, he might kill several birds with one stone. First of all, the impression would go abroad that the securities had found buyers, thus enhancing their price. Secondly, the same idea would just at this moment have a salutary influence on French financial opinion. Lastly, the Bank of England, eager on its own account to bulk Consols, would do whatever it could to lend color to the above-named impression. The Bank, in fact, took Nathan's unsold bonds as collateral, and advanced him bullion at a nominal rate of interest. The gold was now shipped across to James, who deposited it with the Bank of France against fluid capital. This complex operation,

however, only netted a matter of seventy million francs, while the pool required a third of a billion. There was, to be sure, the deferred payment arrangement in connection with the four hundred million loan; but from that source only about a quarter had thus far been realized. Total: a bare two hundred million. Then Villèle came to the rescue with a hundred and twenty millions' worth of treasury certificates (bons royaux), which James took over against future payment and at a rate of interest far in excess of the current market.

In the meantime the bull movement was coming on at high speed. Within a few months the old French rentes had touched par; by the beginning of spring, 1824, they had soared to 110—away beyond what was needed for the purpose of conversion. Even for the promised but as yet unissued three per cents, investors were offering over 80, which was several points above the quotation at which the government was prepared to float them. The Rothschilds looked on with delight at the strange spectacle of their old rival stocking up on French bonds, so that a loan of their own might be boomed. It was the performance of Aix over again, with the rôles reversed and the motivation slightly revised.

ш

"Looked on" is hardly an accurate description; for James was enormously active. The moment 110 was reached Baring and Laffitte advised the head of the consortium that in their opinion it was time to start selling. Well, it certainly was. James had thought so long ago. He had been unloading for weeks past, not only the five per cents destined for retirement but the as yet non-existent threes. Without putting too fine a point on it, this quiet lone-hand work was nothing but bear tactics against the converted security and something not to be distinguished from a betrayal of associates. At any rate that was how Baring and Laffitte viewed it, when they found out what had been happening. Baring, indeed, took the matter so hard that he never again cooperated with the Rothschilds, though James protested he had only been throwing off his last year's loan in which the consortium had no share.

the upper house suddenly developed a profound concern over finance! Led by the Viscount de Chateaubriand, a member of the cabinet but a violent personal enemy of the chief minister, the opposition carried the day and the measure was beaten.

Ouvrard and his friends cleared several millions, while the Rothschild consortium (minus Rothschild) barely scrambled out alive.

IV

To one of the Rothschilds' former friends and associates, fortune proved less indulgent. In Vienna, among the first victims of the great crisis was the ancient firm of Fries & Company with David Parish at its head. Driven out of the lucrative state affairs, in which it had played a lead-

spell. Rather than have a scene, Metternich handed him part of the money and signed a fresh note for the rest. Now came Gentz's turn. Poor Parish had not the heart to go in person to his old companion, and he handed over bis note to a third party. Gentz, however, did not mix money matters with sentiment. He declined absolutely to recognize this "utterly rimeless, crazy, antiquated obligation."

All along Parish knew that only one man in Vienna could save him—Salomon Rothschild. Indeed, he not only could but would. He was a rough diamond. Had not Moritz Bethmann said that "no person ever left him uncomforted?" But he hesitated in his present plight to appeal to the man whom he had once helped, patronized and perhaps slightly despised. He went finally when every other hope had vanished. Was it the distracted mood, the too proud tone, the dignified manner as if he were asking his due when he ought to have humbly begged a favor? It might have been any of these or all; or possibly, because Parish simply could not bring himself to say what was in his heart, Salomon did not fully realize the desperateness of the situation. Only this is sure. Parish did leave Salomon uncomforted. And the next day—it was April 27—his body was found in the Danube. In his rooms were several letters. One of them was for Prince Metternich. It began:

"Before I leave the world I must write a few words to you, my Prince, to tell you that I am going to my grave without malice but with the conviction that you have treated me very unjustly and have sacrificed me to the greed of a family who have known better than I how to attach you to their side. It is unnecessary to go into the early history and development of our acquaintance with the Rothschilds. That these people are with all their riches heartless men, with no feelings other than for their cashbox, the world has long known; and how ungratefully they have acted toward me under your special patronage cannot after my death remain a secret either."

After telling him what arrangements he had made for the collection of the residual note, Parish concluded the letter thus:

"Farewell, my Prince. Should you ever think of an unfortunate who was sincerely devoted to you, I hope that the recollection may cause you no remorse."

To Salomon he wrote with even greater bitterness: "I am leaving the world because I have been most shamefully betrayed on the one hand and rewarded with the blackest ingratitude for very real kindnesses on the other. If you have any conscience it cannot but tell you that you and your brothers richly deserve my last reproach, and that by your recent heartless conduct you have caused the ruin of one of the best friends your house ever had. When I drew you in 1817 into the French and Austrian affairs, against the wish of my oldest and most intimate friend, I was warned on all sides that you would leave no stone unturned to force me out of them. How well and by what means you have succeeded, under the patronage of Prince Metternich, to grab for yourself alone a variety of transactions in which I was by the laws of God and man entitled to have a share, I have known for some little time . . . Although my house is pretty badly shaken, I could still have managed, with the help of friends and family, to meet all our obligations—had you only found it in your heart to restitute a fraction of the

money which would never have become yours if I had during our association stood upon my rights and demanded my just share in the business with the Austrian and Neapolitan governments. You, however, have found it more convenient and more profitable to come to an understanding with the Prince in the matter of the old bond operation and by this means to get him entirely on your side. The moment I found myself on the outside of this combination, I knew that it was impossible to save the firm, and I decided not to live through the disgrace. Now I must close. I hope for your sake that you will but rarely think of a friend whose memory can only be painful to you."

There were echoes in that letter that reminded Salomon as he read it of other days and other controversies. Where was it and when that a rival, beginning as a friend and associate, had pitted himself against the House of Rothschild and lost? Why, of course, Rueppell and Bethmann, the innocents who, away back in 1801, made the then young Amschel and Salomon their brokers to the court of Cassel! Oh, but this was really sad. Poor, poor Parish! Such a proud, brilliant fellow, to end like this! Yet, what could one say? Or do? It was the way of the world, of business, of destiny. The giant wheel turns, one basket goes up, another down. It is no good to sit and lament. For some must perish while others triumph. But life must go on.

v

The giant wheel gave another lurch, and for one breathless moment it seemed that the turn of the great colossus

Just prior to these developments, meanwhile, the House of Rothschild had secured a contract, in open competition, for a large new French loan. What with the market artificially boomed up by the conversion manœuvres of a few

This was on the evening of July 24. The next morning, before he went to mass, Charles X signed the Polignac decrees, and of the following day they were published. Among other things, the recently elected chamber was declared dissolved, fresh elections upon a more restricted suffrage were ordered, and the press was gagged. Paris immediately took up the challenge. Overnight barricades made their appearance in the streets, and there followed bloody encounters with the military. On the bourse pandemonium reigned, with the rente falling thirty points

in a single day. Old inhabitants said it was 1789 all over again. The king and the ministers, terrified by the storm they had let loose and deserted by their supporters, fled the capital. Then unexpectedly a savior appeared. Louis Philippe, Duke of Orleans and a cousin of Charles X, was known for the liberal proclivities he had inherited from his popular father, the famous Philippe Egalité of the first revolution; and when he now gallantly rode out among the embattled mobs, he was acclaimed with enthusiasm. France had a new king and a more or less new dynasty; the Bourbons were dethroned for ever; and the July Revolution was over as suddenly as it had begun.

That was all very fine, but it hardly comforted James and his brothers. The compromise was a great victory for the commercial middle classes, and that was all to the good. As James, who was, moreover, personally very close to the new monarch, wrote to Salomon a little later: "Business will certainly be safer here in France now than it was under Polignac." The situation, however, was not just local. There were apt to be European complications. Within a few weeks, indeed, the conflagration, though it had been so miraculously got under control at home, leaped across the frontiers to devastate the innocent bystanders. In numerous places in Germany, including the district around Frankfort, there were peasant uprisings, castles were attacked and burned and their noble occupants driven out. The exiled liberals of Spain and Italy, emboldened by events, became active again. In the United Netherlands a revolution broke out which not only deposed the king but ripped the country across the middle and made Belgium an independent state. Grave rumblings were heard as far east as Poland. Naturally the Tsar was

disquieted, and refused to speak to Louis Philippe, whom he somewhat illogically saw as the source of all the mischief. Metternich, it goes without saying, was thoroughly scandalized at this destruction of his life-work for absolutism and legitimacy. War and peace hung in the balance.

tell you it's enough to lose your mind . . . For common sense is all for peace, yet the idea of war is gaining favor on all hands."

The idea might gain; but war, after all, did not come. England held firm; the king of France, assiduously coached by James, conciliated the ruffled feelings of his brother monarchs; even Metternich, after a year of bristling and sword-rattling, listened to the wisdom of Salomon. Providence in its inscrutable way, after having raised up the House of Rothschild upon a foundation of war, now chose to make it its instrument of peace. Surely, it is not for blind, weak man to question or to mock.

CHAPTER XV

PASSING OF A TITAN

He was not yet sixty years old. In the ordinary course he might have lived to a ripe old age. The Rothschilds came, on both sides of their ancestry, of long-lived stock. Meyer had been nearly seventy when he died; Guetele, the bereaved mother, survived her great son by thirteen years; and of Nathan's four brothers three lived to be over seventy-five. Was it the hardships and exertions and perils of his youth that had undermined his resistance? He seemed to thrive on hard work; and surely Amschel and Salomon, both of whom were born before him and survived him by a score of years, had had it no easier. He was wont to say that he paid the price of wealth, success and recognition in universal jealousy, envy, and perennial threats of death; and though he was anything but a sensitive man, unpopularity and insecurity doubtless affected his nerves. Yet, living in England, he was very much safer and more respected than his brothers on the Continent.

Twenty-four years before, the death of his father, the titular founder of the House, was scarcely remarked beyond the Judengasse of his native city, and even the newspapers of Frankfort did not mention it. The passing of Nathan stirred every capital of Europe; a tremor went through the bourses and the chancelleries from St. Petersburg to London; hardly a journal of importance but noted the event and sketched his career. To England, if the tale is to be believed, the news was brought by his own pigeon post. Several days later his body arrived in a coffin so magnificent, "so handsomely carved and decorated with large silver handles at both sides and ends that it appeared more like a cabinet than a receptacle for the dead." Jewish funerals are distinguished for their austerity, for a kind of Oriental gloom; flowers, music, processions are rigidly excluded. The corpse is wrapped in hastily sewn musling garments, placed in the crudest pine casket, and carried silently to its last destination. Nathan was all his life long

a member of the Orthodox congregation, and he was buried in the Jewish East-End Cemetery. But he was after all one of the greatest of his race and time, and so "he was placed in his last resting place with a gorgeous pomp and display that seemed hardly appropriate to the solemnity of the occasion. . . . A procession of carriages nearly a mile in length followed it. Among those who were present . . . were the Austrian, Prussian, Neapolitan and Portuguese ambassadors, besides the Lord Mayor, the sheriffs, aldermen and a crowd of minor dignitaries."

Whether credit for these arrangements belongs to Nathan himself or to his family cannot be determined; for his complete will was not made public. Because of that, also, it has remained a dead secret to this day just what fortune he left behind. Even to his executors the details were not revealed. The skeleton testament which was given out confined itself to the conduct of the business and the marriage of his daughters. The management of the House in St. Swithin's Lane was entrusted to his four sons, and they were to work in harmony with their uncles' Houses on the Continent. Each of his daughters received a legacy of £100,000. They, like the daughters of Meyer, before them, were to have no part or lot in their father's, now their brothers', affairs. To charitable institutions, employees or other dependents, no bequests were made.

IJ

While the official press and official personages were busy repeating the legends made familiar by Gentz, and vying with one another in hyperbole, here and there criticalminded people did not hesitate to present a slightly different picture of the man and the methods by which he had risen. A mass of anecdotes gained currency—some malicious, some sympathetic, most of them doubtless apocryphal, but each, as is often the case with such stories, seizing upon some central truth of character. The most prolific of these narrators was Nathan's old friend, the famous anti-slavery apostle, Sir T. Fowell Buxton; and though his intention was certainly kindly in every instance, it may be doubted whether outspoken enemies like Ouvrard have done quite so much to strip the greatest of the Rothschilds of his halo. Thus by way of illustrating Nathan's industry and solidity, Buxton reported a dinnertable remark of his which is at least open to less flattering interpretation.

"I hope," said another guest to the banker, "that your children are not too fond of money and business to the exclusion of more important things. I am sure you would not wish that?"

"I am sure," Nathan replied with emphasis, "that I should wish that. I wish them to give mind, soul, heart and body—everything—to business. That is the way to be happy. It requires a great deal of boldness and a great deal of caution to make a great fortune; but when you have got it, it requires ten times as much wit to keep it."

And that Nathan meant what he said is confirmed by an incident related by Spohr, the German violinist and composer, who sought him out in London with a letter of introduction from Amschel. Nathan gave the musician a limp hand to shake, which he promptly returned to his pocket. "Music?" he queried without interest. "I understand nothing of music. This," as he rattled the change in his pocket, "this is my music."

But he found little joy even in his wealth, despite his own formula. When Buxton, impressed by the comforts and luxuries of the Rothschild mansion, said to him, "You must be a happy man in such a home as this," the disillusioned magnate replied, "What? Happy! I happy, when just as I am going to dine a letter is placed in my hand saying: 'If you do not send £500 I will blow your brains out.' Happy, indeed!"

To show that the great man was not a mere money-bag but had a vein of humanity and even wit in his make-up, Buxton reports him as saying, "Sometimes to amuse myself I give a beggar a guinea. He thinks it is a mistake, and for fear I should find it out off he runs as hard as he can. I advise you to give a beggar a guinea sometimes. It is very amusing."

So much for the Rothschild sense of humor. Equally self-revealing are Nathan's observations on success in general and his own in particular:

"I have seen many clever men, very clever men, who had not shoes to their feet. I never do business with them. Their advice sounds very well, but fate is against them. They cannot get on themselves, and if they cannot do good to themselves, how can they do good to me?"

Besides there were what he called his principles: "I always said to myself, what another man can do I can do too. I have always been an offhand man. I never lost any time. I came prepared for everything and closed bargains on the spot."

More detached observers believed to have discovered the sources of his greatness in a variety of other principles. "One cause of his success," said a contemporary, "was the secrecy with which he shrouded all his transactions, and

the tortuous policy with which he misled those who watched him the keenest. If he possessed news calculated to make the Funds rise, he would commission the broker who acted in his behalf to sell half a million. The shoals of men who usually follow the movements of others sold with him. The news soon passed through Chapel Court that Rothschild was bearing the market, and the Funds fell. Men looked doubtingly at one another; a general panic spread; bad news was looked for; and these united agencies sank the price two or three per cent. This was the result expected, and other brokers, not usually employed by him, bought all they could at the reduced rate. By the time this was accomplished, the good news had arrived; the pressure ceased; and Mr. Rothschild reaped his reward."

An acquaintance of a more sympathetic temper declared: "This is the key to an understanding of Rothschild's character. His ambition tended to the accomplishment of elaborate financial operations—of making money, if you like. But in this phrase the emphasis must be placed on the making; for he did not value either money in itself or the things that could be procured by it. He had no taste or inclination for what every Englishman seeks as soon as he has money enough to buy it—comfort in every respect. His ambition was to arrive at his aim more quickly and more effectually than others, and to steer toward it with all his energy. When his end was reached it had lost all its charm for him, and he turned his never wearying mind to something else."

The inspired Gentz had something akin in mind when he wrote of the family generally that one of their leading principles was "to look for no exaggerated profits in any undertaking, to set definite limits to each operation. . . . In this maxim—servare modum finemque tenere—lies one of the chief secrets of their strength. There can be no kind of doubt that with the means at their command they might have obtained far greater advantages in one or another particular operation. Yet, even though the safety of the enterprise might not have suffered by their so doing, in the end they would nevertheless have profited less than they did by giving their resources the widest scope and thus having a greater variety of business constantly returning to them." All of which is a high-flown way of saying: Not all the eggs in one basket. Quick sales and fast overturn; for low profits never yet ruined merchant.

m

A shrewd and vivid, if not wholly appreciative portrait of Nathan as he appeared on the Royal Exchange has been drawn by a fellow-speculator:

"There is a rigidity and a tension in his features that would make you fancy, if you did not see that it was not so, that someone was pinching him behind, and that he was either afraid or ashamed to say so. Eyes are usually denominated the windows of the soul; but there you would conclude that the windows are false ones, or that there was no soul to look out of them. There comes not one pencil of light from the interior, neither is there one scintillation of that which comes from without reflected in any direction. The whole puts you in mind of a skin to let, and you wonder why it stands upright without at least something in it. By and by another figure comes up to it. It then steps two paces aside, and the most inquisi-

tive glance that you ever saw, and a glance more inquisitive than you would ever have thought of, is drawn out of the erewhile fixed and leaden eye, as if one were drawing a sword from a scabbard. The visiting figure, which has the appearance of coming by accident and not by design, stops but a second or two, in the course of which looks are exchanged which, though you cannot translate, you feel must be of most important meaning. After these the eyes are sheathed up again, and the figure resumes its stony posture.

"During the morning numbers of visitors come, all of whom meet with a similar reception and vanish in a similar manner. And last of all the figure itself vanishes, leaving you utterly at a loss as to what can be its nature and functions.

"The name of this gentleman, the entertainments given by him, the charities to which he occasionally subscribed, and the amount of his transactions in the money market were blazoned abroad. Peers and the princes of the blood sat at his table; clergymen and laymen bowed before him; and they who preached loudest against mammon, bent lowest before the mammon-worshipper. Gorgeous plate, fine furniture, an establishment such as many a noble of Norman descent would envy, graced his entertainments. Without social refinement, with manners which, offensive in the million, were but brusque in the millionaire, he collected around him the most fastidious members of the most fastidious aristocracy in the world. He saw the representatives of all the states in Europe proud of his friendship. By the democratic envoy of the New World, by the ambassador of the imperial Russ, was his hospitality alike accepted; while the man who warred with

slavery in all its forms and phases was himself slave to the golden reputation of the Hebrew. The language which Mr. Rothschild could use when his anger overbalanced his discretion was a licence allowed to his wealth; and he who, when placed in a position which compelled him to subscribe to a pressing charity, could exclaim, 'Here! write a check, I have made one —— fool of myself!' was courted and caressed by the clergy, was fêted and flattered by the poor, was treated as an equal by the first minister of the Crown, and more than worshipped by those whose names stood foremost on the roll of the commercial aristocracy. His mode of dictating letters was characteristic of a mind entirely absorbed in money-making; and his ravings when he found a bill unexpectedly protested were translated into mercantile language ere they were fit to meet a correspondent's eye."

Patently the anonymous author of these lines did not admire Nathan Rothschild. Yet the portrait is not malicious or overdrawn. Many men who thought well of Nathan—among them Rother, Wilhelm von Humboldt, Herries and even his own brother-in-law Moses Montefiore—testified to the same effect either explicitly or tacitly. The warmest admirers of his truly great gifts thought it prudent to pass over in silence or to allude in veiled words to his arrogance, his utter lack of refinement and civilized manners, his indifference to the amenities of decent society. Perhaps Humboldt summed up the man, when in a private letter to his wife, he said: "Rothschild is a quite raw and quite uneducated man, but he has much understanding and for money real genius." His trouble, like Napoleon's, was that his rare and special talents lifted him far above the social station for which

wrung from Austria; he appeared on 'Change in even more slovenly garb than was natural for him; he gloried in his Ghetto accent. Cultivated people who could afford the luxury snubbed him; and the more they did so the more contemptuous he grew.

What had he to do with such superficialities? He was an original, a great man. He had trampled on the conventions of business, he had broken all the precedents of the Royal Exchange, and the world applauded him. The weaklings who had got hurt might scream and call names, but in the seats of the mighty he was received with acclaim. Let silly, pretentious idlers with nothing else to distinguish them worry over such trifles; he had bigger things to think about. The world did not expect conformity from such as him. The proof of it was that the strong, the highly placed, even the well-bred opened their homes and their arms to him. He was a doer, a natural aristocrat, one of the chosen of earth. With great wealth, with achievement, there was no need of submitting to the ordinary rules of courtesy; he was judged by standards of his own.

But he found out presently that he was mistaken. He caught people taking him in with raised eyebrows; there were suppressed grins behind well-kept hands. Oh, well; he would make some small concession. His wife and his children had a right to their social position, and he would do nothing to jeopardize it. There was so little to it all anyhow—an affair of externals. A man who had done the big things he had done would hardly be fazed by such trivialities once he cared to attend to them. He would surpass the snobs in display. So he filled his premises with pictures and plate and upholstery. He dressed up. He

bought a house in Piccadilly and a princely estate in the country. He even rode and played the country gentleman. It was Napoleon reviving the glories of the Bourbons all over again, and it succeeded even less. Nathan Rothschild being himself was at least dignified; but the up-start of the Judengasse aping the toffs and the squirearchy was ridiculous.

and the highness became impatient. "Did you hear who I am," he asked. "I am——," and he named his full title. "Very well," said Nathan from among his papers, "take two chairs."

But he was not alone in his misery. With the possible exception of Karl, all the Rothschilds of the first generation were haunted by the mocking ghosts of their past. The Judengasse and the shop threw a gray shadow across their path; to no matter what heights they rose it followed them and dulled the luster of their achievements. It was the price they paid for success.

PART IV

CHAPTER XVI

LONDON

Not that within the banking fraternity this monopoly went unquestioned. Far from it. The history of the House

And yet it is difficult to escape the feeling that all this varied and far-reaching activity, immense and significant as it would look in the hands of a rising young concern, is—against the dazzling background of the age just past—

something of an anti-climax. There is expansion, even conquest; but it comes easily, almost unsolicited, without the fierce clashes, the resounding turmoil of other days. The big moment of the drama with its breathless suspense, its color and its intensity, is past; and the action takes on a slower and more stately measure as it declines to its inevitable dénouement. After 1836 the House of Rothschild, though apparently growing, merely holds its own. It cannot be said—not at any rate for yet a long time—that its vitality has departed; but having climbed to its zenith, it can henceforth do no more than either stand still or descend. Actually its seeming gains are but the harvest of its youth. Everything comes to it in virtue of the past, and its greatest triumphs are only repetitions.

Nor can the historian of the family avoid an inversely corresponding change of tempo. To relate the remainder of the story with anything like the fulness given to the earlier period would be to want in a sense of proportion. The epic rise of the Rothschilds has merited an elaborate narration; but the remaining years are a gaudy and largely prosaic procession of the rewards of success. The very conclusion lacks spirit. There is no crash at the end, no catastrophic débâcle such as has marked the exit of other dynasties.

Ш

But the end is still a long way off. It is, rather, the entry into the promised land. The promised land, certainly, for Lionel and his brothers; but to Nathan, had he been able to see it, it would have seemed the vale of disillusion. His heirs, alas! did not all fulfil the tender and pious dreams

he had dreamed for them. Perhaps in the arrogance of youth and sudden liberation they considered themselves ten times as clever as their father. From infancy he had preached to them the maxim that it takes ten times as much wit to keep a fortune as to make one. They had come to believe it, and having entered into their inheritance, they practiced it. To preserve the parental legacy; to administer it wisely and diligently; to increase it, even, within the limits consistent with the family's high traditions and their own varied and exacting avocations—that surely was their duty to the founder and to their own interests; but as to giving "mind and soul, heart and body, everything, to business," it was not their idea of "the way to be happy," whatever their father's convictions on the subject might have been.

So it has always been, and so most likely it will always be. The self-made man, coarse, greedy, ignorant, capable, ambitious, not too seriously irked by scruples, unaware of the world's disapproval and of life's greater prizes or indifferent to them, a little brutal and more than a little ridiculous, strives for wealth, for power. He attains them; and, not illogically perhaps, he tells himself that if he, in spite of his handicaps (he does not know it is because of them), could get so far, what might not his children, with their knowledge, their refinement, their well-groomed persons, their friendships and their head-start, accomplish? He is not guided by reason or even by affection as much as he thinks, of course. In his children he sees himself again, reincarnated, possessing all his abilities, lacking all his crudities. In them he shall recapture what he missed in youth. They shall have the advantage their father could not have and be the equals of every exalted one who ever

snubbed their father, and at the same time they shall have the driving force, and the narrow single-mindedness, and the rude, all-conquering, reckless cupidity with which his own uncouth beginnings equipped him.

under the clerks; he was getting a thorough grasp of affairs; but as for this régime exerting a counter-influence, as for its producing another Nathan, devoted mind and soul, heart and body to business, it was disappointing. Nathan had not been trained by any indulgent and obsequious staff of experts in a world banking house. He had learned finance by buying muslins in Manchester. It made an enormous difference.

thropy was the duty of a gentleman; and sport, as young Meyer learned, was not only vastly more interesting and exciting than floating foreign loans, it made one a hero with the British populace, while finance did the reverse.

Ш

As emblematic of the new order as the toning up of the firm was the spreading out of the younger Rothschilds

He rode to hounds not so much for pleasure as because a gentleman must. His dinners in London and his weekend parties at Gunnersbury were as splendid as those of his younger brother; but it was a splendor tempered with dignity as became the head of a great House and an eminent family.

That was all very fine; but Lionel was conscious of duties and a mission in life. That colossus at New Court must be governed and must be reconciled at once with the spirit of the new age as well as with the doings of his relatives on the Continent, those amazing survivors of

Moreover, he was a Jew. Nathan had been content to attend services on the Sabbath and on the High Holidays, to pay his temple dues, and observe the traditional rites and practices. More than likely he would put down his successors as something not far removed from renegades. Nevertheless Lionel and Sir Anthony were, for all their French chefs and their compromises with the dietary laws,

devoted to the race and the faith. For the greater part of their lives they were the presidents of their respective synagogues, and the Jewish community of London regarded them as their natural leaders. They erected hospitals, they headed charities, they gave generously of their time and money for Jewish education. In the international field Lionel, as the head of the House, worked indefatigably to improve the status of his people abroad. He backed his maternal uncle, Sir Moses Montefiore, in the latter's efforts on behalf of the Jews in Russia and Poland; and when the Congress of Berlin, after the Russo-Turkish war, met to readjust the jangled balance of power in Europe, it was Lionel's letter to the assembled potentates that, more than any single factor, forced the emerging kingdom of Rumania to promise a civilized solution of its Jewish question.

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Undoubtedly, the most notable event in Lionel's career was an outgrowth of his deep interest in the status of his race. English Jewry in general and the Rothschild family in particular had, it is true, little to complain of. Compared with their brethren on the Continent, and more especially with those of them who dwelt in the Eastern parts of it, their position was enviable. They enjoyed economic equality with Christians, socially they were restricted only by income and personal fitness, even politically the British Constitution protected them. Yet one distinction remained—a survival from the ages of prejudice, which set Jews apart as citizens of the second class. No professing Jew could sit in either house of Parlia-

ment. Catholics, non-conformists and infidels were all represented. There was, in fact, no explicit law against the Jews either; only the oath of office was so worded as to exclude them in practice. It concluded with the words "on the true faith of a Christian." Reform politicians had repeatedly sought to change the formula, but so long as the Tories were in power all such endeavors were fore-doomed to failure. In 1847 Lionel Rothschild began his long, spectacular fight to end the discrimination. His determination to do so was brought about, curiously enough, through the influence of a man who was himself both a Tory member of the House of Commons and an apostate to the Mosaic faith.

Benjamin Disraeli had for many years past been Lionel's most intimate friend. The two men, so different in their backgrounds, their temperaments and their fortunes, had nevertheless many interests in common. "Dizzy," loaded down with debts, dandified, dreaming of literary eminence and the Premiership, converted to the Established creed by the whim of a queer parent, was irresistibly drawn toward the great capitalist. When he came to write his Novel "Coningsby" he took Lionel as the model for Sidonia, the ideal young public man. As far as he was concerned, his abandonment of the synagogue had not altered the blood in his body or the heritage of his soul. Certainly it had not by one jot diminished his deep concern over the welfare of the Jewish people. Why, but for a fortuitous incident in his boyhood, he might himself have been kept out of Parliament and his ambition nipped at the start! It was stupid and unfair and dangerous for the nation's own interests to exclude an entire group of useful and intelligent citizens on no other ground than that they

differed from the rest of the population about the hereafter. Some day when he became Prime Minister he would change all that. But then the thought came to him, why wait till then? Lionel Rothschild was the man to take up the cudgels against the musty prejudice, and at once. With his wealth, his personal qualities, his powerful connections and his family's long record of patriotic service, he was the natural standard bearer for the cause and no opposition could withstand his leadership.

٧

A less spectacular but equally significant result of Lionel's intimacy with Disraeli followed later when the

cent interest, exactly twice the amount the shares brought him. Moreover, they demanded security, and thus it came about that the Khedive was separated from his dividend coupons for a period of no less than twenty-five years to come. He consoled himself for this loss with the thought that he was still going to come out ahead, since by another clause of the contract he was to receive fifteen per cent of all profits made by the Canal. Unhappily for him, however, the Company was not making any profits. It was, in fact, facing bankruptcy.

De Lesseps was desperate, but he still had a shot in his

De Lesseps's protest against the Commission's ruling reached London on the 12th of February, 1874. Nine days later the Gladstone Government was defeated and Disraeli became, for the second time, Her Majesty's Prime Minister. With characteristic energy he at once went to work and made a thorough study of the whole controversy. Having concluded that his predecessors in office had badly bungled matters and that control of Suez was of vital importance to England, he sought the help of his friend Lionel Rothschild to undo the mischief. The firm had already on its own initiative made several attempts to

obtain the Khedive's holdings; but owing to their conservative policy of having no dealings with irresponsible and financially incompetent princes, their connections in Cairo and Constantinople were nil, and they had failed. Lionel now explained to the Premier how things stood. Disraeli, however, was not thinking of the Khedive; he was for reopening the negotiations with De Lesseps of three years ago. The day following this conversation Lionel's brother, Nathaniel, crossed the Channel to Paris and got into communication with De Lesseps. It so happened that in the meanwhile France had paid—thanks to the coöperation of the Paris House of Rothschild—the last billion of her indemnity to Germany, and her foreign policy had in consequence materially stiffened. Lesseps therefore told Nathaniel that he most emphatically was not contemplating any sale. Why should he? His country was making the Canal a national issue, and Russia was backing France on the international commission, so that he was in a position to threaten the Khedive with putting his company under his government's protection.

The prospects for Britain were dubious in the extreme. Then suddenly help came from an unexpected quarter. On October 7, 1875, the government of Turkey went bankrupt. In view of Egypt's connection with the Porte, a financial panic speedily seized Alexandria, the consequence of which was to threaten the solvency of the Khedive. Interest on the Egyptian debt was due before the end of the calendar year. In these circumstances the finance minister bethought himself of his master's Canal shares, and he opened negotiations with two French syndicates. Nominally the stock was to be mortgaged, but the bankers took care to impose terms so usurious as to make

it practically certain that the Khedive would default on the payments and thus forfeit his interest in the Canal. Somehow the British government got wind of what was toward and dispatched a protest to Cairo, which produced an assurance that the sale of the securities was not being considered.

pounds. He could not guarantee that the House would make good, but if Lionel was willing to take the risk, he (Disraeli) would warmly appreciate the favor. The risk was not very grave, considering that the valuable stock was to be transferred into the hands of the banker. At any rate, Lionel did not hesitate. There was a two-and-a-half-per cent commission—a hundred thousand pounds—involved. The Khedive gave up not only his hundred and seventy-odd thousand ordinary shares but threw in also fifteen hundred founders' shares as well as his fifteen-per cent interest in the revenues of the Canal; and all this, together with the small batch of shares already held in England, gave the Queen the predominant voice in the enterprise. At least Disraeli told her that it was she who was the sole gainer. "It is just settled; you have it, Madam. Four millions sterling! and almost immediately. There was only one firm that could do it—Rothschilds. They behaved admirably; advanced the money at a low rate, and the entire interest of the Khedive is now yours, Madam."

V

Less than four years later Lionel died suddenly, and the governance of the London House of Rothschild passed to his eldest son. Even better educated than his father, Nathan (or Nathaniel) was almost exclusively a public man. From his uncle Anthony he had inherited the baronetcy, and his close friendship with the Prince of Wales, whom he had come to know at Cambridge, presently brought him a peerage. The daily morning procession at New Court continued; government loans, particularly with

Brazil and Chile, kept on coming to the House; but it was purely and simply inheritance. Already in the third generation, the descendants of Nathan began showing the tendency, which has since become general among the Rothschilds, of converting their banking houses into mere administrative offices for the investment of their capital. Society, art, politics and Jewish affairs absorbed Lord Nathan almost wholly, and his brothers, like their uncles before them, went in for sport and fashion.

Unmistakably, also, the bonds of family tradition began weakening in the second half of the century. While a majority of the first Nathan's grandchildren married Rothschilds, no fewer than four of them went for their mates beyond the limits not only of their own clan but of the race itself. The strayers from the fold are reputed, it is true, to have remained Jews in faith and have even continued to interest themselves in Jewish charities and public questions; but the same cannot be said of their descendants.

Among the present, the fourth, generation, both these manifestations have become stronger. One of the latter-day Rothschilds has gone to the length of giving up his very name. He has changed it to Pascal, and the street in Paris which bears that designation is named not after the French philosopher but after one of the scions of old Meyer of Frankfort. So also with the firm. Though St. Swithin's Lane continues to be something of a power in British finance, and though its investments in South American loans, in railroads, mines and industrial enterprises are enormous, the significance of the House lies purely in its command of huge capital and not in the least in its skill or enterprise. The initiative, the force, the bril-

liant originality, the fierce vitality of the days of the first Nathan have passed to younger and more determined men with other names who still have their reputations and their fortunes to make. In so far as Rothschilds in England can be said to have survived, it has done so wholly on the momentum, one could almost say on the inertia, of the past. And the London House is the least moribund of its name.

CHAPTER XVII

IAMES AND HIS HEIRS

Nothing like the July Monarchy had ever been known in the whole predatory history of French royalty. For eighteen years big business was supreme. It governed with

JAMES VON ROTHSCHILD Squeamish people, at home and abroad, were scandalized by the spectacle—or made a note of it with sardonic humor. Metternich, the high-minded puritan, saw the disgraceful alliance between monarch and plutocrat as the inevitable result of democracy. It caused him to shake his head with pained resignation. "The House of Rothschild," he said, "plays a much bigger rôle in France than any foreign government, with the possible exception of England. There are of course reasons for it, which to me naturally appear neither good nor morally gratifying: Money is the great motive force in France, and corruption—which is in practice the most important factor in our modern system of representative government—is quite openly reckoned with." But he took comfort in the thought that in Austria at least filthy lucre was scorned by all right-thinking men. "Among us the traffic in this commodity finds but few friends."

Heine, on the other hand, who dined in the Rue Laffitte often and had ample opportunity to observe what was going on, reveled in the delicious situation. He declined to grieve over it at any rate; or possibly, like the Barber of Seville, he laughed to hold the tears back. "A few hundred years ago," he wrote, "the king would quite simply have pulled Monsieur Rothschild's teeth out by way of inducing him to consent to a loan. Ah well, the naïve ethic of the middle ages has happily been carried downstream by the Revolution, and now Rothschild the baron and Knight of the Order of Isabella can calmly go for a walk in the Tuileries whenever he is so disposed, without fearing that the hard-pressed monarch will touch a single one of his teeth."

What gave him particular joy, however, was to sit in a quiet corner at the counting house and watch the daily procession of hopeful speculators doing homage. "Best I like to call on him at his office in the bank, where as a philosopher I can look on at the people—not merely God's chosen, but those of all races—kneeling and abasing themselves before him. Such a doubling and contortioning of backbones as you would hardly expect acrobats to achieve! Some I have seen who on catching a glimpse of the great baron are seized with a nervous twitching as if they had unawares stepped on an electric cable. Others have but to approach the door to succumb to a tremor of awe, such as Moses must have felt when he suddenly realized on Mount Horeb that he was standing on holy ground. . . . This inner office is in truth a remarkable place. . . . It impresses one with the insignificance of man and the greatness of the Lord. For money is the god of our age and Rothschild is his prophet."

Another German-Jewish writer was less amused. Ludwig Boerne had known the Rothschild boys in Frankfort before their days of glory. It was after him and not after them that the city fathers later named the metamorphosed Judengasse. In spite of common origin, however—or it may have been because of it—Boerne took little pride in the magnificence that had come to his fellow-townsmen. Gifted with a sardonic pen, he rarely missed an occasion for lampooning their activities. As early as 1832 he reported to his paper: "Louis-Philippe, if he is still king next year, will have himself crowned—not, however, in the church of St. Remi at Rheims but in Paris in Notre Dame de la Bourse and Rothschild will officiate as arch-bishop."

Π

The company launched the enterprise with a capital stock issue of one hundred and fifty millions, divided into three hundred thousand shares nominally worth five hundred francs each. According to the recalcitrant journal one-tenth of the securities were distributed freely and gratis among the membership of the chambers and the press, in all seven and one-half millions' worth, to each

according to his merit and the weight of his support. The National itself was not slighted; it duly received its proportionate parcel; only, so it boasted, it preferred the distinction of a clear conscience and the pleasure of enlightening the world. The materialists, on the other hand, had nothing to complain of. With nearly the entire press behind him, James now proceeded to make the shares worth having. By a series of alternate bulling and bearing operations they gradually rose from 500 to nearly 850. Repeatedly he unloaded his holdings so as to depress prices and secure the outstanding parcels. In the end he emerged as the majority stockholder. He retained the presidency of the road till his death, and the property continues in the hands of his descendants to this day.

The line was opened with appropriate ceremonies at Amiens on June 15, 1846, and Monsieur Rothschild was hailed by representatives of the crown and the chambers as a public benefactor. Not many weeks later the public rejoicings were overshadowed by a deplorable accident in which a score or so of travelers were killed and many more injured. A terrific storm broke about the public benefactor's head, who was now denounced as a monster sacrificing human flesh to the golden calf. Old resentments, hatreds jealousies, long pent-up, took advantage of the occasion to vent themselves in violent tirades. A flood of pamphlets poured forth from the press, with echoes of the Vienness polemists from whom poor Salomon had suffered so long. A disappointed journalist who had been overlooked in the stock distribution of the year before unearthed old Hormayr's venomous phrase and addressed James pseudonymously as "Rothschild I, King of the Jews." The doggered artists did their share. Ancient canards about the unaris-

tocratic antecedents and the early performances of the family, and the malodorous origin of its fortune, were revived and spread before an eager public. The uproar mortified James and made him nervous. This sort of thing was something quite new in his experience, and he was at a loss how to handle it. He appealed to his newspaper and literary friends to help him, and a pamphlet entitled "The Reply of Rothschild I to Satan the Last" was hastily gotten out, in the evident hope that it would end the discussion. But it had, of course, the opposite effect; the scurrilous broadsides swelled in volume and in intensity. Then James redoubled his endeavors on behalf of the poor and outdid himself in good works; whereupon his adversaries warned the public that the cheap bread issuing from the Rothschild bakeries was made of adulterated flour mixed with poison, and called upon the authorities to stop its distribution. There seemed to be no limit to the malice of the wicked.

But James soon found something vastly more disturbing to occupy him. Within little more than a year after the accident on the Nord railroad, signs of the most alarming variety began to appear everywhere in the country. Republicanism, which was believed exorcised forever, suddenly raised its menacing head once more. The apparently solid edifice of monarchy creaked, swayed and displayed symptoms of breaking up. On the second of February it fell in a heap. The Citizen King, scorned, discredited and abandoned by his supporters, fled the country in terror of his life. For a little time James refused to recognize the gravity of the situation, certain that the fury would spend itself, or that some savior would arise to divert it into reasonable channels. It was not long, however, before he realized that this was not 1830. When a mob descended upon

his suburban château at Suresnes, pillaged it and only by a miracle was prevented from setting it on fire, and when the following day his eldest son Meyer Alphonse was seized by the Republican Guard, ordered into a uniform and with a musket on his shoulder detailed to stand sentinel on the ramparts, James reluctantly came to the conclusion that this time it was Revolution in real earnest.

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being the case, the nation could just as well act as its own contractor. Therefore the amount to be borrowed, the price at which the securities were to be floated, and the commissions of the agents and brokers, must be fixed by the state beforehand. The bankers could participate to whatever extent they desired, each house according to its ability, but all on the same footing. The vicious innovation, originating in France, presently gained converts among all the governments of Europe. A curtain descended upon the brilliant scene in which Rothschild's had for so long played a leading rôle.

Nor did it lift again when the Second Republic, after a brief and agitated existence lasting barely three years, turned into the Second Empire. Louis Napoleon was a totally different breed from Louis Philippe. A free-lance and a playboy prior to 1848, flying from one fantastic adventure after another, half the time an exile or a prisoner, he had been scarcely more than a name in France. James had thus had no opportunity to form any sort of ties with him, even if the notion had ever occurred to him that this obscure heir of a buried tradition would some day wear the crown of France. But there he was lording it in the Tuileries. And James, indelibly tarred with the Louis Philippe brush, found himself out in the cold.

What made this depressing state of affairs all the harder to bear was that the imperial court, by no means unfriendly to men of money—not even to Jewish ones—had thrown its favor to the rising young firm of the brothers Péreire, and Emil Péreire was a product and a whilom protégé of Rothschild's. It was enough to make one lose faith in humanity. Heine, it seemed, had spoken truer than he knew. "This remarkable man," he said of James, "has

the rare gift of discovering men with extraordinary capacities and attaching them to himself . . . in contrast to his colleagues who prefer to surround themselves with nonentities." Yes, but the difficulty was that he was too good at it. Péreire was only one instance of the danger of encouraging excessively clever men: there were others, as will be seen presently. Péreire at least did not betray his protector's confidence. He learned what he could from him about the usefulness of friends at court, and then went ahead to apply the instruction. Young, alert, ambitious, and enjoying the friendship of influential people in the new régime, he had early made it his business to gain the confidence of the emperor. Within a few months of the coup d'état he had contrived to secure a charter from Napoleon III for the erection of a new kind of financial institution. It was called the Crédit Mobilier, and was the first bank in France organized on a joint-stock basis.

Then he went energetically toward his goal, which was nothing less than to supplant his former employer. There ensued a violent and bitter struggle, with no quarter given or taken. For a time the odds weighed heavily on the side of the challenger. Péreire pushed his influence into the provinces, and in a remarkably short time he had the nucleus of a powerful syndicate all his own. When Russia began building her network of railways, it was he who snatched off the concession, though James brought to bear all the pressure of his own and his nephew Lionel's prestige. Presently he carried the war into Austria and came within an ace of annexing the domain of Salomon's heirs. For fifteen years the furious contest raged. In the end, it is true, Péreire was beaten, but the victory cost the Rothschilds more than it was worth.

At first no particular notice was taken of the man's extended absence. When, however, pay-day came round,

and a queue of employees lined up in front of the company's wicket without anyone appearing to hand them their wages, the officials suddenly recalled that Carpentier had not been seen for some little time. It became necessary to notify the president; for Carpentier had taken with him the keys of the safes, and James alone had duplicates. But when the safes were opened, they were found to be empty. An indeterminate quantity of cash, as well as mass of records, had been removed. James was not long in coming to the conclusion as to what had happened; but his first order was characteristic: beyond a bare statement that a robbery had occurred, all details were to be withheld from the public. There was the effect on the company's stock to be thought of. The French press readily acquiesced to hush up the affair. The foreign correspondents, however, were less obliging; and it is due to them that something like the real magnitude of the crime became known.

Carpentier, it developed, had had accomplices—one Grellet, a young man "of very good family," in addition to a number of clerks in the company's employ. In cash alone the sum abstracted amounted to six million francs. So much the directors were, after considerable questioning, induced to admit. That, however, was a small item of the total. Counting in the shares, the entire loss was estimated at the immense figure of "between thirty and thirty-two millions." The thieves had planned and executed the job with a skill and cunning worthy of the booty. Stock certificates deposited with the company being kept in packets of one thousand, the gang withdrew from each parcel two or three hundred shares, tied up the remainder and replaced them in their containers. In this way they had succeeded in carrying on their operations for a long time, without

discovery. Six months before their disappearance they had bought a steamer in England for about two million francs, and some time later they acquired a house in New York. Early in September they decided they had enough. Thereupon Carpentier, having obtained his leave of absence, proceeded to Liverpool, where the boat was anchored, had her got ready, and steamed out to keep tryst with his companions. The president and directors were so put out by the faithlessness of their trusted subordinates that they offered to spend ten millions for the capture of Carpentier. But he had got such a good head-start that he was never caught.

IV

For its part the Nord Railroad survived the incident, and James continued to preside over its destinies to the day of his death. Had he been a mere king of France, such a display of bad judgment might have cost him his throne; but stockholders are more forgiving. Nevertheless, the disappointment over Carpentier and the weary struggle with Péreire did their part toward hastening his end. He died the year after the crash of the Crédit Mobilier. The Grand Rabbi of France, the Chief Rabbi of Paris, the head of the Jewish charities, and one or two officials of the Railroad, made moving speeches at the grave in the Père Lachaise cemetery; all the leading newspapers of the capital printed long editorials on his extraordinary career, his generosity to the poor and his devotion to the best interests of the country. A notable procession of diplomats and members of parliament followed the bier, and among the mourners

were several hundred uniformed employes of the railway company. In deference to Jewish tradition, no military escort was provided by the government, though the deceased, as a commander of the Legion of Honor, was entitled to it. He was survived by his wife, a daughter and four sons. Three of the sons, Alphonse Meyer, Gustave and Edmond, took over the direction of their father's affairs.

sistance in carrying out the firm's guarantee that the exchanges should be maintained.

Even the terrible siege was somehow endured. Most Parisians were so hungry that they killed rats for food; but though proper edibles were costly and hard to get, people with the necessary price need not starve. It was the unspeakable mobs within the walls that almost made life unbearable. The Communards, like their brethren of 'forty-eight, rioted, seized wealthy men's homes, and under threat of violence, forced their owners to stand guard on the ramparts. Happily, the fury was short-lived. The decent and orderly elements of the city presently asserted themselves, and the subversive movement was drowned in blood.

With the establishment of the Third Republic James's heirs breathed freely again. The old system of loans, which had made their father the real power in the government as well as in the commercial life of the country, never returned, it is true; nor did the young men possess either the single-minded concentration of purpose or the healthy detachment from local concerns and local opinion, to bend parliament to their will, as their father had done in the matter of the Nord Railroad. No amount of parental solicitude to endow them with an international outlook could quite contrive to neutralize the influences of environment; born and reared and educated in France, they belonged. With all their intermarriages within the family and their complex ties abroad, they could not help thinking and feeling as Frenchmen. Like their cousins in England, also, they were conscious of a deterrent responsibility and dignity which, while it sprang from the past, conflicted with the spirit and methods of the past.

the Paris Rothschilds, and the Oriental autocracy became the "cordial" ally of the Republic.

enlightened the world about the methods whereby the allied monsters of Judaism and Free-Masonry despoil honest but rather futile Catholics of their wealth.

The long-drawn out struggle had just come to an end when Alphonse died at the age of 76. Though his two brothers Gustave and Edmond, who had all along been associated with him in the firm, survived, they were too old to take over the direction of its affairs; and the succession fell to their sons—Robert Philippe (Gustave) and

James and Maurice (Edmond). Their administration has been notable for a progressive contraction of the family's interests. In 1911 they took a spectacular step in the liquidation process by selling the Bnito Petroleum Company to the Royal Dutch-Shell combine. While in London St. Swithin's Lane is to this day an institution, the French House is nothing more than an office through which the various members handle their investments and their charitable endeavors.

CHAPTER XVIII

TWILIGHT

Metternich saw his laborious system crash to earth, and fled, a terrified mummy in his night-clothes, with the howling mob clamoring for his head; the emperor of Austria laid down his crown and put it on again; but all the while Salomon carried on, watchful but unperturbed. All the props and buttresses of his House trembled and gave way, but its foundations held firm. The death of Gentz, indeed, removed an associate whose services he only now fully appreciated. "He was a friend," he wrote regretfully to James, "whose like I shall not surely ever meet again. He cost me something frightful; you have no idea. He would just simply write down on a scrap of paper what he required, and the amount would be handed to him without further ado. Yet now he is gone I can see how valuable he was to us. Gladly would I give three times as much if I could but have him back." He did not get him back, alas! and so Salomon was obliged to collaborate with other men who, if they were neither as discreet nor as useful, were less expensive.

Times changed, and he adapted himself to them with astonishing ease. State financing struck out into unwonted paths; competitors of a new and formidable species arose; railroads came, and industrial expansion, and mining; he made the best of a difficult period. His zest for toil con-

As in France, Austria began with a policy of state rail-road construction. The difficulty was to finance the undertakings. When the plans for the Nordbahn came up for consideration, it was found that, the best resolutions not-withstanding, the bankers would have to be appealed to. The political pattern of the empire (and, individuals apart, the moral tone, too) was very different from that in Louis

On the other hand, what is still left of the Rothschild power and prestige in present-day Austria consists in the main of the Oesterreichische Kredit-'Anstalt, an institution founded by Salomon in the 'forties of last century. The success of the joint-stock banks abroad, and especially of the Crédit Mobilier in Paris, gave the Austrian authorities the idea of organizing the capital forces of their own dominions in like manner and thus weaken the stranglehold of the House of Rothschild upon the national finances and the economic life of the country. In this latter hope, as

All in all, then, Salomon was getting on well enough, in spite of his great age (he was over seventy), the changed times and even the loss of Gentz. And yet he was discontented. His brothers, or their heirs, were citizens of the places in which they lived, and great landed proprietors. He was neither. All his power and influence had not sufficed to remove the disabilities of the Jews in Austria. He himself was a foreigner in the country, and only his status as a citizen of Frankfort made it possible for him to enjoy such civil liberties as he had. Indigenous Jews were

n

But the great disappointment of his life was Anselm, his only son and the heir of his firm and fortune. The boy did not seem to be a Rothschild at all. He was extravagant, a high liver, fond of show, he got into scrapes, he was wild,

But really Salomon might have spared himself many a gray hair and many a sleepless night; for, after all, his successor proved himself worthy of the traditions of the family. He was fifty-two, to be sure, at his accession, and doubtless the long wait for his patrimony and the varied training he had received from his uncles had served to sober him; but he seems to have had the makings of a Rothschild from the start. The very year after his father's death he paralleled Salomon's railroad coup by taking over from the state the "construction" of the Südbahn, and made a better thing of it than his father had made of the Nordbahn. So successful, indeed, was this venture that presently he became a specialist in this type of financing, and engaged in extensive railroad operations in Italy. His very prodigality was an asset. Known from boyhood as a blood and a spendthrift, he easily gained entry to social circles in which his predecessor had been barely tolerated. While Salomon had been obliged to manœuvre endlessly for a mere honorary citizenship, Anselm the gay and irresponsible lightly stepped into the Imperial House of Lords, an unprecedented distinction for a man whose coreligionists had not the right to marry or to change their address without the special consent of the police.

Yet it is not to be supposed that Anselm had it easy. For all that he was standing, as it were, on his parent's shoulders, getting on in the 1860's and '70's was very markedly a more arduous business than it had been in the '20's and up to the middle of the century. It was not so much that an inherited fortune and a university training tended to paralyze initiative—Anselm was not suffering from those advantages as much as his cousin Lionel—nor was he irked by Victorian scruples. It was that times were not the same. The sheer glamour of the Rothschilds had produced a crop of determined aspirants for a like destiny. Thus, for instance, there arose a veritable plague of joint-stock banks

It was not the last time that the heirs of Salomon were to play the part of destiny. Henceforth, however, they are fighting a defensive battle. Anselm died the next year, and

Thereafter the Vienna House relapsed into the splendid innocuousness which had come over London, and after Albert's death in 1911 even the fortune of his descendants underwent a painful contraction. This and the suicide of one of Albert's sons and the diminished vitality of the present generation as a whole has caused eugenical people to speak of degeneration and to lay the cause of it to inbreeding. Be the biological case what it might, the fact is indisputable that of the three remaining branches of the family the Austrian is the feeblest. Its preponderance vanished decades ago, and—as is credibly reported—its losses during the late war have been so immense as to destroy its significance even in the capital market.

m

For only three of the establishments erected by the sons of Meyer are still standing. Naples and Frankfort barely survived their heads of the first generation.

The last to open, Naples was also the first to close. So long as Karl was alive and Italy remained an agglomeration of petty states and foreign dependencies, affairs went along satisfactorily enough. The glamour of London, Paris and Vienna never came to it. It shone chiefly in reflected glory. Yet Karl lived and died a happier man than any of his brothers. Gentler than they, mediocre, simple-minded, he did not fall a prey to that consuming ambition which gnawed at the vitals of Nathan and James. With his clever and beautiful wife by his side, he was furthermore spared the snubs which made all their success turn to gall. Adelaide was from the start a brilliant success in Naples society. For Italy knew nothing of anti-Semitism.

The progress of the Naples House was, by comparison with that of its fellows in the North, singularly undramatic. Karl ended as he began—a runner-up for his more

IV

Exactly forty years more elapsed before the parent-House at Frankfort, too, disappeared. It has been moribund, however, for a long time, and its final liquidation was scarcely more than an official act. Amschel, like Karl, was (in Gentz's phrase) one of the weaker Rothschilds. Had it not been for his brothers in London, Paris and Vienna, the firm which he conducted would surely not have achieved anything more than a local importance. Even as it was, its affairs were curiously limited. In his capacity as the head of his own concern, Amschel occupied himself for the most part with money-lending to petty German principalities and impoverished nobles. The great and spectacular operations with which the name of his family became synonymous were neither conceived nor executed in Frankfort. Even in Germany itself, ranking states like Prussia addressed themselves directly to London when they needed loans, and when Nathan died the leadership reverted not to the oldest but to the youngest of his brothers.

Yet so long as Amschel lived the rôle of the paternal house, while subordinate, was far from insignificant. A plain, unassuming, mediocre man, quite devoid of the extraordinary gifts of Nathan and James, Amschel none the less had qualities that fitted him to fill a useful place in the family organization. His very simplicity was an asset; he did not chafe at the contradiction of being nominally the head of the House and in practice the agent of his younger and more brilliant brothers. Geographically his position was strategic: Frankfort not only lay on the trade route between Paris and Vienna, it was the leading security market in the Northern sector of the Continent and thus the natural distributing point for Germany West of the Danube and the small countries contiguous to it. Every great operation originating in London, Paris, Vienna,

reached the investors in those markets through Amschel's hands; and the Frankfort bourse, as the outlet of the Rothschild world consortium, attained an importance it had never had before.

It was this contact of Amschel with the Frankfort Diet which led to his acquaintance with Bismarck, then merely Prussia's delegate to the Confederation. Characteristically, their first meeting was a clash. Amschel proposed that the naval loan be guaranteed by the Federal's bank deposits in his keeping. Prussia, supported by several of the smaller states, protested strenuously. Speaking in the Diet, Bismarck declared it was an insult to ask for guarantees at all, that the Rothschild plan would in effect oblige the Confederation to pay interest on its own money, and that unless a more equitable offer were made Prussia would move for the withdrawal of the funds altogether. Upon this Amschel stepped down; and once their differences were composed, the future Chancellor showed that he could be generous as well as pugnacious. At his instance the king of Prussia conferred upon Amschel the title of Royal Court Banker. Personally, it would seem, the hard, unyielding Junker was much attracted to the aged and somewhat pathetic son of the Ghetto; or perhaps he was sorry for him.

"A man of small stature," he wrote later, "slight, silverhaired, the oldest of his generation; but a poor man in his palace. Childless, a widower, robbed by his subordinates, badly treated by his Frenchified and Anglicized nephews and nieces, who inherit his treasures and return him neither thanks nor affection."

Toward the family generally Bismarck was less sympathetic. "I have known many members of this House," he said. "The most striking thing about them is their chasing after gold. This is due to the fact that they all want to leave to each of their children as much as they have themselves inherited; which is, of course, absurd."

Amschel was the third Rothschild to die in the fateful year 1855; and just as Garibaldi and Cavour had through their work in Italy undermined the Naples branch, so Bis-

So the antiquated House dragged out its last days amid the lengthening shadows of a city which, like itself, had outlived its glory. Meyer Karl died in 1887. For fourteen years more his brother kept up appearances, but there was no vitality left in the ancient shell. The Houses in Vienna, Paris, London, no longer sent daily couriers to Frankfort. It was not so much that the stream of affairs had cut a new channel; decline had set in all along the route. Upon "Baron Willy's" death in 1901 the family council resolved to lop off the decayed branch. Fifty years earlier such a

^* Of late years a son-in-law of the Baroness Mathilde, Herr Maximilian Gold-schmidt, better known as Max Goldschmidt-Rothschild, piously turned the clock back by reviving the Frankfort House as a branch of his Berlin banking finds Since his death both places have been under the direction of a Madame Frahnburger, his niece.

CHAPTER XIX

RETROSPECT

know—all the factors that went into the making of the House of Rothschild. This much only may be said with certainty: its founders, or at least three of them, were extraordinary men who happened along at a period in the world's history which was peculiarly susceptible to their endeavors. They themselves had not the remotest inking of the broader causes of their success, as Nathan's naive gropings on the subject make sufficiently plain. Originally small merchants, then blockade runners and general war speculators, they had gained a fortune and much valuable experience during the years of their apprenticeship. Then, with the close of the Napoleonic era, came their great opportunity and their epic rise. For that struggle had been something more than a series of wars; it had been, in effect, a European Revolution. When it began Europe, and especially the Continent of the Rhine, was still living under a patriarchal ne. By 1815, when it was over

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It was at this stage that the Rothschilds first lent an

efficient hand. Fresh from their hard training in Wellington's campaigns on the Peninsula and in France, keen, energetic and supremely self-confident, they had besides, the unique advantage of their numbers and their geographical distribution. With Nathan in London and the rest of them mobilized for service wherever the contingencies demanded, they functioned like a kind of natural syndicate. Without ever having heard the word, they had by pure accident set up the first clearing house. Their long and varied experience in trade, in contraband, in bullion shipping, and their complex interests on both sides of the Channel, had led them to stumble on what may appear to us as the obvious enough idea of remitting funds from one country to another without the actual movement of coin. It was at the time a revolutionary innovation; and coupled with Nathan's influence in London, it enabled them to perform services for the Continental Allies which no one else could perform, and in the process to make contacts for times to come.

But it was in the period next ensuing that their spectacular spurt forward came. The fighting over, Europe must set her house in order. Politically, to be sure, what with Metternich and his cronies in the saddle, the new order was roundly snubbed. The Bourbons were restored, the Revolution was declared a mistake, and East of the Rhine monarchs whom Napoleon had sent packing returned home from exile to rule virtuously or extravagantly, as their temperaments dictated and as if nothing had happened. But the economic hard facts could not be cold-shouldered so cavalierly. Not only must the damage of the quarter-century junket be repaired; the future must be faced; and to do either or both of these things,

money, unheard-of quantities of money, were needed. Economically it mattered little whether one faced backward and harped on legitimacy, or forward and acknowledged that the patriarchal régime had been hopelessly superseded by the nation. The days of subsidies were gone; the era of peace-time national armies had arrived. To pay for this expensive establishment necessitated a complete reorientation in ways and means. And all the while there was the heritage of the past to liquidate. The veterans must be paid off and seen to their homes. Hosts of widows and orphans must be provided for. Devastated regions, ruined industries, disrupted trade, must be rehabilitated. And before anything else could be done, it was imperative that the mass of unsecured paper currency be withdrawn from circulation and the vast accumulation of floating debts be funded. The whole complex of problems, that is to say, when closely examined, reduced itself to one basic problem: how to reorganize the national economy in such a way as to uplift the credit of the state and obtain the required wherewithal.

In finding a solution the Rothschilds were aided as all along, by circumstances. For it so happened that England, the world's leading capital market, had emerged from the war with her prestige enormously enhanced. Throughout the preceding quarter of a century, Consols, depressed and fluctuating, had been a favorite security of speculators both native and foreign. With the return of peace they had become stabilized and unprofitable; and the consequence was that the Continental investor turned his attention to fields nearer home, where he was presently joined by his British colleague. Nathan and his brothers were the first to perceive this drift, and they did everything they could

to speed it up and to exploit it. Until their time Continental government bonds were virtually unknown on the London exchange. By persuading the borrowers to accept a low flotation figure and pay a temptingly high rate of interest and redeem coupons in sterling, they made Prussian, Austrian, Neapolitan and even Papal issues nearly as popular in England as the British "Stocks" themselves.

Undoubtedly the posture of events played it into their hands. But the same can be said of Napoleon and of every other significant figure in history. Genius, after all, is the capacity to make the most of opportunity. At least, that is true of genius in affairs. Other men of their time—Baring in England, Ouvrard in France, and David Parish in Austria—came before them and enjoyed opportunities that were closed to them. As individuals it may even be doubted whether the Rothschilds were a match for those three. It was as a group that they were unexcelled and unbeatable. Their pooled resources had, as early as the Congress of Aix in 1818, made them, according to Gentz, the wealthiest concern in the world. Working harmoniously together, letting no stranger gain a foothold of responsibility in their oganization, their respective abilities dovetailing like the organs of some super-body, they formed a unique corporation.

Their very limitations served to advance them. They were foreigners in all but one of the lands in which they resided, and in none did they ever acquire so much as a respectable command of the language, let alone a citizen's feeling for the traditions and aspirations of the country. But it was precisely that detachment, that aloofness from temporary and partisan concerns, that very colorlessness,

which gave them the international character they needed, enabled them to work with successive governments and even (as in France) with constantly changing régimes, and to put their resources at the disposal of a Continent made up of mutually warring states. And wherever they were and whoever was in power, it was rarely they were at a loss as to who was the man or the group likely to be useful. Considering their lowly origin, their uncouthness, their ignorance, surely the most remarkable of their faculties was their uncanny knowledge of men. From Buderus to Metternich, from the Manchester weavers to Herries, from the police prefect at Dunkirk to Villèle and Louis Philippe, they almost always knew who was who and how to make him their own.

Coarse-grained, unscrupulous, determined to win at all costs, they resorted freely to corruption. Utterly innocent of the processes that work in history, even in so far as they concerned their own amazing success, they were keenly alive to the significance of individuals in the inner councils of government; and appreciating the value of direct and reliable information, they bought men as they bought stocks. But in justice to them it should be borne in mind that they did not invent bribery. They invented nothing and they created nothing, not even corruption. In this as in everything else they were content to work with the instruments which they found ready to their hand. After more than a century of dazzling eminence, the House of Rothschild has, excepting only the Northern Railway of France, left not a single industry, not a single significant or original landmark which identifies their name with the great period in which they flourished.

П

They bequeathed their fortunes and the luster of their names to their heirs. But as might have been expected they could not hand on to them their singular gifts, and still less the exceptional times and the curious combination of accidents by which they had become great. The Rothschild family has, therefore, for many years past, been going the way of all human institutions.

The causes of the decline are as varied and complex as were those of the rise. In Italy and in Germany they have been political; elsewhere they have been economic and social; but all along the line the essential factor has been a change in the mental bent, the outlook and the interests of the succeeding generations. With the disappearance of Naples and Frankfort as capitals the five original Houses were reduced to three; the improvement of the methods of state financing in Europe after the Revolution of 1848 and the introduction of joint-stock banking a little later seriously weakened the power of the rest; but in the long run it is the human element far more than external circumstance that is making for disintegration.

The incentives of the fathers do not spur the descendants. Inherited wealth, education, refinement, a secure social position, are softening influences. They breed scruples, morbid ideas of responsibility, squeamishness about methods, over-sensitiveness toward public opinion. Still more destructive of the will are roots in the soil; and the later Rothschilds let patriotic and party considerations interfere with business interests. Their international outlook becomes clouded, and their very relations to their cousins beyond the frontiers are, in times of stress, troubled with

doubts and questionings. All the sturdy directnesses of the founders are turned into hampering "advantages" with the heirs. And that leading principle, the unity and exclusive control of the family, becomes a dynastic superstition infinitely more rigid than it is with royal houses; since monarchs, limited by constitutions, are at least obliged to admit new blood to the state and yield their powers and privileges to ministers and generals.

So the luster of the House of Rothschild is sadly dimmed, and but for the survival of its fortune the latter-day banking corporations would hardly think it worth consulting. But, speaking humanly, can there really be any rational talk of a decline? Suppose Nathan and his brothers had been soldiers or poets or statesmen. Would anyone consider that there had been degeneration because their descendants had taken to painting or exploration? The parallel is exact. There is not the slightest sign that the sturdy Rothschild stock is dying out, or that healthyminded and even highly talented men are lacking in the family. Only the talents and the tastes are of a different kind from what they used to be. An astonishing quota of Rothschilds in this and the preceding generation are to be found in the ranks of science (insects, snakes), sport, philanthropy, art, book, snuff-box, even flea-collecting, and in other fields of human endeavor. Who is there so wise as to say that such interests do not require as high an order of physical stamina, intelligence and moral character as that necessary for floating international bond-issue?