Rothschild

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Mayer Amschel Rothschild, the founder of the Rothschild banking dynasty, in an lithograph c. 1830.

ART Collection/Alamy

Rothschild, the most famous of all European banking dynasties, which for some 200 years had considerable economic influence in Europe. The house was founded by Mayer Amschel Rothschild (b. February 23, 1744, Frankfurt am Main—d. September 19, 1812, Frankfurt) and his five sons, Amschel Mayer (b. June 12, 1773, Frankfurt—d. December 6, 1855, Frankfurt), Salomon Mayer (b. September 9, 1774—d. July 27, 1855, Vienna), Nathan Mayer (b. September 16, 1777—d. July 28, 1836, Frankfurt), Karl Mayer (b. April 24, 1788—d. March 10, 1855, Naples), and Jakob, or James, Mayer (b. May 15, 1792—d. November 15, 1868, Paris). Starting out in a Frankfurt banking house, Mayer and his sons became international bankers, establishing branches in London, Paris, Vienna, and Naples by the 1820s. In addition to banking and finance, the Rothschild businesses have encompassed mining, energy, real estate, and winemaking. From the early 19th century the family has been known for its considerable charitable activities, particularly in the arts and education.

Mayer’s family name, Rothschild, derived from the red (rot) shield on the house where his ancestors had once lived. Intended for the rabbinate, Mayer studied briefly, but his parents’ early death forced him into an apprenticeship in a banking house. Soon after joining the court of William IX, landgrave of Hesse-Kassel, Mayer set the pattern that his family was to follow so successfully—to do business with reigning houses by preference and to father as many sons as possible who could take care of the family’s many business affairs abroad.

Starting as dealers in luxury items and traders in coins and commercial papers, Mayer and his sons eventually became bankers to whom the French Revolutionary and Napoleonic wars of 1792–1815 became a business opportunity. Mayer and his eldest son, Amschel, supervised the growing business from Frankfurt, while Nathan established a branch in London in 1804, Jakob settled in Paris in 1811, and Salomon and Karl opened offices in Vienna and Naples, respectively, in the 1820s. The wars, for the Rothschilds, meant loans to warring princes; smuggling as well as legal trading in key products such as wheat, cotton, colonial produce, and arms. The transfer of international payments between the British Isles and the Continent, which Napoleon unsuccessfully attempted to close to British trade, were also key to the Rothschilds’ business.

Peace transformed the growing Rothschild banking group, which continued its international business dealings but became more and more an agent in government securities (Prussian or English, French or Neapolitan), in insurance-company stocks, and in shares of industrial companies. In this manner the family successfully adapted to the Industrial Revolution and participated in economic growth throughout Europe with their railway, coal, ironworking, and metallurgical investments. The banking group continued to expand after the 1850s and, in particular, achieved an important position in the world trade of oil and nonferrous metals. But its previous oligopolistic position was seriously threatened by new joint-stock banks and commercial, or deposit, banks both in England and in France as well as in the German states. By the last quarter of the 19th century, the Rothschild group was no longer the first banking consortium. Other groups, in Europe and in the United States, had become stronger, richer, and more enterprising.

Yet the two guidelines laid down by Mayer Amschel for the Rothschild business operations—to conduct all transactions jointly and never to aim for excessive profits—helped, arguably, to compensate for the risks inherent in handing down a business to future generations. Amschel, Nathan, Jakob, Salomon, and Karl—the founders of the Rothschild consortium—showed themselves variously suited to the work they inherited from their father: Nathan and Jakob stood out among their brothers by the force of their personalities—particularly Nathan, who was often characterized by his contemporaries as hard, deliberately boorish, and sarcastic. Jakob, based in Paris, was considered his brother’s equal in all these things. Mayer Amschel’s five sons, in turn, passed the business to their descendants and other family members: Alphonse (1827–1905), who was Jakob’s son, brought his own son, Édouard (1868–1949), into the banking group. Édouard’s son (Guy [1909–2007]) and his cousins (Alain [1910–82] and Elie [1917–2007]) were considered particularly successful at seizing opportunities and adapting in business as well as in politics. Successive generations of the Rothschild family have been similarly active in international finance and politics.

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Lionel Nathan de Rothschild.

Encyclopædia Britannica, Inc.

The second generation of the Rothschild family, which became firmly established in European banking from its bases in several European capitals, had an influence over the national economy and politics of their countries that, sometimes, gave rise to untrue conspiracy theories driven in part by antisemitism. Alphonse, for example, as the head of the international banking syndicate that in 1871 and 1872 placed the two great French loans known as liberation loans after France’s defeat by Prussia, could boast that his influence had maintained the chief of the French government, Adolphe Thiers, in power. At the same time, in 1875, Lionel, in London (where he had been a member of the House of Commons since 1858), was able to give on a few hours notice the £4 million that allowed the British government to become the principal stockholder in the Suez Canal Company.

There were frequent marriages between Rothschild cousins, and members of the Rothschild family often married into other Jewish families. The Rothschilds faced antisemitism, and family members living in Vienna and Paris during the Nazi period of the 1930s and ’40s were confronted with hatred and violence that culminated in the Holocaust.

The Rothschilds have been much honored. Mayer’s five sons were made barons of the Austrian Empire, a Rothschild was the first Jew to enter the British Parliament, and another was the first to be elevated to the British peerage. Members of the British and French families—the only ones still engaged in banking after the seizure of the Austrian house by the Nazis—distinguished themselves as scientists and often as philanthropists. Baron Philippe de Rothschild (1902–88) became a premier winemaker, of the vineyard Mouton-Rothschild. In 2003–08 the British and French houses were merged, marking the reunification of the Rothschild family business for the first time in nearly two centuries.

Jules Ayer, A Century of Finance: 1804 to 1904 (1905), a brief, official work; Niall Ferguson, The House of Rothschild, 2 vol. (1998–99), a comprehensive history; Frederick Morton, The Rothschilds: A Family Portrait (1962, reprinted 1991), a brief, lively history.