Those words were spoken in 1828 by the Radical MP Thomas Dunscombe. The man he was referring to was Nathan Mayer Rothschild, founder of the London branch of what was, for most of the nineteenth century, the biggest bank in the world. It was the bond market that made the Rothschild family rich - rich enough to build forty-one stately homes all over Europe, among them Waddesdon Manor in Buckinghamshire, which has been restored in all its gilded glory by the 4th Lord Rothschild, Nathan's great-great-great-grandson. His illustrious forebear, according to Lord Rothschild, was 'short, fat, obsessive, extremely clever, wholly focused . . . I can't imagine he would have been a very pleasant person to have dealings with. 'His cousin Evelyn de Rothschild takes a similar view. 'I think he was very ambitious,' he says, contemplating Nathan Rothschild's portrait in the boardroom at the offices of N. M. Rothschild in London's St Swithin's Lane, 'and I think he was very determined. I don't think he suffered fools lightly.'Master of unbounded wealth, he boasts that he is the arbiter of peace and war, and that the credit of nations depends upon his nod; his correspondents are innumerable; his couriers outrun those of sovereign princes, and absolute sovereigns; ministers of state are in his pay. Paramount in the cabinets of continental Europe, he aspires to the domination of our own.
Nathan Mayer Rothschild
Though the Rothschilds were compulsive correspondents, relatively few of Nathan's letters to his brothers have survived. There is one page, however, that clearly conveys the kind of man he was. Written, like all their letters, in almost indecipherable Judendeutsch (German transliterated into Hebrew characters), it epitomizes what might be called his Jewish work ethic and his impatience with his less mercurial brothers:
I am writing to you giving my opinion, as it is my damned duty to write to you . . . I am reading through your letters not just once but maybe a hundred times. You can well imagine that yourself. After dinner I usually have nothing to do. I do not read books, I do not play cards, I do not go to the theatre, my only pleasure is my business and in this way I read Amschel's, Salomon's, James's and Carl's letters . . . As far as Carl's letter [about buying a bigger house in Frankfurt] is concerned . . . all this is a lot of nonsense because as long as we have good business and are rich everybody will flatter us and those who have no interest in obtaining revenues through us begrudge us for it all. Our Salomon is too good and agreeable to anything and anybody and if a parasite whispers something into his ear he thinks that all human beings are noble minded[;] the truth is that all they are after is their own interest.Small wonder his brothers called Nathan 'the general in chief. 'All you ever write', complained Salomon wearily in 1815 , 'is pay this, pay that, send this, send that.' It was this phenomenal drive, allied to innate financial genius, that propelled Nathan from the obscurity of the Frankfurt Judengasse to mastery of the London bond market. Once again, however, the opportunity for financial innovation was provided by war.
On the morning of 18 June 1815, 67,000 British, Dutch and German troops under the Duke of Wellington's command looked out across the fields of Waterloo, not far from Brussels, towards an almost equal number of French troops commanded by the French Emperor, Napoleon Bonaparte. The Battle of Waterloo was the culmination of more than two decades of intermittent conflict between Britain and France. But it was more than a battle between two armies. It was also a contest between rival financial systems: one, the French, which under Napoleon had come to be based on plunder (the taxation of the conquered); the other, the
British, based on debt.
Never had so many bonds been issued to finance a military conflict. Between 1793 and 1815 the British national debt increased by a factor of three, to £745 million, more than double the annual output of the UK economy. But this increase in the supply of bonds had weighed heavily on the London market. Since February 1792, the price of a typical £100 3 per cent consol had fallen from £96 to below £60 on the eve of Waterloo, at one time (in 1797) sinking below £50. These were trying times for the likes of Mrs Anna Hawes.
According to a long-standing legend, the Rothschild family owed the first millions of their fortune to Nathan's successful speculation about the effect of the outcome of the battle on the price of British bonds. In some versions of the story, Nathan witnessed the battle himself, risked a Channel storm to reach London ahead of the official news of Wellington's victory and, by buying bonds ahead of a huge surge in prices, pocketed between £20 and £135 million. It was a legend the Nazis later did their best to embroider. In 1940 Joseph Goebbels approved the release of Die Rothschilds, which depicts an oleaginous Nathan bribing a French general to ensure the Duke of Wellington's victory, and then deliberately misreporting the outcome in London in order to precipitate panic selling of British bonds, which he then snaps up at bargain-basement prices. Yet the reality was altogether different. Far from making money from Wellington's victory, the Rothschilds were very nearly ruined by it. Their fortune was made not because of Waterloo, but despite it.
After a series of miscued interventions, British troops had been fighting against Napoleon on the Continent since August 1808, when the future Duke of Wellington, then Lieutenant-General Sir Arthur Wellesley, led an expeditionary force to Portugal, invaded by the French the previous year. For the better part of the next six years, there would be a recurrent need to get men and matériel to the Iberian Peninsula. Selling bonds to the public had certainly raised plenty of cash for the British government, but banknotes were of little use on distant battlefields. To provision the troops and pay Britain's allies against France, Wellington needed a currency that was universally acceptable. The challenge was to transform the money raised on the bond market into gold coins, and to get them to where they were needed. Sending gold guineas from London to Lisbon was expensive and hazardous in time of war. But when the Portuguese merchants declined to accept the bills of exchange that Wellington proffered, there seemed little alternative but to ship cash.
The son of a moderately successful Frankfurt antique dealer and bill broker, Nathan Rothschild had arrived in England only in 1799 and had spent most of the next ten years in the newly industrializing North of England, purchasing textiles and shipping them back to Germany. He did not go into the banking business in London until 1811 . Why, then, did the British government turn to him in its hour of financial need? The answer is that Nathan had acquired valuable experience as a smuggler of gold to the Continent, in breach of the blockade that Napoleon had imposed on trade between England and Europe. (Admittedly, it was a breach the French authorities tended to wink at, in the simplistic mercantilist belief that outflows of gold from England must tend to weaken the British war effort.) In January 1814, the Chancellor of the Exchequer authorized the Commissary-in-Chief, John Charles Herries, to 'employ that gentleman [Nathan] in the most secret and confidential manner to collect in Germany, France and Holland the largest quantity of French gold and silver coins, not exceeding in value £600,000, which he may be able to procure within two months from the present time.' These were then to be delivered to British vessels at the Dutch port of Helvoetsluys and sent on to Wellington, who had by now crossed the Pyrenees into France. It was an immense operation, which depended on the brothers' ability to tap their cross- hannel credit network and to manage large-scale bullion transfers. They executed their commission so well that Wellington was soon writing to express his gratitude for the 'ample . . . supplies of money'. As Herries put it: 'Rothschild of this place has executed the various services entrusted to him in this line admirably well, and though a Jew [sic], we place a good deal of confidence in him.' By May 1814 Nathan had advanced nearly £1.2 million to the government, double the amount envisaged in his original instructions.
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