Nathan Mayer Rothschild

Nathan Mayer Rothschild
Born 16 September 1777
Frankfurt-am-Main
Died 28 July 1836 (aged 58)
Frankfurt-am-Main
Known for Rothschild banking family of England
Religion Judaism
Children Charlotte Rothschild
Lionel de Rothschild
Sir Anthony de Rothschild, 1st Baronet
Nathaniel de Rothschild
Hannah Mayer Rothschild
Mayer Amschel de Rothschild
Louise Rothschild
Parent(s) Mayer Amschel Rothschild

Nathan Mayer, Freiherr von Rothschild (16 September 1777 – 28 July 1836), known as Nathan Mayer Rothschild, was a German banker, businessman and financier. He was one of five sons of the second generation of the Rothschild banking dynasty. He was born in Frankfurt am Main, the fourth child of Mayer Amschel Rothschild (1744–1812) and Gutle Schnapper (1753–1849).

Life

In 1798, at the age of 21, he settled in Manchester and established a business in textile trading and finance, later moving to London, England and making a fortune in trading bills of exchange through a banking enterprise begun in 1805.

In 1816, his two elder brothers were granted noble status (Freiherr or Baron) by the Emperor of Austria. They were now permitted to prefix the Rothschild name with von or de. Their device of four arrows became five when in 1818 Nathan too was elevated, although he chose not to use his aristocratic title Freiherr von Rothschild.

Family

On 22 October 1806 in London he married Hannah Barent-Cohen (1783–1850), daughter of Levy Barent Cohen (1747–1808) and wife Lydia Diamantschleifer and paternal granddaughter of Barent Cohen and wife, whose other son Salomon David Barent-Cohen (d. 1807) married Sara Brandes, great-grandparents of Karl Marx.[1] Their children were:

  1. Charlotte Rothschild (1807–1859) married 1826 Anselm von Rothschild (1803–1874) Vienna
  2. Lionel Nathan (1808–1879) married 1836 Charlotte von Rothschild (1819–1884) Naples
  3. Anthony Nathan (1810–1876) married 1840 Louise Montefiore (1821–1910)
  4. Nathaniel (1812–1870) married 1842 Charlotte de Rothschild (1825–1899) Paris
  5. Hannah Mayer (1815–1864) married 1839 Hon. Henry FitzRoy (1807–1859)
  6. Mayer Amschel (1818–1874) married 1850 Juliana Cohen (1831–1877)
  7. Louise (1820–1894) married 1842 Mayer Carl von Rothschild (1820–1886) Frankfurt

Business career

He operated first as a textile merchant in Manchester, then from 1804 he began to deal on the London stock exchange in financial instruments such as foreign bills and government securities.

From 1809 Rothschild began to deal in gold bullion, and developed this as a cornerstone of his business. From 1811 on, in negotiation with Commissary-General John Charles Herries, he undertook to transfer money to pay Wellington's troops, on campaign in Portugal and Spain against Napoleon, and later to make subsidy payments to British allies when these organized new troops after Napoleon's disastrous Russian campaign.

His four brothers helped co-ordinate activities across the continent, and the family developed a network of agents, shippers and couriers to transport gold—and information—across Europe. This private intelligence service enabled Nathan to receive in London the news of Wellington's victory at the Battle of Waterloo a full day ahead of the government's official messengers.[2] He is famously quoted as saying "Buy when there’s blood in the streets", though the original quote is believed to have appended "even if the blood is your own". The quote refers to his contrarian investing strategy that he is well known for adhering to as to buy assets when the financial markets are crashing and panicking investors are selling. The quote has a tremendous impact today on value investing and modern businesspeople and investors alike when buying assets in down markets when investment opportunities arise.[3][4][5]

In 1818 he arranged a 5 million pound loan to the Prussian government and the issuing of bonds for government loans formed a mainstay of his bank’s business. He gained a position of such power in the City of London that by 1825–6 he was able to supply enough coin to the Bank of England to enable it to avert a liquidity crisis.

In 1824 he founded the Alliance Assurance Company (now Royal & SunAlliance) with Moses Montefiore.

In 1835 he secured a contract with the Spanish Government giving him the rights to the Almadén mines in southern Spain, effectively gaining a European mercury monopoly.[6]

Nathan Meyer Rothschild was known for his role in the abolition of the slave trade through his part-financing of the 20 million pound British government buyout of the plantation industry's slaves.[7] However in 2009 it was claimed that as part of banking dealings with a slave owner, Rothschild used slaves as collateral. The Rothschild bank denied the claims and said that Nathan Mayer Rothschild had been a prominent civil liberties campaigner with many like-minded associates and "against this background, these allegations appear inconsistent and misrepresent the ethos of the man and his business".[8]

He set up his London business, N. M. Rothschild and Sons at New Court in St Swithin's Lane, City of London, where it trades today. He also purchased a country house at Gunnersbury Park near Acton in western London.

Description

An anonymous contemporary described Nathan Rothschild at the London Stock Exchange as "he leaned against the 'Rothschild Pillar' ... hung his heavy hands into his pockets, and began to release silent, motionless, implacable cunning":[9]

"Eyes are usually called the windows of the soul. But in Rothschild's case 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 gleam of that which comes from without reflected in any direction. The whole puts you in mind of an empty skin, 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 inquisitive glance that you ever saw, and more inquisitive than you would ever have thought of, is drawn out of those fixed and leaden eyes, 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 just 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 this, 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. Last of all the figure itself vanishes, leaving you utterly at a loss".[10]

Death

By the time an infected abscess caused his death in 1836, his personal net worth amounted to 0.62% of British national income.[11] He had also secured the position of the Rothschilds as the preeminent investment bankers in Britain and Europe. His son, Lionel Nathan Rothschild (1808–1879), continued the family business in England.

Nathan Mayer Rothschild and his wife Hannah are buried in the Brady Street Ashkenazi Cemetery in Whitechapel.

Legend

In the 19th century a legend began which accuses him of having used his early knowledge of victory at the Battle of Waterloo to speculate on the stock exchange and make a vast fortune.[12]

Frederic Morton relates the story thus:[13]

To the Rothschilds, [England's] chief financial agents, Waterloo brought a many million pound scoop.
... a Rothschild agent ... jumped into a boat at Ostend ... Nathan Rothschild ... let his eye fly over the lead paragraphs. A moment later he was on his way to London (beating Wellington's envoy by many hours) to tell the government that Napoleon had been crushed: but his news was not believed, because the government had just heard of the English defeat at Quatre Bras. Then he proceeded to the Stock Exchange.
Another man in his position would have sunk his work into consols [bank annuities], already weak because of Quatre Bras. But this was Nathan Rothschild. He leaned against "his" pillar. He did not invest. He sold. He dumped consols.
...Consols dropped still more. "Rothschild knows," the whisper rippled through the 'Change. "Waterloo is lost."
Nathan kept on selling ... consols plummeted—until, a split second before it was too late, Nathan suddenly bought a giant parcel for a song. Moments afterwards the great news broke, to send consols soaring.

We cannot guess the number of hopes and savings wiped out by this engineered panic.

Research by the Rothschild family[14] and others[15] has shown that this legend originated in an anti-Semitic French pamphlet in 1846, was embellished by John Reeves in 1887 in The Rothschilds: the Financial Rulers of Nations and then repeated in other later popular accounts, such as that of Morton, and the 1934 American film directed by Alfred L. Werker, "The House of Rothschild." Many of the alleged facts stated are incorrect. For example, it has been shown that the size of the market in government bonds at the time would not have enabled a scenario producing a profit of anything near one million pounds.

In 1815, Rothschild made his famous statement: "I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man who controls the British money supply controls the British Empire, and I control the British money supply."[16]

Historian Niall Ferguson agrees that the Rothschilds' couriers did get to London first and alerted the family to Napoleon's defeat, but argues that since the family had been banking on a protracted military campaign, the losses arising from the disruption to their business more than offset any short-term gains in bonds after Waterloo. Rothschild capital did soar, but over a much longer period: Nathan's breakthrough had been prior to Waterloo, when he negotiated a deal to supply cash to Wellington's army. The family made huge profits over a number of years from this governmental financing by adopting a high-risk strategy involving exchange-rate transactions, bond-price speculations, and commissions.[17]

See also

Notes

  1. ↑ "Barent Cohen". GeneAll.net. Retrieved 2010-07-08.
  2. ↑ Gray, Victor; Aspey, Melanie (May 2006) [2004]. "Rothschild, Nathan Mayer (1777–1836)". Oxford Dictionary of National Biography (Online ed.). Oxford University Press. Retrieved 21 May 2007.
  3. ↑ Forbes Magazine: Buy When There's Blood In The Streets, 23 February 2009
  4. ↑ "'Buy When There's Blood In The Streets': How Contrarians Get It Right". Forbes. 5/25/2012. Retrieved 26 April 2015. Check date values in: |date= (help)
  5. ↑ "“Buy When There’s Blood in the Streets” and Other Lessons from Venture Capitalists Fred Wilson and Josh Kopelman". Wharton. Retrieved 26 April 2015.
  6. ↑ Rothschild (1912-01-01). "Bullion Department". Rothschildarchive.org. Retrieved 2010-07-08.
  7. ↑ "Hochschild, Adam "Bury the Chains: Prophets and Rebels in the Fight to Free an Empire's Slaves" Houghton Mifflin: New York, NY (2005). p.347". Worldcat.org. Retrieved 2010-07-08.
  8. ↑
  9. ↑ Morton, Frederic. (1962). The Rothschilds: A Family Portrait. London: Secker & Warburg. p69.
  10. ↑ Morton, Frederic. (1962). The Rothschilds: A Family Portrait. London: Secker & Warburg. pp69–70. [Morton does not cite the source of this quotation].
  11. ↑ Niall Ferguson, The Ascent of Money (2008), 88.
  12. ↑ Gray, Victor; Aspey, Melanie (May 2006) [2004]. "Rothschild, Nathan Mayer (1777–1836)". Oxford Dictionary of National Biography (Online ed.). Oxford University Press. Retrieved 21 May 2007. Contrary to stories emanating from an article about the family in a late nineteenth-century magazine with decidedly antisemitic undertones, Rothschild's first concern on this occasion was not the potential financial advantage on the market which the knowledge would have given him; he and his courier immediately took the news to the government.
  13. ↑ Morton, Frederic (1962). The Rothschilds: A Family Portrait. London: Secker & Warburg. pp. 53–54.
  14. ↑ Rothschild, Victor (1982). The Shadow of a Great Man. N.M.V. Rothschild London (New Court, St. Swithin's La.).
  15. ↑ Ferguson, Niall (1998). The World's Banker: The History of the House of Rothschild. London: Weidenfeld & Nicolson. ISBN 0-297-81539-3.
  16. ↑ The House of Rothschild (vol. 2) : The World's Banker: 1849-1999 by Niall Ferguson. Diane Publishing Co. (1999) ISBN 0-7567-5393-7
  17. ↑ The House of Rothschild, Volume 1: Money's Prophets, 1798–1848. Niall Ferguson (1999), New York: Penguin. ISBN 0-14-024084-5

References

External links