The House of Rothschild: Money's Prophets, 1798-1848

Niall Ferguson, instead of his grand sweeping analyses of historical trends, instead aims for a grand sweeping analysis of how a merchant family from the German Jewish ghettoes became one of the richest and most powerful and secretive institutions in the world.

He does a remarkable job, analyzing correspondence and uncovering an enormous amount of detail, from the art patronage of the family to the collapse of the Spanish bond markets. Some might complain that there is a bit too much detail, but I am the kind of person who savors it.

The world of economics and banking and empire is unquestionably savage. Yet Ferguson portrays this misunderstood group in a very positive light. Some will find this controversial, naturally. I was very show more interested in this contrarian perspective, and hope to read the next half soon enough. show less

Myth-breaker
Ferguson's book is really stunning, especially when viewed against the family's mythology. In Frederic Morton's The Rothschilds, for instance, we read that Nathan Rothschild, founder of the London branch, made his fortune by selling down British consols and then scooping then up at fire-sale prices. This was reportedly initiated when Nathan learned of Napoleon's final defeat at Waterloo. But in The House of Rothschild, we learn that Waterloo posed more difficulties than opportunities for the family. This book is definitely a must-buy for those interested in financial history.

(Posted in Amazon.com, July 25, 1999)

3322. The House of Rothschild Money's Prophets 1798-1848, by Niall Ferguson (read June 28, 2000) This is the first half of the author's history of the Rothschilds. There is much interesting in the book, but not being very knowledgeable in international finance, and the author not really explaining it very well, some of the reading was chore-like. Overall, I was disappointed, and I doubt I'll read volume 2.

This review is really a review of the Blinkist summary of the book and, inevitably, a summary will miss detail and context. Still it does allow me to sample a much larger range of books that I’ve been able heretofore. I’ve extracted some snippets that I found interesting or useful, as follows;.
It all began with Mayer Amschel Rothschild (1744-1812), father of the famous Rothschild brothers. However, as a Jew in Frankfurt, Mayer Amschel didn’t have the easiest start to his career.....Jews in Frankfurt faced persistent, systematic discrimination and intensely anti-Jewish attitudes. Virtually every aspect of the lives of Frankfurt Jews was affected by this anti-Semitism. Jews were confined to a ghetto, a single narrow street called show more the Judengasse (Jews’ Lane),....Jews were barred from entering major public gathering places like parks, inns, coffee houses and the town’s promenades.
Mayer Amschel’s journey into banking began after he’d established himself as Frankfurt’s leading antique dealer. With the capital he accumulated through buying and selling these goods, Mayer Amschel began extending credit to his growing network of suppliers and customers. Of Mayer Amschel Rothschild’s many clients, the most important was William IX, Hereditary Prince, Landgrave and Elector (Kurfürst) of the former German state of Hesse-Kassel. According to the Rothschild myth, it was this relationship with William IX that formed the real foundation of the Rothschild fortune.....When Napoleon declared his intention to end the reign of the House of Hesse-Kassel, William had little choice but to flee....Rothschild provided only one service to William, which proved crucial to his family’s success: the management of William’s English investments.
It was the service of managing William’s English investments that helped Nathan (one of the sons) make the transition from a merchant to a London banker.....By the time Nathan established himself in London, the family’s Frankfurt bank had effectively passed from Mayer Amschel to his five sons following his death. Mayer Amschel had become seriously ill on September 16, 1812, and died only three days later. In his testament, Mayer Amschel demanded strict unity among his sons in continuing the banking business. Seldom has a father’s last testament been carried out more conscientiously–or profitably. ....Participation in the family business was passed to Mayer Amschel’s male descendants, meaning Rothschild women were effectively excluded from the core of the business.
By the 1830s, the Rothschilds had amassed about £4 million in wealth–more than ten times that of their biggest competitor, Baring Brothers & Co.
In 1814, Nathan Rothschild was officially entrusted with financing Britain’s war against France to defeat Napoleon’s troops....France, along with the “Holy Alliance” formed by Austria, Prussia and Russia, emerged from the Napoleonic Wars (1803-1815) in dire financial straits–and the Rothschilds were willing to help.....The diverse intergovernmental payments the Rothschilds made during this period all had one thing in common: they each produced profits in two distinct ways.
• The first way was in the form of commissions of up to eight percent.
• The second, less obvious, way involved exploiting the often rapid and significant fluctuations in exchange rates. By this point, the Rothschild brothers had established permanent bases in Frankfurt, London, Paris, Vienna and Naples, making it possible for them to buy a currency at a discount in one market and sell it at a profit in another.
Another critical ingredient to the Rothschilds’ success was Nathan’s emergence as the leader among the brothers. Technically, the five brothers had equal stake and power within the business, and profits were divided equally among them; but Nathan’s English office generated by far the most capital....Nathan, as his brother Salomon half-joked, was the “commanding general” of their operation. The others were merely his “marshals.”
At the turn of the nineteenth century, it was a matter of course that European politicians would accept favours from bankers. Investment tips and outright bribes would be rewarded with things like economically relevant inside information or favouritism when a loan was needed.
Specifically, the Rothschilds extended credit to influential figures in order to foster “friendships.” For example, the family made individual loans to French King Louis XVIII, Prussian diplomat Wilhelm von Humboldt, members of the English royal family and so on.
the most prominent example of such “friendship” was the Rothschilds’ relationship with Austrian statesman Klemens von Metternich......Metternich rewarded these insider tips by informing Salomon about Austrian political machinations. Information about Austria’s war preparations or the collection of taxes was of great value to the Rothschilds,
Sometimes, however, a more subtle approach was needed. In these cases, the Rothschilds would give presents, such as the jewelled caskets given to the Elector of Hesse-Kassel, to those with whom they wished to forge an alliance.
Much of the myth making and hostility that the Rothschilds endured was not based on actual facts, but rather on simple economic rivalry coupled with anti-Jewish sentiment.
“From the very earliest days, the Rothschilds appreciated the importance of proximity to politicians . . . and politicians soon came to realize the importance of proximity to the Rothschilds . . .”...The Rothschilds’ wealth and influence afforded them a privileged social status–this despite belonging to a class that had been historically disadvantaged, even in the Rothschilds’ time.
The Rothschild brothers urged their friends in politics to advocate for the Jewish cause.
Though the Rothschilds didn’t reserve their political action for wealthy Jews alone, the relationship between the Rothschilds and the larger, poorer Jewish community has long been the subject of myths and the butt of jokes. At least one cartoonist at the time suggested that, having made their fortune, the Rothschilds were indifferent to the plight of their “poorer co-religionists.”....But the brothers were indeed involved in philanthropy. For example, in 1825 they donated money to build a new hospital.
The Rothschilds’ success lay in their unique communications network and the cooperation between the five houses....There are at least two factors that we can identify as critical to their incredible prosperity. The first is the development of the brothers’ communications network......Nathan, for example, would pay premiums to the captains of postal ships for express delivery....When discretion was of the essence, the Rothschilds had no choice but to employ trusted private couriers. Until the mid-1830s, when the railway and the telegraph ushered in a new era of communications, the Rothschild courier service was better than any other existing form of communication.....But the principal reason for the Rothschilds’ success lay in the cooperation between the five Rothschild houses.
When taken as a whole, the five Rothschild houses in London, Frankfurt, Paris, Vienna and Naples comprised the largest bank in the world. This multinational partnership
allowed the Rothschilds to disperse their financial influence throughout five of Europe’s major financial centers.....To reinforce their sense of collective identity, the brothers agreed that each house would inform the others of the transactions it carried out on a weekly basis.
In June 1836,
Nathan Rothschild was dying. His death shifted the constellation of power in the Rothschild family......But who would become the new leader of the Rothschild family business? Usually, people assume that Nathan's role was filled by the youngest of the five brothers, James.
But it’s far from clear that James ever wielded power equal to Nathan’s. In reality, the relatively equal distribution of power among the five houses meant that no single brother was really in a position to give marching orders to the others, as Nathan had once done.
Nathan Rothschild’s death also had much broader consequences
For the Rothschilds, an important source of enjoyment–and prestige–was patronage of the arts. .....It was the art created in seventeenth-century Holland that the family was most drawn to. In 1840, for example, James Rothschild purchased works by Rembrandt, Peter Paul Rubens and Anthony van Dyck.....Dutch painters were mostly secular. Interestingly, however, the Rothschilds also acquired works displaying explicitly Christian iconography.
With very few exceptions, the only contemporary paintings the family owned were the portraits of themselves that they'd commissioned.
The Rothschilds likewise patronized some of the premier composers and performers of the nineteenth century. The most obvious reason for this is that good music was an absolute necessity for a successful evening ball.
Important writers of the time also received the Rothschilds’ favor. Two of the best-documented cases were Heinrich Heine and Honoré Balzac, both of whom were closely associated with James Rothschild in the 1830s and ‘40s.
The Rothschilds’ investments in railways made them targets for the social revolutions of 1848......The mid-1830s marked a shift in the Rothschilds’ financial focus toward industrial finance. In particular, the Rothschilds invested heavily in the emerging business of railway construction......Because the Rothschilds were such a dominant force in railway development, a growing number of journalists began expressing hostility toward what they regarded as a corrupt, private monopoly......Soon, the public prominence that the Rothschilds had won with their railways made them targets for the social revolutions of 1848, which resulted in a series of political and social upheavals throughout Europe.
The Rothschilds, a wealthy and influential family that gained public prominence through their endeavours in the railway system, came to personify this inequality.
Financially, the Rothschilds faced serious losses due to the wealth they held in the form of government securities. Government securities were falling dramatically in value.
The Rothschilds suffered heavy losses in 1848, teetering on the verge of bankruptcy. But because the revolution never reached Britain, the London house was able to bail out the other four, thus ensuring the survival of the Rothschild family legacy.
The key message in this book: The Rothschild family ranked among the richest and most influential families in nineteenth-century Europe. Exceptional in their international scope and the way they conducted their financial business, the meteoric rise of the Rothschild family has long been the subject of various myths, all of which seldom reflect the truth.
Normally, I make comments upon individual points but even the summary seems to hang together remarkably well so I will refrain. I just would have liked a bit more information about how they managed to hang together as a family, What was the magic ingredient when similar wealthy families fragment within a generation or two? The Rothschild name is still synonymous with wealth. Four stars from me. show less

Rothschild family (Subject)

Interesante, por en partes largo detallado y tedioso, pasara tiempo antes de que lea la segunda parte. Para aquellos que lo lean por algun tip económico, no dice como hacerse millonario