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Rothschild family

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Coat of arms of the Rothschild family

The Rothschild family (often referred to simply as the Rothschilds), is an international banking and finance dynasty of German Jewish origin that established operations across Europe, and was ennobled by the Austrian and British governments.

Origins

The family tree of the Rothschild banking families.

The family's rise to international prominence began with Mayer Amschel Rothschild (1744–1812). Born in the ghetto (called "Judengasse" or Jew Alley) of Frankfurt-am-Main, he developed a finance house and spread his empire by installing each of his five sons in European cities to conduct business. An essential part of Mayer Rothschild's strategy for future success was to keep control of their businesses in family hands, allowing them to maintain full discretion about the size of their wealth and their business achievements. Mayer Rothschild successfully kept the fortune in the family with carefully arranged marriages between closely related family members. His sons were:

The Rothschild coat of arms contains a clenched fist with five arrows symbolizing the five sons of Mayer Rothschild, a reference to Psalm 127. The family motto appears below the shield, in Latin, Concordia, Integritas, Industria, (Harmony, Integrity, Industry).[1] The German family name means "Red Shield".

Families by country:

British war effort and Napoleon

The basis for the Rothschild fortune was laid during the latter stages of the Napoleonic Wars. From 1813 to 1815, Nathan Mayer Rothschild in London was instrumental in the financing of the British war effort, handling the shipment of bullion to the Duke of Wellington's army in Portugal and Spain, as well as arranging the payment of British financial subsidies to their Continental allies. Through the commissions earned on these transactions, the Rothschild fortune grew enormously.

The 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]

Nathan Mayer Rothschild had set up his London business, N. M. Rothschild and Sons in 1811 at New Court in St Swithin's Lane, City of London, where it trades today. In 1818 he arranged a £5 million 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.

Elevated to the nobility

In 1816, four of the brothers were each ennobled by Austrian Emperor Francis I; Nathan was elevated in 1818. All of them were granted the Austrian title of baron or Freiherr on 29 September 1822. As such, some members of the family used "de" or "von" Rothschild to acknowledge the grant of nobility. In 1885, Nathan Mayer Rothschild II (1840–1915) of the London branch of the family, was granted the peerage title Baron Rothschild in the Peerage of the United Kingdom.

Rothschild family banking businesses pioneered international high finance during the industrialisation of Europe and were instrumental in supporting railway systems across the world and in complex government financing for projects such as the Suez Canal. Major businesses directly founded by Rothschild family capital include Alliance Assurance (1824) (now Royal & SunAlliance); Chemin de Fer du Nord (1845); Rio Tinto Group (1873); Société Le Nickel (1880) (now Eramet); and Imétal (1962) (now Imerys).

After amassing huge fortunes, the name Rothschild became synonymous with banking and great wealth, and the family was renowned for its art collecting, as well as for its philanthropy.

In 1901, with no male heir to take it on, the Frankfurt House closed its doors after more than a century in business. It was not until 1989 that they returned when N M Rothschild & Sons, the British investment arm, plus Bank Rothschild AG, the Swiss branch, set up a representative banking office in Frankfurt.

Zionism

The Rothschilds were supporters of the State of Israel, and Baron Edmond James de Rothschild was a patron of the first settlement in Palestine at Rishon-LeZion. In 1917 Walter Rothschild, 2nd Baron Rothschild was the addressee of the Balfour Declaration, which committed the British government to the establishment in Palestine of a national home for the Jewish people.

James A. de Rothschild financed the Knesset building as a gift to the State of Israel.

The Supreme Court of Israel was donated to Israel by Dorothy de Rothschild. [3] Outside the President's Chamber is displayed the letter Ms Rothschild wrote to Prime Minister Shimon Peres expressing her intention to donate a new building for the Supreme Court. [4]

French branches

There are two branches of the family connected to France. The first was son James Mayer de Rothschild (1792–1868), known as "James", who established de Rothschild Frères in Paris. Following the Napoleonic Wars, he played a major role in financing the construction of railroads and the mining business that helped make France an industrial power. James' sons Gustave de Rothschild and Alphonse James de Rothschild continued the banking tradition and were responsible for raising the money to pay the compensation demanded by the occupying Prussian army in the 1870s Franco-Prussian War. Ensuing generations of the Paris Rothschild family remained involved in the family business, becoming a major force in international investment banking. The Rothschilds have led the Thomson Financial League Tables in Investment Banking Merger and Acquisition deals in the UK, France and Italy. In the United States, their Investment Banking Restructuring group has landed such deals as United Airlines and Delphi. The onslaught of competition from publicly traded banking giants from the United States and the European Union, who came with enormous capital at their disposal, resulted in the 2003 merger of the privately owned Rothschild banking house in France with its British banking cousins to create a single umbrella holding company.

The second French branch was founded by Nathaniel de Rothschild (1812-1870). Born in London he was the fourth child of the founder of the British branch of the family, Nathan Mayer Rothschild (1777-1836). In 1850, Nathaniel Rothschild moved to Paris, ostensibly to work with his uncle, James Mayer Rothschild. However, in 1853 Nathaniel acquired Château Brane Mouton, a vineyard in Pauillac in the Gironde département. Nathaniel Rothschild renamed the estate, Château Mouton Rothschild and it would become one of the best known labels in the world. In 1868, Nathaniel's uncle, James Mayer de Rothschild acquired the neighboring Chateau Lafite vineyard.

The Paris business suffered a near death blow in 1982 when the Socialist government of François Mitterrand nationalized and renamed it Compagnie Européenne de Banque. Baron David de Rothschild, then 39, decided to stay and rebuild, creating a new entity Rothschild & Cie Banque with just three employees and $1 million in capital. Today, the Paris operation has 22 partners and accounts for a significant chunk of the global business.

Austrian branch

In Vienna, Salomon Mayer Rothschild established a bank in the 1820s and the family became admired and respected citizens. The Austrian Rothschilds were later elevated to the nobility by the Austrian emperor for their services. The crash of 1929 brought problems and Baron Louis von Rothschild attempted to shore up the Creditanstalt, Austria's largest bank, to prevent its collapse. Nevertheless, during World War II they had to surrender their bank to the Nazis and flee the country. Their Rothschild palaces were confiscated and plundered by the Nazis. Some of these family members sought sanctuary in the United States. In 1999 the government of Austria agreed to return to the Rothschild family some 250 art treasures looted by the Nazis and absorbed into state museums after the War.

Italian branch

The Unification of Italy in 1861 eventually brought about the closure of their Naples bank.

Modern business

In July 2003 a major reorganization of the Rothschild business structure took place when the London and Paris banks were united through a new master holding company, Concordia BV, under the chairmanship of David René de Rothschild. Under this banner, Rothschild et Cie Banque controls the banking businesses in France and continental Europe, while Rothschilds Continuation Holdings AG controls banking elsewhere, including N M Rothschild & Sons in London.[5] 20% of Rothschild Continuation Holdings AG was sold in 2005 to Jardine Strategic which is a subsidiary of Jardine, Matheson & Co. of Hong Kong.

N M Rothschild & Sons does most of its business as an M&A advisor. In 2006 it ranked second in UK M&A with deals totalling $104.9 billion.[6] In 2006 it recorded a pre-tax profit of £83.2 million with total assets of £5.5 billion.[7]

Another descendant of James, Edmond Adolphe de Rothschild (1926–1997) founded the LCF Rothschild Group, based in Geneva, which today extends to 15 countries across the world. The group's primary businesses include Banque Privée Edmond de Rothschild S.A., La Compagnie Benjamin de Rothschild S.A., and COGIFRANCE. Although this Group is primarily a financial entity, specialising in asset management and private banking, its activities also cover winemaking (with estates in Bordeaux, South Africa and Argentina), mixed farming, luxury hotels and yacht racing. The LCF Rothschild Group is currently presided over by Benjamin de Rothschild, Baron Edmond's son.

In 1980 Jacob Rothschild, 4th Baron Rothschild resigned from N M Rothschild & Sons and took independent control of Rothschild Investment Trust (now RIT Capital Partners, the UK's largest investment trust.) He went on to found J. Rothschild Assurance Group (now St James's Place Capital) with Sir Mark Weinberg in 1991.[8]

Prominent descendants of Mayer Amschel Rothschild

By marriage:

The story of the Rothschild family has been featured in a number of films. The 1934 Hollywood film titled The House of Rothschild, starring George Arliss and Loretta Young, recounted the life of Mayer Amschel Rothschild. Excerpts from this film were incorporated into the National Socialist (Nazi) propaganda film "The Eternal Jew" (Der ewige Jude) and another German film Die Rothschilds (also called Aktien auf Waterloo) was directed by Erich Waschneck in 1940. A Broadway musical entitled The Rothschilds, covering the history of the family up to 1818, was nominated for a Tony Award in 1971.

In France, Rothschild is still considered a synonym for extreme wealth, though such usage is now dated. The family also has lent its name to "le goût Rothschild," a suffocatingly glamorous style of living whose decorative elements include neo-Renaissance palaces, extravagant use of velvet and gilding, a sense of Victorian horror vacui, and masterworks of art. Le goût Rothschild has much influenced interior designers such as Robert Denning, Vincent Fourcade, and others.

The name Rothschild is still used as a synonym for extreme wealth in Israel. In the Hebrew language version of the song "If I Were a Rich Man", the title line goes 'lu ha'yiti Rothschild, literally if I were a Rothschild. Similarly the Yiddish version is ven ich bin a Rothschild, meaning the same thing.

See also

Notes

  1. ^ Concordia, Integritas, Industria - The Rothschilds - LCF Rothschild Group
  2. ^ Victor Gray and Melanie Aspey, "Rothschild, Nathan Mayer (1777–1836)", Oxford Dictionary of National Biography, Oxford University Press, Sept 2004; online edn, May 2006 accessed 21 May 2007.
  3. ^ New York Times - Obituary article for Dorothy de Rothschild | http://query.nytimes.com/gst/fullpage.html?res=940DE2DE153BF930A25751C1A96E948260
  4. ^ The Judicial Authority - Tour of Supreme Court - The Presidents Chamber | http://elyon1.court.gov.il/eng/siyur/lishka_nasi.html
  5. ^ Paris-Orléans
  6. ^ League tables
  7. ^ Annual Report of N M Rothschild & Sons Limited for the year ended 31 March 2006.
  8. ^ St. James's Place Capital, plc | International Directory of Company Histories | Find Articles at BNET.com

Further reading

  • Niall Ferguson: "The House of Rothschild: Money's Prophets, 1798-1848" (ISBN 0-14-024084-5)
  • Niall Ferguson: "The House of Rothschild: The World's Banker, 1849-1998" (ISBN 0-14-028662-4)
  • Frederic Morton: The Rothschilds: Portrait of a Dynasty (ISBN 1-56836-220-X)
  • Amos Elon: "Founder: A Portrait of the First Rothschild and His Time" 1996 (ISBN 0-670-86857-4)
  • Joseph Valynseele & Henri-Claude Mars, Le Sang des Rothschild, L’Intermédiaire des Chercheurs et Curieux, Paris, 2004 (ISBN 2-908003-22-8)
  • Derek A. Wilson: "Rothschild: A Story of Wealth and Power" (ISBN 023398870X)
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