The House of Rothschild (55 page)

This gives a good flavour not only of Ferdinand’s character but of the often ambiguous quality of the relationships between members of the family and members of the political elite.

Like Alfred and Ferdinand, Nathaniel devoted most of his energies to houses, art and his own delicate sensibilities. The Renaissance style
palais
he built in the Theresianumgasse was one of the great Rothschild town houses; according to one account, he ran out of money at an early stage and had to borrow a million gulden from his father. (This did not stop him later spending tens of thousands of gulden on imported roses from Naples.) Inside, it was almost entirely French in style (one of the reception rooms by the sculptor François-Antoine Zoegger was especially ornate) and the art collection was the familiar mix: paintings by Greuze, Reynolds, Rembrandt and Van Dyck and numerous articles of furniture associated with Marie-Antoinette: in short, “le gout Rothschild” epitomised. Like Alfred, Nathaniel had his own orchestra; like Ferdinand, he lavished attention on his gardens, especially the park and hothouses at Hohe Warte created for him in 1884 by Bauqué and Pio and Jean Girette.
²¹
And—predictably—Nathaniel was an excessively sensitive soul. A hypochondriac, he was especially prone to insomnia. Indeed, according to Hermann Goldschmidt, it was his search for a place conducive to sleep which led him to buy both the Reichenau and Enzesfeld estates, though he stayed only one night in the latter, leaving by the first train when he heard of the locality’s reputation for epidemics. When cruising in his 4 million gulden English-built yacht, he refused to sail too far from the coast for fear of drowning.

This is not to disparage the Rothschilds’ collective contribution to the arts in this period. As a trustee of the National Gallery and the Wallace Collection, Alfred put his connoisseur’s expertise to public use, just as Ferdinand bequeathed some of the more unusual pieces which he had inherited from his father’s
Schatzkammer
to the British Museum, along with some he himself had collected.
²²
Alphonse too made a substantial public contribution to the museums of the Third Republic. Elected a member of the Académie des beaux-arts in 1885, he not only built up an impressive private collection of mainly Dutch masters, but also donated around 2,000 works—including pieces by contemporary artists like Rodin—to 150 different museums. The point is that for Alfred, Ferdinand and Nathaniel the aesthetic had taken over from the ascetic. It was a transformation hinted at in Oscar Wilde’s short story “The Model Millionaire, a note of admiration,” published in 1887, which describes how an impoverished young man-about-town gives a sovereign to a miserable old beggar whose portrait an artist friend is painting. The “beggar” turns out to be a disguised “Baron Hausberg,” “one of the richest men in Europe... [who] could buy all London to-morrow without overdrawing his account ... has a house in every capital [and] dines off gold plate.” He is also the artist’s patron, having commissioned him “to paint him a beggar.” (Predictably, the Baron repays the young man’s generosity by providing him with the £10,000 he needs to marry his beloved.) Here a classic Rothschild anecdote is translated into the idiom of the
fin de siècle:
“the model millionaire” has become a benevolent artistic patron, far removed from the origin of his millions—even if it is a little hard imagining Alfred dressing up as a beggar, even for the sake of a practical joke.

The question nevertheless remains how far all these symptoms of “decadence” actually affected the performance of the Rothschilds as bankers. Anecdotal evidence suggests that they did. When the ambitious young Hamburg banker Max Warburg arrived to serve a part of his apprenticeship at New Court in the 1890s, he was firmly told by Alfred: “A gentleman is not to be found in the office before eleven and never stays beyond four.”
²³
According to a Rothschild employee who joined the bank after the First World War, Leo’s routine was to arrive at 11 a.m., go to lunch at 1.30 p.m. and return home at 5 p.m.; Alfred generally arrived at 2 p.m., lunched at 3.30-4 p.m. and spent much of the remainder of the afternoon sleeping on a sofa in the partners’ room. Although he worked a good deal harder, Natty too gave the impression of being a reluctant banker. Asked if he had a formula for financial success, Natty habitually replied, “Yes, by selling too soon”—an attitude which has sometimes been seen as indicative of excessive risk-aversion. He grumbled to Rosebery about having to remain at the office like “a solitary hermit” after the end of the London “season.” Competitors were scathing about New Court as they had never been before. Edward Baring commented that the Rothschilds had become “so unreasonable and lazy that it is difficult to ensure a business being properly carried through under their direction. They refuse to look into new things and their intelligence and capacity is not of a high order.” Ernest Cassel, one of the dynamic newcomers to the City in the 1890s, was even more dismissive: the brothers, he declared in 1901, were “absolutely useless & not remarkable for intelligence.”

To be sure, the London Rothschilds had an invaluable assistant in the “ever industrious” form of another young Hamburger, Carl Meyer, who became one of the confidential clerks in the 1880s. Meyer’s letters to his wife suggest that outside the partners’ room business at New Court continued to be conducted at a frenetic pace. “I have been working ever since this morning like a nigger,” he told her in a typical series of letters from the mid-1880s:

Meyer was a regular guest at the partners’ lunches not for the sake of his small talk but because these were intelligence-gathering exercises to which other bankers, brokers and civil servants were invited. Yet when he sought promotion to procurist in 1890 (asking for £6,000 a year, the right to sign for the firm and his own private office) he was turned down and his resignation was accepted in 1897. According to City gossip, the brothers felt he was getting “too big for his boots.” He left to work with Ernest Cassel.

This
de haut en bas
treatment of subordinates was endemic. In 1905 Carl Meyer heard that Alfred was “becoming more unbearable than ever to the staff and treats men of 30 years service like office boys.” Stockbrokers also chafed at such treatment. As Alfred Wagg of Helbert Wagg recalled, “an interview with Lord Rothschild had to be amazingly rapid... He came in, placed a watch on his desk, and intimated that the interview would last five minutes, or three, or even less.” On one occasion, Natty asked the broker Fred Cripps the price of Rio Tinto shares. Having heard the answer, he said: “You are wrong by a quarter of a point.” To this Cripps not unreasonably replied: “Why did you ask me if you already knew?” “There was,” he recalled, “an awful silence in the room. I was utterly crestfallen, and under cover of the stifled hush I rapidly retreated.” Alfred Wagg had a similar experience in 1912, when he went to inform Natty that his firm was to leave the stock exchange:

As we shall see, Fred Cripps was not wide of the mark when he commented on the quasi-royal quality of an “audience” with Natty: “One waited in an ante-room before being ushered into the presence, and then one filed through as though it were Buckingham Palace.” This kind of thing struck those on the receiving end as both anachronistic and out of proportion to the firm’s relative financial importance.

Similar charges of complacency have been levelled against the French house for the same period. In 1875 Henri Germain of the Credit Lyonnais remarked that Alphonse brought to business questions “a sort of dignity which was not conducive to success. He never puts himself out, he always waits for people to come and find him.” Palmade has argued that by this time the Rothschilds were “on the wane,” yielding their primacy in French economic life to industrialists like Schneider. A study published in 1914 observed that although the Rothschild name continued to figure in major loans issued on the French market, it was actually the deposit banks which now placed most of the new bonds. It retained its “moral” influence—especially where diplomatic factors were important—but the Paris house’s real financial power was allegedly declining.

There is evidence to support these views in the partners’ own correspondence: repeated complaints about competition from rivals, for example. “Others have become Millionaires,” grumbled Mayer Carl in 1869, “& ... the public laughs at our constant stupidity.” “The fact is,” he continued morosely the following year,

Nor was this merely a temporary feature of the
Grunderzeit.
In 1906, Natty inveighed—with more than a hint of envy—against his former pupil “Warburg at Hamburg who resembles the frog in the fable & is swollen up with vanity & the belief in his own power to control the European markets, & interest all big houses in any & every syndicate.” There were also occasional expressions of complacency. “I share your opinion, my dear Alfred,” wrote Alphonse in 1891, “not to become apprehensive of competition nor of threatening Finance Ministers. We should do only business which suits us and under conditions convenient to us.” “We are glad to go on in our old humdrum & jog trot way,” wrote Natty in 1906 (in a letter expressing criticism of the methods of the Credit Lyonnais), “& are quite satisfied ... No doubt Monsieur Germain was a very able administrator & wonderfully good at organisation; but we here were old fashioned enough to believe that the system on which he transacted his business was essentially vicious.”

Yet—as we shall see—it is not absolutely clear that the Rothschild houses
did
fare all that badly after 1878 in terms of profits and capital (figures for which were, of course, unavailable to contemporaries outside the partnership). In fact, the continuing effectiveness of key figures—in particular Natty, Alphonse and Albert—to some extent compensated for the feebleness of the likes of Alfred, Ferdinand and Nathaniel: To be sure, there were disagreements and even quarrels between the partners; but that was nothing new. If there was a problem it was that the world was no longer ideally suited to the activities of a multinational private bank with bases in London, Paris, Frankfurt and Vienna. Conflicts of interest between the various houses had always been a feature of the Rothschild system; but from the 1860s they became progressively more and more acute and ultimately ended in the disintegration of the partnership system in the early 1900s. Though personal factors played some part in this, it was primarily a consequence of economic and political events beyond their control: the segmentation of the European capital market, the political effects of the wars of 1859-71 and the reorientation of British and French foreign investment to extra-European markets.

The theory of the Rothschild system continued to be enunciated regularly. “Where all four Rothschild houses act in their own names,” declared Mayer Carl in 1862, “they truly need no associates.” The best response to increased competition, wrote Alphonse the following year, was “to tighten once again the ties which unite our houses and pull together all our forces with a common thread.” “We must stick together,” James declared in 1865, “but in order to do that each must go hand in hand with the other to be sure that there is no difference between the different parts of the business and that one house encourages the other and keeps it accurately informed about its business and neither one nor the other tries to draw everything to itself.” His will was perhaps the final expression of this philosophy of parternship by one who had imbibed it directly from Mayer Amschel; but it would be easy to cite a score of such affirmations of the old system in the years after his death. As late as 1895, the mantra was still being repeated. “Each house does what it considers best,” wrote Carl Meyer, “but on the other hand they know that the houses are all associated and for this reason no house would do a business which it knew would be against the interests of one of the other houses.”

Practice did not always conform to such confederal principles, however. The first obvious sign of fragmentation was Adolph’s apparently unilateral decision to withdraw from the partnership and close down the Naples house in 1863 on the ground that the Naples market had been “deprived of its importance.” This was an unprecedented event which shocked James and took months of negotiations to resolve. It was a sign of the new mood of suspicion that Adolph initially demanded three months to study the books of the various houses before accepting a definitive settlement, even threatening to open a new, independent bank if he did not get his way. He did. On September 22, 1863, he relinquished his partnership, withdrawing the sum of £1,593,777 as his share—more or less equivalent to the capital of the Naples house (£1,328,025) which was now wound up. However, his efforts to carry on business in Italy in a semi-detached role were evidently stymied by James, who now denounced him as “riff-raff” and a “great lump”; he wanted to tell him “to go to the devil,” he told his sons, “without doing him the honour of writing to him.” In particular, James was furious to hear that his nephew intended doing business in competition with the Paris house in the Turin market. Having abandoned his birthright, Adolph was now privately anathematised, though James was outwardly careful to conciliate his nephew lest he defect to the Credit Mobilier. In the end, Adolph avoided an outright breach by retiring from business altogether, selling the family residence in Naples and frittering away the remainder of his life on his collection of
objets d‘art
at Pregny.