A story of the Rothschild family

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EDITOR’S NOTE: An earlier version of this article cited an estimate of the combined Rothschild net worth at $ 350 billion. This estimate was from a source that did not meet Investopedia standards and we have therefore removed it. An estimate that the Rothschilds controlled over $ 2 trillion in assets was also under-sourced and removed.

The Rothschild family

The Rothschilds are an influential banking dynasty originating in Frankfurt. The family empire was created by Mayer Amschel Rothschild in the 18th century and rose to prominence under his five sons: Nathan Mayer, James Mayer, Salomon Mayer, Carl Mayer and Amschel Mayer. The Rothschilds were pioneers in the development of international finance, having established branches in London, Paris, Vienna and Naples, in addition to their native Frankfurt.??

From a small business engaged in the trade of goods and exchange, the Rothschild family has developed its business activities to include investment bank, private bank, asset Management, Mergers and Acquisitions, Assurance, capital risk, pensions and investments, sovereign debt and basic products. They have also invested in significant Infrastructure projects such as bridges, tunnels and railways andnotablythe Suez Canal. Other business interests include hotels, media, transportation, and wine.??

Key points to remember

  • The Rothschild family rose to prominence in Europe from the 18th century, when Mayer Amschel Rothschild founded the family empire in Frankfurt.
  • Mayer Rothschild sent sons to establish banking operations in London, Paris, Vienna and Naples, in addition to keeping a son in Frankfurt.
  • The family benefited greatly during the Napoleonic Wars by helping the British government with its finances.
  • In his will, Mayer Rothschild left strict instructions that title and property could only be passed on through male heirs, which encouraged marriage between family members.

Mayer Amschel Rothschild: the founder

Mayer Amschel Rothschild (1744-1812) grew up in Frankfurt Judengasse, the narrow alley where the 3,000 Jewish inhabitants of the city were confined. The conditions were overcrowded and difficult. Jews could not leave at night, on Sundays and on Christian holidays. They were prohibited from visiting public gardens or cafes and could not walk in public in groups of more than two.??

Mayer Rothschild learned the business at a young age. His father, Amschel Moses Rothschild, sold silk sheets and exchanged currency. One of Mayer’s first jobs was sorting through coins acquired at the biannual Frankfurt trade fairs, which attracted buyers and sellers from across the region.??

Her parents died of smallpox when Mayer was twelve. He lived with relatives, who sent him to Hanover as an apprentice with Simon Wolf Oppenheimer, a major Jewish bank. There, Mayer was exposed to foreign trade and finance, and discovered rare coins in places such as ancient Rome, Persia, and the Byzantine Empire. The collectors of these coins were princes and other wealthy men. The Jewish men who dealt with them were called “court Jews,” or court factors, which means that they did business with the nobility.?? ??

The beginnings of a banking empire

Mayer Rothschild returned to Frankfurt in 1763 at the age of 19 and joined his brothers in the business enterprise started by their father. Mayer became a dealer in rare coins and obtained the patronage of Crown Prince William of Hesse, who had also purchased coins from Mayer’s father. This was an important business relationship for Mayer, as it grew to include other financial services and helped Mayer develop ties with other nobles. Crown Prince William was the heir of immense wealth and later assumed the title of William IX, Landgrave of Hesse-Kessel.??

In 1769 Rothschild applied to Wilhelm for the title of court factor or crown agent. The honorary title meant that Mayer had rendered services to royalty and allowed him to hang a shield on his house with the coats of arms of Hesse and Hanau which effectively heralded this fact.??

In 1770 Mayer married Gutle Schanpper, the daughter of a money changer and courier. She gave birth to the couple’s ten children. They had five sons and five daughters.??

The history of the Rothschild family dates back to the 1450s in Frankfurt.

Develop and control the Rothschild footprint

The Rothschild banking empire developed rapidly during the French Revolution. Mayer Rothschild facilitated payments from Britain for hiring mercenary soldiers from Hesse.??

In the early 1800s, Rothschild sent his sons to live in Naples, Vienna, Paris and London, in addition to babysitting in Frankfurt. With the children of Mayer Rothschild scattered across Europe, the five linked branches became, in effect, the first bank to transcend borders. Lending to governments to finance war operations spanning several centuries has provided the Rothschild family with many opportunities to accumulate bonds and create additional wealth in a range of different industries.

Before his death, Mayer Rothschild left strict instructions to his heirs on how they were to manage the family’s finances. He wanted to keep the fortune within the family and, as such, his will sketched out a rigid patrilineal system of Succession, by virtue of which title and ownership could only pass through the male line and female descendants were excluded from any direct rights heritage. This had the effect of encouraging marriages between family members.

Between 1824 and 1877, there were 36 marriages of male descendants of Mayer Rothschild. Among them, 30 were married within the family. Most of them married first cousins ​​or first cousins. During this time, only four Rothschild women and two men married unrelated partners.

Nathan Mayer Rothschild: International Financial

Of the four Rothschild sons who ventured out, the third son Nathan (1777-1836) achieved the greatest success. Nathan moved to Manchester, England in 1798 to start a textile business. He then moved to London to establish himself as a banker, creating NM Rothschild in 1810.

NM Rothschild & Sons is still in business today. In 2019, the bank reported turnover of £ 1.87 billion and € 76 billion in assets under management.

Like other Rothschild banks, NM Rothschild & Sons extended credit to the UK government in times of crisis. During the Napoleonic Wars, the bank managed and funded the grants the government sent to the Allies and lent funds to pay British troops, almost on its own funding the war effort.

In 1824 Nathan Rothschild and Moses Montefiore co-founded Alliance Assurance Company, which today is part of the RSA group.In 1835 Nathan obtained the rights to the mercury mines in Spain, thus gaining a virtual world monopoly on the chemical element, which is essential for refining gold and silver. This offer proved invaluable in 1852, when NM Rothschild & Sons began refining gold and silver for the Bank of England and the Royal Mint.

Growth of philanthropic activities

Nathan Rothschild has contributed to many areas of the Jewish community. His family then extended these charitable efforts to other populations in Paris and London. His first efforts went to synagogues in London. This led to the formation of the United Synagogue, a group that helped streamline the causes of small synagogues. Later, family members supported Israel’s development and helped build housing and government buildings.

Nathan’s youngest child, Louise, and her seven daughters have taken charge of many of the 30 Rothschild charitable foundations in Frankfurt. These foundations included public libraries, orphanages, hospitals, retirement homes and special education funds.

The Jewish ‘Free School in London has received significant financial support. Educational efforts in Austria, France and Israel were also made possible through the generosity of Rothschild. In addition to funds for education, the family donated around 60,000 works of art to public institutions. The Rothschild family expanded the creation of social housing in the cities of London and Paris, and the Rothschild Foundation was established to continue these efforts.

The Rothschild house in the 20th century

Wars, politics and family rivalries diminished family fortunes over the next 100 years. The Naples branch of the bank closed in 1863 and the lack of male heirs led to the closure of the Frankfurt branch in 1901. The Vienna branch was closed in 1938 following the Nazi invasion of the Austria and the danger posed to the Jews.

The Vichy government in France expropriated the properties of Rothschild Bordeaux during the war, and the Nazis confiscated millions of dollars in art and other valuable items from the Austrian branch of the family (some of these have returned by the Austrian government in 1998). Over the years the lavish Rothschild estates have been donated to the British and French governments and other organizations and universities.

In the 1970s, three Rothschild banks remained: the London and Paris branches and a Swiss bank founded by Edmond Adolphe de Rothschild (1926-1997). In 1982, the socialist government of President François Mitterrand dealt a fatal blow to the Parisian bank, nationalized it and renamed it Compagnie Européenne de Banque. Despite his independence, Edmond came to the aid of his cousin, Baron David René James de Rothschild (1942), who remained in Paris and created Rothschild & Cie Banque in 1987. In 2003, the British and French banks were reunited with David as chairman.

In 2008, all holdings were reorganized into a single company, shareholder of Paris Orléans based in France, unifying family businesses some two centuries after Mayer Rothschild’s five sons dispersed across Europe.

Enter the 21st century

The family patrimony has been divided between descendants and heirs over the years. Today, Rothschild’s holdings span a number of industries, including financial services, real estate, mining, energy, and charities. The family also owns more than a dozen wineries around the world.

Traditionally, the Rothschild fortune is invested in closed companies. Today, the Rothschild companies have continued to be successful. Most of the family members are employed directly by these companies or are invested in operations that generate family wealth. Much of the family’s remarkable success is due to a strong interest in cooperation, being entrepreneurs, and practicing smart business principles.

Nathan Rothschild’s estate was intimately linked to the family’s other fortunes and was part of the collective wealth that each Rothschild passed on to the next generation. Descendants of the Rothschilds continue to fund global business operations and contribute to academic, humanitarian, cultural and business efforts.

The motto of the family is Concordia, Integritas, Industria, which means harmony, integrity and industry.

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