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The Rothschild family, the most famous European banking dynasty, has been the subject of a lot of questions and conspiracy theories and that is why the dynamics of this Jewish family are intriguing. For around 200 years, it had a great influence on the socio-economic history of Europe. Many conspiracy theorists, financial experts and journalists believed it to be the richest family in Europe. There have been statements like the family is at present worth around $500 trillion and that it owns 80% of the world’s wealth. However these are not credible. Over the years its wealth has dwindled and currently the net worth is estimated to be $450 billion, according to many sources.

HISTORY BEGINNINGS The name “Rothschild” is derived from the German zum rothen Schild , meaning “at the red shield”, referring to the house in the ghetto where the family lived for many generations. Mayer Amschel Rothschild , the founder of the banking enterprise, grew up in Frankfurt’s Judengasse. His father, Amschel Moses Rothschild, had a business of silk cloth and currency exchange. One of Mayer’s first jobs was sorting coins acquired through Frankfurt’s semi-annual trade fairs, which attracted buyers and sellers throughout the region. His apprenticeship, after the death of his parents, with Simon Wolf Oppenheimer, a prominent Jewish banking house, provided him the exposure to foreign trade and finance when he learned about rare coins with aristocracy from ancient Rome, Persia and the Byzantine Empire. The Jewish men who transacted with aristocracy were called “court Jews,” or court factors, meaning they did business with nobility. Mayer Rothschild returned to Frankfurt at the age of 19 and joined his brothers in their father’s business. He won the patronage of Crown Prince Wilhelm of Hesse which helped him in developing ties with other nobles. Crown Prince Wilhelm later assumed the title Wilhelm IX, Landgrave of Hesse-Kessel. In 1769, Wilhelm granted Mayer the title of court factor which signified that Mayer had performed services for royalty and allowed him to hang from his house a shield with the Hesse and Hanau coat of arms. In 1770, he married Gutle Schanpper. The couple had five sons and five daughters.

5 BRANCHES The Rothschild coat of arms was a clenched fist with five arrows symbolising the five dynasties established by Mayer Rothschild’s five sons, in a reference to Psalm 127: “Like arrows in the hands of a warrior, so are the children of one’s youth.” The family motto which appears below the shield is Concordia, Integritas, Industria (Unity, Integrity, Industry). Starting out in a Frankfurt banking house, Mayer and his five sons soon became international bankers. Mayer and his eldest son, Amschel, supervised the growing business from Frankfurt, while Nathan established a branch in London in 1804, Jakob in Paris in 1811, and in the 1820s Salomon in Vienna and Karl in Naples. With these five sons spread across Europe, the five linked branches became, in effect, the first bank to transcend borders.

EXPANSION OF ROTHSCHILD BANKING EMPIRE During the French Revolution, the Rothschild Banking Empire was flourishing. Mayer became an intermediary for the payments to Hessian mercenary soldiers from Britain. Wars over several centuries provided him with ample opportunity to accumulate bonds and build additional wealth in a range of different industries as the wars meant loans to warring princes or governments, smuggling as well as legal trading in key products such as wheat, cotton, colonial produce, and arms; and the transfer of international payments. There is a theory that they created situations which led to World War I as they made a massive fortune by supplying ammunition, weapons and medical supplies to both the Allies & the Axis powers. Although World War II was not started by them, it is said that their actions before World War I led to the fall of Germany’s economy, and subsequently, World War II. However, peace transformed this trajectory: the banking group became an agent in government securities (Prussian or English, French or Neapolitan), stocks of insurance and industrial companies. Thus, the family was able to adapt to the Industrial Revolution and it contributed to the economic growth of Europe with investments in various activities like railway, coal, etc. The banking group continued to expand after the 1850s and achieved an important position in the world trade of oil and nonferrous metals. Upon the arrival of new joint-stock banks and commercial, or deposit, banks in England, France and in the German states, its previous oligopolistic position was seriously threatened. By the last quarter of the 19th century, other groups, in Europe and in the United States, had become stronger, richer, and more enterprising. Yet, the two guidelines laid down by Mayer Amschel for the Rothschild business operations—

  1. To conduct all transactions jointly and

  2. Never to aim for excessive profits helped to compensate to a notable extent for the inevitable risks inherent in handing down a business to future generations, not all of whose members are qualified to run it. He also wanted to keep the fortune within the family, thus, he outlined a rigid patrilineal system of succession, whereby title and property could only pass through the male line and females were excluded from any direct inheritance. This had the effect of encouraging marriages among family members. Unlіkе thе court fасtоrѕ of earlier tіmеѕ, whо after initial success lоѕt thеіr wеаlth thrоugh vіоlеnсе оr ехрrорrіаtіоn, thіѕ nеw kіnd оf іntеrnаtіоnаl bаnk сrеаtеd bу Rоthѕсhіld wаѕ іmреrvіоuѕ tо lосаl аttасkѕ, mаіnlу bесаuѕе thеіr аѕѕеtѕ wеrе hеld іn fіnаnсіаl іnѕtrumеntѕ, gоіng rоund thе wоrld оf ѕtосkѕ, bоndѕ and dеbtѕ.

NATHAN MAYER ROTHSCHILD : The most successful of the 5 successors

In 1798, Nathan moved to Manchester, England and started a textile business. Later he moved to London where he established himself as a banker and set up N M Rothschild in 1810. N M Rothschild & Sons is still operational today. In 2019, the bank reported £1.87 billion in revenue and 76 billion euros in assets under management.

During the Napoleonic Wars, Nathan Mayer Rothschild was the sole important person in terms of financing the British war efforts. This started with the organisation of precious metal shipments to the armies stationed across Europe by the Duke of Wellington. Additionally he ploughed a huge sum of money into financing the British allies, this included nearly $10 million USD in 1815 alone (equivalent to nearly $900 million USD today). According to many conspiracy theorists this huge financing operation from Nathan Mayer and his brothers made them the single most influential family to play a part in Napoleon’s defeat, and the following ending of the Napoleonic Wars.

Associated with this, is another legend that Rothschilds bought the whole British economy. With Napoleon appearing to be on the upside of this battle, news soon reached London that Waterloo would be lost. However, upon the arrival of reinforcements the British army came out as victors. This news was known only to the Rothschild Family. The legend states that Nathan Mayer in a bid to cause prices to crash, sold all of his government bonds at the London Stock Exchange. Believing that the Battle of Waterloo was lost, everyone followed suit. In the end he then bought all the government bonds he could at a record low price. When news of Britain’s victory was out, the prices of these bonds rose, resulting in immense profit for the Rothschild dynasty.

In 1824, Nathan Rothschild and Moses Montefiore co-founded the Alliance Assurance Company, which today is part of the RSA Group. In 1835, Nathan became the owner of the mercury mines in Spain, which gave him a virtual world monopoly on mercury, critical to refining gold and silver. However this was crucial in 1852, when N M Rothschild & Sons began refining gold and silver for the Bank of England and the Royal Mint.

GREAT INFLUENCE AROUND THE WORLD When the sons of the five founding brothers entered the business, the Rothschilds were polished and refined, to the point of blending into leadership positions without losing any of their family attributes. They were influencing the national economy and politics of their countries. Alphonse, for example, as the head of the international banking syndicate, in 1871 and 1872 placed the two great French loans known as liberation loans after France’s defeat by Prussia. Around the same time in London, Lionel, (member of the House of Commons since 1858), was able to finance the British government to become the principal stockholder in the Suez Canal Company, on a few hours’ notice.

The Rothschilds were much honoured. Mayer’s five sons became barons of the Austrian Empire, the first Jew to enter the British Parliament was a Rothschild, and another was the first to be elevated to the British peerage. Baron Philippe de Rothschild became a premier winemaker of the vineyard Mouton-Rothschild.

PHILANTHROPIC ACTIVITIES Nathan Rothschild’s earliest efforts went toward synagogues in London. This led to the formation of the United Synagogue, that helped streamline the causes of the smaller synagogues. Later, the family supported the development of Israel. Nathan’s youngest child, Louise, and her seven daughters took responsibility for the 30 Rothschild charitable foundations in Frankfurt, which included public libraries, orphanages, hospitals, homes for the elderly, and special funds allocated for the purpose of education.

The Jews’ Free School in London also received huge financial support. Educational efforts in Austria, France, and Israel were also made through their aid.

DWINDLING OF WEALTH Over years, the family wealth diminished owing to wars, politics and family rivalries. The Naples branch closed in 1863, due to no male heirs the Frankfurt branch closed in 1901 and the Vienna branch was closed in 1938 because of the danger posed to Jews during the Nazi invasion of Austria. The Nazis also confiscated millions worth of precious objects from the Austrian branch of the family.

The Vichy government in France expropriated Rothschild Bordeaux properties during the war, and over the years, palatial Rothschild estates were donated to the British and French governments and other organizations and universities.

By the 1970s, only three banks remained: the London and Paris branches and a Swiss bank which was founded by Edmond Adolphe de Rothschild. In 1982, President Francois Mitterrand’s socialist government nationalised the French branch and renamed it Compagnie Européenne de Banque. Edmond aided his cousin, Baron David René James de Rothschild, who stayed in Paris and in 1987 created Rothschild & Cie Banque.

By 2003-2008, all of the holdings were reorganized under a single company, a shareholder of Paris Orléans based in France, and the family businesses were unified after around two centuries, after the five sons of Mayer Rothschild spread out across Europe.

CONTEMPORARY TIMES Nowadays, the Rothschild Family stays low-key, which has led many conspiracy theorists to believe that they basically control the world from behind the scenes. There are other beliefs like the Rothschilds are the founders of International banking as they were one of the first people to invest into international government projects in the colonies, due to which they got heavy and substantial returns. They had a very strong and sophisticated intra-bank communication system, forming the first truly international bank.

Despite being less prevalent in recent times, the family has achieved remarkable success largely due to a strong interest in cooperation, being entrepreneurs, and the practice of smart business principles. They still have business operations in a number of sectors, including finance, energy, charity, mining, winemaking, and farming.

There are a number of distinguished Rothschilds even today including David Mayer de Rothschild, a billionaire and environmentalist, Hannah Mary Rothschild, a documentary filmmaker, Nathaniel Philip Rothschild , the co-chairman of Atticus Capital, a hedge fund worth $20 billion.

By Mansha Jain

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