With no secular education and barely able to speak or write German, Mayer Rothschild (1744-1812) became one of the richest men in Germany. He founded a dynasty of bankers who financed the wars and whims of nobility and governments.
Mayer Amschel Rothschild, the son of Amschel Moses Rothschild and Schoenche Rothschild, was born in Frankfurt, Germany on February 23, 1744, the fourth of eight children. His father was a moneychanger and dealer in silk cloth. The family surname was derived from the house where Isaac Elchanan (d. 1585) lived in Frankfurt. At the time, it was a common practice to give names to houses (such as White Tulip, Ship, Green Jar, etc.). Elchanan's house was called zum Roten Schild (at the Red Shield), from which the last name Rothschild came. In 1664, Isaac's grandson Naftali left zum Roten Schild and moved to a house called Hinterpfann, meaning house at the back of the sauce pan, but kept the Rothschild surname.
The Jews of Frankfurt were required to live apart from the Christians in a single narrow lane called the Judengasse, or Jews' Alley. The street was dark, filthy, smelly and overcrowded. The 3,000 Jewish inhabitants were locked into this ghetto on Sundays, Christian holidays, and at night. Frankfurt's Jews could not enter a public garden, visit a coffee shop, or walk more than two abreast in the street. Although other eighteenth century German cities imposed restrictions on Jews, none were as harsh as those of Frankfurt.
Frankfurt was a major center of trade, with many bankers and wholesale merchants. The city lay at the crossroads of five international land routes and sat on the banks of the Main River, near where it connected to the Rhine. Thus Frankfurt was centrally located to connect countries as far apart as England, Russia and Italy.
Rothschild attended a Jewish school called a heder, beginning at the age of three or four. There he studied the Jewish sacred books, the Torah and the Talmud. By the age of seven or eight, Rothschild and his classmates would have read the five books of Moses in Hebrew and Judendeutsch, a mixture of Hebrew and the Frankfurt dialect. (Frankfurt Jews did not speak Yiddish). Instruction at the heder did not include any secular subjects or German. At home, Rothschild helped with the family business, running errands to other moneylenders and sorting out various coins his father had exchanged for local money.
In 1775, at the age of eleven, Rothschild left the heder and went to study in a Jewish seminary, or yeshiva, near Nuremberg. A few months later, a smallpox epidemic struck the Judengasse. Rothschild's father died on October 6, 1755; his mother died on June 29, 1756. The orphan returned home to live with relatives.
Learned the Banking Business
At the age of 13, Rothschild went to Hanover to serve an apprenticeship with the bank of Wolf Jakob Oppenheim. The Oppenheim's were court-Jews—bankers who used their family connections across Europe to furnish credit to royalty. Working for them, Rothschild learned how to conduct foreign trade and how to issue or cash bills of exchange, the equivalent of a modern check. In Hanover, he also learned about rare and antique coins and medals, which collectors often bought as an investment. By the age of 18, he was an expert in the field and began to buy rare coins for the collection of General von Estorff.
At the end of the Seven Years' War, in 1763, Rothschild returned home to Frankfurt. There he joined his brother Calmann's money-changing business, adding his own specialty to it, the trade in rare coins, medals, curios, jewels, engravings, and antiques. Through this business Rothschild was introduced to Crown-Prince Wilhelm, the future Landgrave (Prince) of Hesse, heir to a huge fortune. In 1769, Rothschild requested of Wilhelm the title of court-factor, or crown agent, meaning that he had done business with royalty. The honorary title allowed Rothschild to hang a shield decorated with the arms of Hesse and Hanau on the door of his house. The title did not allow him any special privileges. Rothschild still could not leave the Judengasse at night or on Sundays. It took him 14 more years to achieve that honor.
On August 29, 1770, Rothschild married Guttle Schnapper, the 17-year-old daughter of a bill broker, moneychanger and court factor to a small principality. The following year, she gave birth to Schonche, the first of their ten children. By 1792, the family had grown to include Amschel, Salomon, Nathan, Belche, Breinliche, Calmann, Julie, Henriette, and Jacob.
By 1784, at age forty, Rothschild was fairly well off. When a larger house became available in the Judengasse, he bought it. The House at the Green Shield contained a water pump, considered to be a great luxury at the time. Behind the house was Rothschild's counting house with secret shelves in the walls.
In 1785, Crown Prince Wilhelm became Wilhelm IX, the new Landgrave, and the richest man in Europe. Rothschild sold him jewels and cultivated a relationship with Carl Buderus, Wilhelm's chief revenue officer. Buderus made private investments through Rothschild that returned a handsome profit. Buderus spoke well of him to Wilhelm, who began doing a little more business with Rothschild. His other business dealings were successful. With the help of sons, Salomon and Amschel, the family became a major wholesaler of wool, cotton cloth and flour.
In 1792, troops of the French revolution occupied Frankfurt for a time. Wilhelm could not decide if he should remain neutral in the war between France and the grand coalition of England, Prussia and Austria, or if he should join the coalition. A subsidy of 100,000 pounds from England persuaded him to join the coalition. Rothschild made a profit by discounting the money received from England. His business also included a transportation and forwarding agency. Rothschild contracted with the Austrian army to supply it with wheat, uniforms, horses, and equipment. As a military contractor, he was able to accumulate his first large amount of capital. Rothschild was known for his modesty, good nature, and generosity. He gave charity to all, not just to Jews.
In the mid-1790s, Rothschild became a major importer of cotton cloth from England. At this time he hired a young woman to deal with his German and English correspondence and his daughters helped in the counting house. In 1796, Napoleon's troops attacked Frankfurt, accidentally setting the Judengasse on fire and destroying half of it, leaving 2,000 inhabitants homeless. The displaced Jews were allowed to live in the Christian part of the city for six months. Although the House at the Green Shield had not been damaged, Rothschild took advantage of the relaxed city laws to rent space for all of his wares outside the ghetto, allowing his family full use of the house. In the same year, he made his three eldest sons partners in the business.
Family Business Expanded
Nathan Rothschild was the most gifted of Mayer's sons. He was creative, hard working, and independent. Nathan was in charge of importing goods from England. In 1798, the story goes, after an encounter with an unpleasant English merchant, Nathan decided to buy goods directly from England instead of using middlemen. In actuality, Mayer Rothschild had made the decision to send Nathan to England. The family's main bookkeeper accompanied him, being able to speak English. Thus Rothschild established his first branch abroad.
In 1800, the Emperor Franz II named Rothschild and Amschel his imperial crown-agents, which gave them the right to bear arms. In 1802, Rothschild changed the spelling of his first name from "Meyer" to "Mayer," perhaps to make it seem more German. A year later, Wilhelm appointed Rothschild chief court agent, the highest form of court Jew.
Rothschild helped found a modern school for the children of the Judengasse in 1803. Besides receiving a religious education, the pupils studied German, French, geography, natural history, and modern philosophy. Although the orthodox rabbis of the ghetto decried it, Mayer Rothschild and later his son Amschel supported the school.
By 1807, Rothschild was doing almost all of the international banking for the Landgrave thanks to Buderus. The strategy he used to increase the volume of his business was to accept lower profits. His capital accumulated quickly, and his bank became one of the biggest in Frankfurt. In addition to banking, Rothschild also traded in textiles, colonial goods, coins, antiquities, and wine. He prospered by selling the goods that Nathan shipped from England that included textiles, indigo, tea, dried fruit, sugar, and coffee. As his fortune increased, Rothschild began negotiating state loans for the Landgrave, who desired to lend money anonymously.
Fought for Jewish Rights
In 1806, Karl von Dalberg became ruler of Frankfurt. Rothschild granted him loans, which other banks would not. In exchange, he asked Dalberg to extend the rights of full citizenship to all the Jews. Dalberg offered to grant these rights to Rothschild immediately, but needed more time to decide about the rest of the community. Rothschild refused this offer because he did not consider himself worthier than his co-religionists and refused to be given priority. It was not until 1811 that Rothschild succeeded in negotiating equal rights for the Jews of the Frankfurt ghetto. In exchange, they were required to pay Dalberg a huge sum.
At the end of 1806, Napoleon ordered an embargo of English goods, prohibiting all trade with England. Merchants such as the Rothschilds became adept at smuggling the forbidden goods and made a lot of money selling the high-priced contraband.
Caught in the war between Prussia and France, Wilhelm fled his castle to live in exile. Buderus continued to serve as go-between for the Landgrave and Rothschild. When Wilhelm rebelled against the kingdom of Westphalia, which was ruled by Napoleon's brother Jerome, Buderus was arrested. Rothschild and his sons, Salomon and Jacob, were placed under house arrest and their home was searched. They had gotten advance warning of the search and had removed or hidden anything incriminating. Rothschild and his family were questioned for almost a week. The investigation ended when the chief of police asked for and received a bribe. Rothschild learned an important lesson from this episode. He resolved to no longer confine his services to one ruler.
Rothschild and Buderus became silent partners. Soon after, Wilhelm allowed Nathan Rothschild to manage his English accounts. Nathan bought English stock in his own name for Wilhelm, thus greatly increasing his credit standing. Using Wilhelm's money, Nathan speculated and made great profits.
In 1810, Rothschild reorganized his business, making his grown sons full partners, but retaining for himself a decisive vote. Now in poor health, he allowed his sons to run the business, while he relaxed and studied English.
In March 1811, Jacob Rothschild settled in Paris where he founded the French branch of the family banking business. Under the noses of the French, Jacob cleverly managed to move English money to the Duke of Wellington, who was fighting Napoleon on the continent.
Although in poor health, Mayer Rothschild was appointed to a seat on the Frankfurt electoral college, despite objections to the naming of a Jew to this body. On September 19, 1812, Rothschild died in Frankfurt, leaving a vast business empire to his five sons.
In 1817, the Rothschild sons were made noblemen by the Austrian emperor. Amschel, Jacob and Calmann changed their names to Anselm, James, and Carl. Anselm headed the Frankfurt branch of the company. Nathan stayed in London, becoming the most successful of the Rothschild sons. Salomon settled in Vienna and ran the Austrian branch of the firm. Carl moved to Naples, and became court banker to the Bourbon kingdom. James did very well in Paris.
Today, the descendants run a financial empire that covers the world, with branches in Europe, Australia, the United States, Canada, Mexico, Rio de Janeiro, Tokyo, Hong Kong and Singapore.
Further Reading on Mayer Rothschild
Cowles, Virginia, The Rothschilds: A Family of Fortune, Alfred A.Knopf, 1973.
Elon, Amos, Founder: A Portrait of the First Rothschild and His Time, Viking, 1996.
Ferguson, Neil, The House of Rothschild: Money's Prophets 1798-1848, Viking, 1998.
Lottman, Herbert R., The French Rothschilds: The Great Banking Dynasty Through Two Turbulent Centuries, Crown Publishers, 1995.