The House of Rothschild: . Money's Prophets, 1798-1848 - Niall Ferguson  ## Metadata - Author: **Niall Ferguson** - Full Title: The House of Rothschild: . Money's Prophets, 1798-1848 - Category: #books ## Highlights - **B**anking,” the 3rd Lord Rothschild once remarked, “consists essentially of facilitating the movement of money from Point A, where it is, to Point B, where it is needed.” ([View Highlight](https://read.readwise.io/read/01htafn36gz4rz9vjxvpmpndbz)) - There are numerous apocryphal business maxims attributed to the Rothschilds—for example, to hold a third of one’s wealth in securities; a third in real estate; and a third in jewels and artworks ([View Highlight](https://read.readwise.io/read/01htc6xheq3gph17c5r9etaypg)) - Involvement in the management of his huge investment portfolio was one of the first steps Mayer Amschel Rothschild took in order to become a banker rather than a mere coin dealer (his original business) ([View Highlight](https://read.readwise.io/read/01htc785hyk8yhy7sys4txpccd)) - This explains the importance they always attached to having up-to-date political and economic news. Three things would give an investor an edge over his rival: closeness to the centre of political life, the source of news; the speed with which he could receive news of events in states far and near; and the ability to manipulate the transmission of that news to other investors ([View Highlight](https://read.readwise.io/read/01htd26qg8qcq1akg5b3srwem7)) - This explains why the Rothschilds spent so much time, energy and money maintaining the best possible relations with the leading political figures of the day. It also explains why they carefully developed a network of salaried agents in other key financial markets, whose job it was not only to trade on their behalf but also to keep them supplied with the latest financial and political news ([View Highlight](https://read.readwise.io/read/01htd27mvprw5hy71efpw0kdqz)) - And the Rothschilds were also major industrial investors—an aspect of their business which has often been underestimated. When the development of railways raised the possibility of transforming Europe’s transport system in the 1830s and 1840s, the Rothschilds were among the leading financial backers of lines, beginning in France, Austria and Germany ([View Highlight](https://read.readwise.io/read/01htd2ybrwatrtw94vb78zjxbw)) - It is not difficult to create a party for oneself when one is powerful enough to draw many people into one’s interest ([View Highlight](https://read.readwise.io/read/01htfgks2d484f2ansbsqd4d73)) - In a section of his “Biographical Notes on the House of Rothschild” which was only published posthumously, Gentz elaborated on this last point—the relationship between ability (“virtue”) and circumstances (“luck”)—in a Machiavellian vein: There is a truth, which, although not quite new, is generally not properly understood. The word *luck* as commonly used in the history of famous individuals or eminent families, becomes bereft of all meaning when we endeavour to dissociate it entirely from the personal or eminent factors in each case. There are circumstances and events in life in which good or ill luck may be a determining although not an exclusive factor in human destiny. Lasting success, however, and constant failure are always . . . attributable to the personal virtue or the personal failings and shortcomings of those who are blessed by the one or damned by the other. Nevertheless, the most outstanding personal qualities may sometimes require exceptional circumstances and world-shattering events to come to fruition. Thus have the founders of dynasties established their thrones, and thus has the House of Rothschild become great ([View Highlight](https://read.readwise.io/read/01htfgybebg0dn03ewaygzbwzh)) - All rapidly accumulated wealth is either the result of luck or discovery, or the result of a legalised theft ([View Highlight](https://read.readwise.io/read/01htgbyvq3rsnezxwjan9v0p68)) - There is but one power in Europe and that is Rothschild. His satellites are a dozen other banking firms; his soldiers, his squires, all respectable men of business and merchants; and his sword is speculation ([View Highlight](https://read.readwise.io/read/01htgdr488dkp9h5q1cfk1ke6z)) - The Jew *speculates on peace*, that is on a rise, and that explains why peace in Europe has lasted for fifteen years ([View Highlight](https://read.readwise.io/read/01htgx4mv8vr9tgr62m8h6ym3x)) - We Rothschilds are inveterate scribblers,” wrote Charlotte de Rothschild to her children in 1874, “and cannot live without letter writing and letter receiving ([View Highlight](https://read.readwise.io/read/01hth92gkaevyxtrmnq6mx3628)) - *Our Blessed Father”: Origins* *Yes, my dear fellow, it all amounts to this: in order to do something you must be something. We think Dante great, but he had a civilisation of centuries behind him; the House of Rothschild is rich but it has required more than one generation to attain such wealth. Such things all lie deeper than one thinks.* —GOETHE ([View Highlight](https://read.readwise.io/read/01htk7skmhn99zk5njdc1cgsv9)) - This great accumulation of capital had been achieved primarily by selling the services of the Hessian army to the highest bidder—usually Britain—a system which reached its zenith during the American War of Independence ([View Highlight](https://read.readwise.io/read/01htmnb21gv450adng3fq12vq2)) - The Republicans who, like the Philistines of old, fell upon Rothschild, left him not one thaler’s value of his own money or property. In truth, he was, like all the other Jews and citizens, reduced to utter poverty but the prince’s treasure was safe ([View Highlight](https://read.readwise.io/read/01htntfb7mdk4g253mbz05g2fh)) - Having managed to hang on to assets worth 27 million gulden, his investment income remained substantial, even after the extra costs imposed by exile. (According to Berghoeffer’s figures, the surplus was something like 740,000 gulden a year.) ([View Highlight](https://read.readwise.io/read/01htnxbztce6han8qhegf1yf37)) - we owe not only our wealth but also our honourable position in society primarily to the [spirit of] unity and co-operation [that binds together] all our partners, bank houses and establishments ([View Highlight](https://read.readwise.io/read/01htwmcv1x5511ve5d68arkcpy)) - Historians have never adequately explained how an obscure Jewish merchant banker—who only a few years before had been a smuggler, and a few years before that a minor textiles exporter—was able to become the principal conduit of money from the British government to the continental battlefields on which the fate of Europe was decided in 1814 and 1815. Of all the steps in the ascent of the house of Rothschild, this was surely the greatest; yet it is also the least understood. ([View Highlight](https://read.readwise.io/read/01htxzs5za5k2xms6cyn8y5jx5)) - *You are certainly right that there is much to be earned from a government which has no money. But you have to take risks.* —JAMES ROTHSCHILD TO NATHAN ROTHSCHILD. ([View Highlight](https://read.readwise.io/read/01hv58fbqkz6mjct1m21m2qwnb)) - Like the Rothschilds the family hailed from Germany (Francis Baring had emigrated from Bremen in 1717); and, like Nathan, Francis’s son John had made his fortune in the textiles business, as a wool manufacturer, before his sons established the merchant bank of Baring Brothers in 1770 ([View Highlight](https://read.readwise.io/read/01hv5cqmm1b94her2empq63vh1)) - It was at this point that Nathan began to sell, realising profits of more than £250,000. Interestingly, this was five months ahead of the market’s final peak at 84.25 in December 1817 (see illustration 4.i) and this may explain why he delayed slightly before relaying the advice to sell to others ([View Highlight](https://read.readwise.io/read/01hvay26ghvp8h4j5b3aatv8h2)) - In so far as they helped to finance Austrian intervention in Italy and French intervention in Spain, the Rothschilds deserve to be thought of as financiers of “reaction.” ([View Highlight](https://read.readwise.io/read/01hvfhw5z8tfp49aycbxay8xtt)) - Even as unlikely a figure as Gregor MacGregor, a Scottish adventurer and former general in the Venezuelan army, was able to raise £200,000 by styling himself the “Caique of Poyais” and persuading investors that the malarial swamp in Honduras which he claimed to rule was ripe for development. With a bravado it is impossible not to admire, MacGregor even wrote to Nathan outlining a project for an independent Hebrew colony in his “kingdom” on an island called Ruatan ([View Highlight](https://read.readwise.io/read/01hvj6sn614gewr8eavay2b8jk))