Rothschild family

From Wikipedia: Rothschild family

For the German surname "Rothschild", see Rothschild (disambiguation). For one of the investment banks founded by the family, see N M Rothschild & Sons. For one of the private banks founded by the family, see LCF Rothschild Group.

Rothschild Coat of Arms
Rotschilds arms.jpg
Ethnicity Ashkenazi Jewish
 
Current region Monaco, Luxembourg, France, Switzerland, Liechtenstein, United Kingdom, Cayman Islands
 
Information
Place of origin Frankfurt am Main

One of the many estates built by the Austrian branch of the family, Schloss Hinterleiten

The Rothschild family (known as The House of Rothschild,[1] or more simply as the Rothschilds) is a European family of German Jewish origin that established European banking and finance houses from the late eighteenth century. Five lines of the Austrian branch of the family were elevated into the Austrian nobility, being given hereditary baronies of the Habsburg Empire by Emperor Francis II in 1816. The British branch of the family was elevated into the British nobility at the request of Queen Victoria.[2][3] It has been argued that during the 19th century, the family possessed by far the largest private fortune in the world, and by far the largest fortune in modern world history.[3][4][5]

Origins

The family's rise to European prominence began in 1744, with the birth of Mayer Amschel Rothschild in Frankfurt am Main, Germany, the son of Amschel Moses Rothschild (born circa 1710),[6] a money changer, who had traded with the Prince of Hesse. Born in the ghetto (called "Judengasse" or Jewish Alley) of Frankfurt, Mayer developed a finance house and spread his empire by installing each of his five sons in European cities to conduct business. Unlike the old court Jews, the new kind of international firm the Rothschilds created was impervious to local attack. In 1819, as if to demonstrate that newly acquired Jewish rights were illusionary so far, anti-Semitic violence broke out in many parts of Germany. These Hep-Hep riots, as they were called, included an assault on the Rothschild house in Frankfurt. It made no difference. Nor did a further attack during the 1848 revolution. The money was no longer there. It was paper, circulating through the world. Henceforth their real wealth was beyond the reach of the mobs, almost beyond the reach of greedy monarchs.[7] Another essential part of Mayer Rothschild's strategy for future success was to keep control of their businesses in family hands, allowing them to maintain full discretion about the size of their wealth and their business achievements. About 1906, the Jewish Encyclopedia noted: "The practice initiated by the Rothschilds of having several brothers of a firm establish branches in the different financial centers was followed by other Jewish financiers, like the Bischoffsheims, Pereires, Seligmans, Lazards, and others, and these financiers by their integrity and financial skill obtained credit not alone with their Jewish confrères, but with the banking fraternity in general. By this means Jewish financiers obtained an increasing share of international finance during the middle and last quarter of the nineteenth century. The head of the whole group was the Rothschild family...". It also states: "Of more recent years, non-Jewish financiers have learned the same cosmopolitan method, and, on the whole, the control is now rather less than more in Jewish hands than formerly."[8]

Following a royal and aristocratic technique, which also was copied later by business dynasties such as the Du Pont family,[9] Mayer Rothschild successfully kept the fortune in the family with carefully arranged marriages, including between first or second cousins, although by the later 19th century, almost all Rothschilds had started to marry outside the family, usually into the aristocracy or other financial dynasties.[9] His sons were:

The Rothschild coat of arms contains a clenched fist with five arrows symbolizing the five sons of Mayer Rothschild, a reference to Psalm 127: "Like arrows in the hands of a warrior". The family motto appears below the shield, in Latin, Concordia, Integritas, Industria, (Harmony, Integrity, Industry).[10] The German family name means "Red Shield". Today, it would be spelled "Rotschild", and is pronounced approximately ROT-shillt in German, not wroth(s)-child as it is in English.

Families by country:

The Napoleonic Wars

The Rothschilds already possessed a very significant fortune before the start of Napoleonic Wars (1803–1815), and Nathan Mayer Rothschild gained preeminence in the bullion trade at this time.[11] From London in 1813 to 1815, he was instrumental in the financing of the British war effort, financing the shipment of bullion to the Duke of Wellington's armies across Europe, as well as arranging the payment of British financial subsidies to their Continental allies. In 1815 alone, the Rothschilds provided £9.8 million (in 1815 currency prices) in subsidy loans to Britain's continental allies.[12]

One of the smaller city houses, Vienna. A collection of far larger Viennese palaces known as Palais Rothschild were torn down during WW2

The brothers helped co-ordinate Rothschild activities across the continent, and the family developed a network of agents, shippers and couriers to transport gold across war-torn Europe. The family network was also to provide Nathan Rothschild time and again with political and financial information ahead of his peers, giving him an advantage in the markets and rendering the house of Rothschild still more invaluable to the British government. In one instance, the family network enabled Nathan to receive in London the news of Wellington's victory at the Battle of Waterloo a full day ahead of the government's official messengers.[11]

The basis for the Rothschild's most famously profitable move was made after the news of British victory had been made public. Nathan Rothschild calculated that the future reduction in government borrowing brought about by the peace would create a bounce in British government bonds after a two year stabilisation, which would finalise the post-war re-structuring of the domestic economy.[12][13][14] In what has been described as one of the most audacious moves in financial history, Nathan immediately bought up the government bond market, for what at the time seemed an excessively high price, before waiting two years, then selling the bonds on the crest of short bounce in the market in 1817 for a 40% profit. Given the sheer power of leverage the Rothschild family had at its disposal, this profit was an enormous sum.[12]

Contrary to stories emanating from an article about the family in a late nineteenth-century magazine with decidedly antisemitic undertones,[citation needed] Rothschild's first concern on this occasion was not the potential financial advantage on the market which the knowledge would have given him; he and his courier immediately took the news to the government.[11] It is believed that this is a myth that originated in a partisan French pamphlet in 1846 and was embellished by John Reeves in 1887 in The Rothschilds: the Financial Rulers of Nations.[citation needed] It was then repeated in later popular accounts, such as that of Morton.[13][14]

Nathan Mayer Rothschild initially started his business in Manchester England in 1806, and gradually moved it to London, where in 1809 he acquired the location at 2 New Court in St. Swithin's Lane, City of London,[11] where it operates today; he established N. M. Rothschild and Sons in 1811. In 1818, he arranged a £5 million loan to the Prussian government, and the issuing of bonds for government loans formed a mainstay of his bank’s business. He gained a position of such power in the City of London that by 1825–6 he was able to supply enough coin to the Bank of England to enable it to avert a market liquidity crisis.

International High Finance
"I have not the nerve for his operations. They are well-planned, with great cleverness and adroitness in execution – but he is in money and funds what Napoleon was in war." —Baron Baring on Nathan Rothschild[15]

Mentmore Towers, Buckinghamshire

In 1816, four of the brothers were each elevated to the hereditary nobility by Austrian Emperor Francis I; moreover, a fifth brother, Nathan, was elevated in 1818. All of them were granted the Austrian title of baron or Freiherr on 29 September 1822. As such, some members of the family used "de" or "von" Rothschild to acknowledge the grant of nobility. In 1885, Nathan Mayer Rothschild II (1840–1915) of the London branch of the family, was granted the hereditary peerage title Baron Rothschild in the Peerage of the United Kingdom.

The Frankfurt terminus of the Taunus railroad, financed by the Rothschilds. Opened in 1840, it was one of Germany's first railroads.

Rothschild family banking businesses pioneered international high finance during the industrialisation of Europe and were instrumental in supporting railway systems across the world and in complex government financing for projects such as the Suez Canal. The family bought up a large proportion of the property in Mayfair, London. Major businesses directly founded by Rothschild family capital include Alliance Assurance (1824) (now Royal & SunAlliance); Chemin de Fer du Nord (1845); Rio Tinto Group (1873); Société Le Nickel (1880) (now Eramet); and Imétal (1962) (now Imerys). The Rothschilds financed the founding of De Beers, as well as Cecil Rhodes on his expeditions in Africa and the creation of the colony of Rhodesia. From the late 1880s onwards, the family controlled the Rio Tinto mining company.

The Japanese government approached the London and Paris families for funding during the Russo-Japanese War. The London consortium's issue of Japanese war bonds would total £11.5 million (at 1907 currency rates).[16]

After amassing huge fortunes, the name Rothschild became synonymous with extravagance and great wealth, and the family was renowned for its art collecting, for its palaces, as well as for its philanthropy. By the end of the century, the family owned, or had built, at the lowest estimates, over 41 palaces, of a scale and luxury perhaps unparalleled even by the richest Royal families.[12] The soon to be British Prime Minister Lloyd George claimed, in 1909, that Lord Nathan Rothschild was the most powerful man in Britain.[3][17]

In 1901, with no male heir to take it on, the Frankfurt House closed its doors after more than a century in business. It was not until 1989 that they returned when N M Rothschild & Sons, the British investment arm, plus Bank Rothschild AG, the Swiss branch, set up a representative banking office in Frankfurt.

04.13.2011. 08:22

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