Mayer Amschel Rothschild was the pioneer of international banking and the founder of the Rothschild dynasty, which will later become the wealthiest family in the history of time. Even though he, as a Jew, didn’t have same rights as Christians in Frankfurt (Germany) where he spent his lifetime, he managed to expand his business and become one of the most influential businessmen ever. "Forbes" considers him the "father of international finance".
Background
Mayer Amschel Rothschild was born into a modest Jewish family in Frankfurt am Main, Germany (then it was part of the Holy Roman Empire). They lived in Judengasse, which was a Jewish ghetto of the city. His father Amschel Moses Rothschild was an owner of a currency exchange and trading goods business. He and Mayer’s mother Schönche Rothschild had eight children. The surname Rothschild can be traced back to 16th century and it derived from the location of the house Mayer’s ancestors occupied in Judengasse (Rothschild means red shield).
Education
At the time of Rothschild’s childhood, the Jews lived in a separate part of the city from Christians. They also faced various restrictions such as the one that they could leave the ghetto at night or on Sundays. They were also banned from visiting public parks and coffee shops. The only option for Rothschild to get his education was heder, a Jewish school, which he entered when he was only three.
He studied the Talmud and the Torah, Jewish sacred books. He also had to read five books of Moses in two different languages – Judendeutsch (a combination of the Frankfurt dialect and Hebrew) and Hebrew. Rothschild also helped with his father’s business, running small errands and sorting different coins.
Rothschild suffered a major family tragedy when an epidemic of smallpox killed his father in 1755 and his mother just a year later. His relatives used their connections and managed to send him to Hanover in 1757 to be an apprentice to Jacob Wolf Oppenheimer, who had his own banking firm. The fact that Oppenheimer was also a Jew helped a lot in securing this apprenticeship. Rothschild learned a lot when it comes to currency exchange and foreign trade. He also became an expert in the field of antique and rare medals and coins. After finishing his apprenticeship, he returned to Frankfurt in 1763.
Career
When Rothschild returned to Frankfurt in 1763, he started working with his brother Calmann, who owned money exchange business. Considering he was an expert in rare medals, coins, and other antiques, he started trading them. This is how Rothschild met Crown Prince Wilhelm of Hesse, who was in line to inherit a huge fortune and become Landgrave of Hesse. Wilhelm had trust in Rothschild to do his business because he also patronized his father.
Rothschild was free to ask to get the title of a crown agent (Court Factor), which he got from Wilhelm in 1769. Except for the fact that it meant he is doing business with royalty, the shield hanging at the door of his house didn’t bring any privileges, so he still needed to stay in Judengasse during the night, Sundays and holidays. However, this was enough for Rothschild to attract numerous important clients to his coin business.
In 1770, Rothschild decided to marry Guttle Schnapper, who was only seventeen at the time. By 1792, they will have ten children together. Things were going great in his private life and in his business, which he expanded to various banking services that he had done for Prince Wilhelm, who in 1785 became the Landgrave of Hesse Wilhelm IX. He also bought a house that had a water pump, which was a big luxury then.
Wilhelm IX became the richest man in Europe and Rothschild had the privilege of doing business with him. His other important asset was Carl Buderus, chief revenue officer of the Landgrave. Rothschild formed a close relationship and secured Buderus big profit from some investments. In turn, he was praising Rothschild in the presence of Wilhelm and this expanded his business with the Landgrave. He also included his sons, Amschel and Salomon, in the firm and soon Rothschilds became a wholesaler of cotton cloth, wool, and flour.
When the French Revolution started and the French occupied Frankfurt in 1792, Rothschild made his first great profit as a military contractor for the Austrian army. He made a deal to supply them with uniforms, wheat, horses, and other various equipment. Napoleon attacked Frankfurt in 1796, setting the Jewish ghetto on fire by accident and destroying a major part of it. This forced the city to allow the Jews to live in the part of the city that was reserved for Christians. Rothschild used this to move all his warehouses to spaces outside the ghetto.
Rothschild started including his sons into the business. Nathan has proved as the most diligent and creative, so he was put in charge of importing wool and other goods from England. The trust that Rothschild had in his son could be best seen in 1798, when he sent him to England to expand the family business, thus opening the first branch of Rothschild business located abroad.
Thanks to a great relationship with Buderus, Rothschild managed to have some kind of a monopoly over international banking. Rothschild’s bank was one of the biggest in the city and he also traded textiles, tea, coffee, dried fruit, colonial and other goods that Nathan acquired in England and then shipped to Frankfurt. Even when Napoleon issued an embargo on trade with England in 1806, Rothschild managed to smuggle it and made great money of selling goods at higher prices.
Nathan received English citizenship in 1804 which enabled him to open a bank in the City of London, making a great profit from speculative stocks. Realizing that his sons are ready to completely take over the business, Rothschild reorganized the firm and made them full partners, in 1810 keeping the deciding vote for himself. It was a good move, as not only they started further expanding the business (French branch was opened in 1811) but it also allowed Rothschild to relax and focus on keeping his deteriorated health in order.
Rothschild was elected to be a part of the Frankfurt Electoral College, even though he was a Jew and some critics tried to stop it from happening. Rothschild died in 1812 in Frankfurt. Today, his company is a worldwide financial corporation with numerous branches across five continents.
Achievements
Founder of the Rothschild banking dynasty
Created a very successful financial business
COnsidered to be the father of international finance
Negotiated equal rights for the Jews from the Jewish ghetto in Frankurt
Religion
Rothschild was proud that he was a part of the Jewish community, which he helped a lot during his life.
Politics
Near the end of his life, Rothschild was granted a seat on the Frankfurt Electoral College. Aside from that, he made sure to keep the rulers and important people close to him and cultivate the relationship with them. He also used his strong position to improve rights of the Jews in Frankfurt.
Views
Rothschild knew how to do business and earn himself a great profit. Whether it’s cultivating relationships, like he has done with Carl Buderus, or being persuasive, like when he insisted on getting official recognition as the crown agent (the Court Factor title).
He was even willing to bend a law a little bit in order for him to come out on top. When Napoleon posed an embargo on trading with England, Rothschild took a great risk and started smuggling the goods. This brought him great profit as he got much higher prices due to the embargo. During Wilhelm’s rebellion against Westphalia, Rothschild’s home was searched. Luckily, he was informed earlier about this event so he moved anything that might be incriminating. The police interrogated him for days and he finally found his way out of it after giving a bribe to the chief of police.
Rothschild didn’t have any formal education but he was an apprentice of Oppenheimer, who was also a banker. He knew about troubles he would come across as a Jew, so he changed his first name to “Mayer” in 1802. He believed this sounded more German.
However, he never forgot that he was a Jew and he has done a lot for his community. He helped to build a modern school for the kids of the Jewish ghetto in 1803. Here the children got a religious education but they also studied German, geography, modern philosophy and natural history.
Rothschild used his strong position to negotiate improving the Jewish rights. In 1806, when the banks rejected him, ruler of Frankfurt Karl von Dalberg turned to him for money. Rothschild accepted to give him loans but demanded the Jews to be given equal rights as Christians in Frankfurt. He didn’t succeed at first but in 1811 the deal went through when Rothschild agreed to pay Dalberg a substantial amount of money for Jews to get their rights.
Personality
Rothschild was a goal-oriented person very devoted to his business. He also took great care of his family, making sure that his sons are included in his business.
Interests
Charity
Philosophers & Thinkers
Moses Mendelssohn
Politicians
Wilhelm IX, Carl von Danburg
Writers
Naphtali Hirz Wessely
Connections
Mayer Amschel Rothschild married Guttle Schnapper (1753–1849), the daughter of Wolf Salomon Schnapper, on 29 August 1770.[10]
Schönche Jeannette Rothschild (1771–1859), married to Benedikt Moses Worms (1772–1824)
Amschel "Anselm" Mayer Rothschild (1773–1855)
Salomon Mayer Rothschild (1774–1855), married to Caroline Stern
See Rothschild banking family of Austria
Nathan Mayer Rothschild (1777–1836), married to Hannah Barent Cohen (1783–1850), daughter of Levi Barent Cohen
See Rothschild banking family of England
Isabella Rothschild (1781–1861), married to Bernhard Juda Sichel (1780–1862)
Babette Rothschild (1784–1869), married to Siegmund Leopold Beyfus (de) (1786–1845)
Calmann "Carl" Mayer (1788–1855), married to Adelheid Herz (1800–1853)
See Rothschild banking family of Naples
Julie Rothschild (1790–1815), married to Mayer Levin Beyfus (1790–1860)
Henriette "Jette" Rothschild (1791–1866) married to Abraham Montefiore (1788–1824)
Jacob "James" Mayer (1792–1868), married to Betty de Rothschild (1805–1886), daughter of Salomon Mayer Rothschild
Spouse:
Guttle Schnapper
Son:
Nathan Rothschild
Rothschild's son was one of his partners in the business. Nathan deserves credit for expanding the business to England.
Daughter:
Schönche Jeannette Rothschild
Son:
Amschel Mayer von Rothschild
Son:
Salomon Mayer von Rothschild
Son:
Nathan Mayer von Rothschild
Daughter:
Isabella Rothschild
Daughter:
Babette Rothschild
Son:
Carl Mayer von Rothschild
Daughter:
Julie Rothschild
Daughter:
Henriette Rothschild
Son:
James Mayer de Rothschild
colleague:
Carl Buderus
He was the chief revenue officer of Wilhelm IX and a great business associate of Rothschild
