Nathan Rothschild: Reputation that Can Avert a Crisis

Nathan Rothschild was a London-based Jewish financier and banker. He belonged to the Rothschild family who was known to have established a dynasty in the banking industry at one point in time. Rothschild was born on September 16, 1777 in Frankfurt am Main. At 21 years old, Rothschild moved to Manchester where he engaged in financing and textile trading. Later, he settled in London where he traded bills of exchange. This was the beginning of Rothschild’s huge banking enterprise.

The Emperor of Austria granted two of Rothschild’s older brothers with the noble status of Baron in 1816. Two years later, Rothschild also got the same noble status. They were granted permission to attach the prefix von or de to their family name. Rothschild was then known for his aristocratic name Nathan Mayer, Freiherr von Rothschild.

After his short venture in textile business, Rothschild started dealing government securities and foreign bills in the London Stock Exchange in 1804. He moved to dealing gold bullions in 1809. This became the cornerstone of his banking business. When Wellington’s troops went to campaign against Napoleon in Spain and Portugal, Rothschild negotiated with Commissary-General John Charles Herries to transfer money for the troops. Later, he also got permission to send his subsidies to the British allies during Napoleon’s campaign in Russia.

With the help of his four brothers, Rothschild coordinated the activities in across the entire continent which helped the Rothschild family develop a network of couriers, shippers and agents that transport gold and information across Europe. By functioning as a private intelligence, Rothschild was privileged to receive news in London about Wellington’s triumph in the Battle of Waterloo one day ahead of the official government messengers.

In 1818, Rothschild arranged a loan to the Prussian government worth £5 million. He also issued government bonds which later became a mainstay in his banking business. Rothschild gained such a reputation that during a liquidity crisis, he supplied coins to the Bank of England which averted the crisis.

Rothschild got an infected abscess which caused his death on July 28, 1836. At the time of his death, his fortune was estimated to be worth 0.62% of Britain’s national income.