FREE ESSAY ON ROTHSCHILDS

ROTHSCHILDS

The Vienna branch of the Rothschild banking consortium was established by Salomon
Rothschild in 1815, after the end of the Napoleonic Wars. His brother Carl established
the Naples branch only a few years after him. The biggest struggle that the Rothschilds
faced during these early years was acceptance. Anti-Semitism kept them out of the elite
social circles, necessary realms of connection making, and thus hindered business. This
was especially felt in Vienna and Naples.
Salomon wasn't even able to buy a home in Vienna until 1842, as there were laws
forbidding Jews from owning property within the Imperial capital. Through his wealth
alone was he able to receive an exemption from this rule. He and his brother Carl in
Naples were hesitant to purchase much real estate, though, for fear of the anti-Semitic
backlash which it might incur, since real estate was seen as a sign of aristocracy.
The Rothschilds frequently found themselves left off of the guest lists of influential
balls. They countered this by throwing their own balls, which, by their extravagance
alone, eventually attracted the clientele they were after. It wasn't until the late
1830's that senior government officials such as Metternich and Gentz would dine with
Salomon. Once they established themselves, however, they became less cautious in hiding
their blithe disregard for social rank. 
They detested such events, but held them for their business worth only. Salomon was
especially known for his disapproval and extravagance. He was also known to eat too much,
drink too much, to be rude, to surround himself with sycophants, and for having a
lecherous passion for very young girls. He felt he was uneducated, an opinion of him held
at the time by many other social and political elites, and thus he tried to refrain from
social events as much as possible. The family's social efforts, trying as they were, did
pay off though. Francis I made all of the brothers Barons, if for no other reason than
for the fragileness of the Metternich regime and the vast influence of the Rothschilds.
Salomon and Carl went about making their money in much the same way as their brother's.
Wars meant profits for them, however it was peace and stability that they desired. They
continued in international business dealings, but moved more into government securities,
insurance company stocks, and shares in industrial companies, adopting fully to the
industrial revolution with their investments in railways, mining, and other such
industries.
The droughts of 1846 and 1847, and subsequent food shortages, led the Rothschilds into
their most trying time. The money markets of Europe were showing instability, and Austria
was no exception. As trouble began brewing on the Viennese market, Metternich urgently
requested that Salomon contrive some plan which would ward off the impending crisis. By
September of that year, it seemed that Salomon had succeeded in averting an "immeasurable
calamity." However, that feeling did not last long.
The growing unrest in central Europe called for more and more money to maintain order.
Metternich turned to Salomon as the key source of this money. The largest of which was a
loan of 80 million gulden to be paid over five yearsgranted by Salomon along with several
other banking houses. With all of the disturbances in the market caused by the food
shortage, Salomon was happy to have any business at all, even though he had over-drawn
the Vienna house by over twice as much of its actual capital. He believed, however, that
the Frankfurt house would temporarily make up the difference.
This decision was made on his own, without consulting the other houses, who had doubts
about the arrangement. Their doubts proved justified, as the loans became to be one of
Salomon's greatest errors. The endeavor might have been profitable if five years of peace
and prosperity in Europe had at least been probable. 
The money was supposed to be for railroad investments, but was known to really be for
putting down insurrections, in Lombardy and Venetia primarily. The government's credit
was already questionable at best, and became weaker and weaker as unrest grew and the
money necessary to quell the various uprisings increased. The Austrian budget rose 30%
between the years 1842 and 1847. Metternich didn't care however, and continued to request
or even demand more money from Salomon, having confidence that the uprisings would pass.

Salomon, along with the rest of the Rothschilds, had vested interests in keeping the
standing regimes in power. This was not necissarily because they were in favor of the
politics of those governments but rather because they had so much money invested in these
governments, for which there was no garuntee that they would be repaid by a revolutionary
government. They did not like the idea of revolutions establishing republics or socialist
economies either, as their wealth was based on capitalism. Thus, Salomon was even more
willing to keep Metternich in power. 
The Rothschilds and Metternich, who was known to them as "uncle," also had a long and
close past. In addition to handling the finances of Metternich, who had little family
wealth of his own, they also collaborated closely with Metternich's administration
through financial, political, and diplomatic networking being exchanged in both
directions. The courier system of the Rothschilds was a key element to this, as well as
access to their various influential clientele. They were also known to extend risky loans
to key political figures in order to keep up good ties. Thus, the Rothschilds were seen
by the nationalists as the paymasters of the established regime, as without the
Rothschilds they would not have had the funds necessary to hold power. By 1848, the
Rothschilds were much more closely identified with the regimes than in 1830.
Salomon also attempted to stabilize the Austrian market by bailing out the Eskeles House.
The Eskeles House was another prominent banking house in Austria, that Salomon had acted
in partnership with previously, and also owed 1 million gulden. A domino effect of banks
closing had begun in Frankfurt, with the Haber House in 1847, and Eskeles seemed next.
Salomon felt morally bound to bail them out and stop the crash. Again, without consulting
the other houses, Salmon extended credit to the Eskeles House.
On March 14th, Metternich resigned, after crowds clashed with troops in Vienna. The
collapse of the Hapsburg authority set off a chain reaction of unrest throughout Europe,
and outright revolt against Austrian rule in Venice and Milan. Salomon soon found himself
straddled with large quantities of metallique stock, the debt of bailing out Eskeles, and
many government securities whose values had dropped significantly, and the greater part
of his assets in industrial shares, which the revolutions had rendered unsellable. A
small feud insued between the houses, as Salomon owed so much money to Frankfurt. Amschel
in Frankfurt was also partly o blame as it was he that allowed Salomon toover extend
himself so much.
Salomon's son Anselm came down to Vienna from Frankfurt in 1848 to take over, to the
casualty of the relationship with his father. This marked the end of the dominance of the
second generation, and was itself a revolution within the house. The burden of the crisis
rested on the shoulders of the Naples, Frankfurt, and especially London branches of the
family, as they were less affected by the revolutions. Luckily for London, the Revolution
never spread to England, most directly because of the repeal of the Corn Laws and the
suspension of the Bank Charter Act in 1847. Naples didn't have as much of a loss as
Vienna because the revolution was a complete failure in Naples, unlike other places in
Italy such as Sicily. They were therefore able to send money to bail out their less
fortunate siblings. It was the family unity that Mayer Amschel instilled in them that
allowed the Rothschilds to survive.
Their survival was also aided by the relaxation of monetary policies of the European
central banks. In Vienna the national bank imposed a ban on silver exportsand, in May
1847, suspended convertibility. There was also a strong threat of too much paper money
entering circulation without enough specie backing, which would lead to inflation. The
Rothschilds luckily had access to silver in America and in England, which was crucial to
enabling them to replenish the countries reserves. Their skill as bankers also allowed
them to survive, as the were able to negotiate and bargain with the Austrian Treasury, to
which they now owed large sums of money, to allowed them to postpone payment; a situation
similar to that in Naples.
They did not fear the bloodiness of the Revolutions nearly as much as of their own purses
bleeding. Throughout this whole period, Salomon stayed in Vienna, despite much cause for
fear. Rothschild properties were singled out for attacks, especially during the June
Days. They were also threatened in the nationalist presses with confiscation of property
if wages weren't raised and conditions improved. 
In Naples, Carl, Nat, and Adolph were much more nervous as anti-Semitism there was felt
more heavily. Throughout Europe, anti-Rothschild sentiment grew, as material inequality
rose, despite the family's efforts to counteract this feeling through various
philanthropic measures. Before 1830, donations were made primarily to Jewish causes
alone, but thereafter were made to causes that the Hapsburg elite approved of. In 1835,
for example, Salomon offered to build an aqueduct to counter drought from the Danube to
Vienna. In 1838, he gave financial assistance to victims of river floods. He also gave
financial assistance to victims of fires that ravished Hamburg in 1842. However, all
these philanthropic acts could not seal the divide between rich and poor. The poor knew
all too well that the Rothschilds were in no way suffering as they were. Although the
family which before the Revolutions had more wealth than the bank of England lost the
better part of that fortune thereafter, they were in no way poor. In 1847 for example, in
the midst of an economic slump, they were still able to build, with immense amounts of
money, a lavish new office in the Renngasse. 
The House continued to grow after the 1850's, expanding their markets and investments.
However, it no longer enjoyed the unchallenged position it held previously. Joint stock
banks and deposit banks proved a strong threat to the Rothschild system. The weaker
Naples branch was dissolved in 1861. The Vienna branch, survived the competition however,
and remained until the German invasion of Austria in 1938.