Rothschild · 1798
The young Rothschild arrives at Manchester
In the third week of October 1798, on the wet autumn evening of the eighteenth of October, the twenty-one-year-old Frankfurt-Judengasse textile-trader Nathan Mayer Rothschild, third son of the Frankfurt court-banker Mayer Amschel Rothschild, alighted from the coach from Hull on the cobbled forecourt of the Bridgewater Arms coaching-inn in High Street, Manchester, with a small leather travelling-trunk, a banker's draft for the equivalent of approximately twenty thousand pounds in his coat pocket, the small private cipher his father had instructed him to use in correspondence between himself and the family bank at the Judengasse, and instructions from his father to establish a small cotton-and-textile export business at Manchester on the family's behalf. He spoke at the moment of arrival a few sentences of English (the language he had been taught by a private tutor at Frankfurt across the previous six months under his father's instruction), no Lancashire-dialect Manchester English (which he would acquire across the next eighteen months on the warehouse floor), no contemporary contacts among the Manchester cotton-merchant establishment (the small but powerful community of Manchester-Quaker and Manchester-Nonconformist cotton-merchant houses that controlled the spinning-and-weaving export trade), and the standing personal direction that he was to settle into the Manchester cotton trade as a junior independent merchant on the family's capital and develop the business across the next several years. He set up the small cotton-trading office at 25 Brown Street in the central Manchester warehouse district within three weeks of arrival, took the first wholesale cotton-purchase order at the Manchester Royal Exchange on the eighth of November 1798, and across the next decade built from the small Brown Street office the largest single textile-export business in the north of England, the foundation of the modern Rothschild international business that he would relocate to London in 1809 to establish NM Rothschild & Sons at New Court.
A business empire is rarely founded on a twenty-one-year-old man arriving at a coaching-inn in Manchester on a wet October evening with a banker's draft, a leather trunk and approximately a hundred words of English. The Rothschild family at Frankfurt in the autumn of 1798 was a substantial-but-not-yet-extraordinary central-European Jewish banking house, with the senior court-banking position to the Elector of Hesse-Kassel and the standing Jewish-quarter business that produced the modest family income. The third son who got off the coach at the Bridgewater Arms had been given the standing instruction by his father to build something new.
THE JUDENGASSE
Nathan Mayer Rothschild was born on the sixteenth of September 1777 in the small five-storey house under the sign of the Red Shield in the Judengasse of Frankfurt-am-Main, the narrow walled Jewish ghetto-street that ran between the Old Town and the Frankfurt city walls. He was third of the five surviving sons of Mayer Amschel Rothschild and Gutle Schnapper. The Judengasse was the standard early-modern Central European Jewish ghetto-condition: approximately three thousand residents in approximately a hundred and ninety small terraced houses on the single street, with the standard early-modern Imperial-Jewish restrictions on residence, marriage, occupation and movement (Jews could not own land outside the Judengasse, could not enter most professional trades, could not enter the Christian-only Frankfurt patrician guilds, were required to pay the Imperial Jew-tax at twice the Christian rate, were required to take off their hats when passing a Christian-Frankfurt patrician on the street, and were required to be within the Judengasse walls by curfew every evening).
Mayer Amschel had been the dealer-and-supplier of antique coins and curiosities to the Hesse-Kassel court of Wilhelm IX since the 1760s, and from 1789 the principal court banker handling the substantial Hesse-Kassel financial reserves (the Hesse-Kassel reserves were among the largest concentrated private fortunes in central Europe of the period, on the strength of the Hesse-Kassel subsidiary-troop-rental income from the British government for the Hessian regiments serving under British command in the American Revolutionary War). Mayer Amschel had decided in the mid-1790s, on the strategic foresight that the next century of European banking would be dominated by international-and-cross-border financial flows rather than by the existing single-court banking arrangement, that the family would establish branch operations across the leading European-and-imperial financial centres.
THE FIVE-BRANCH STRATEGY
Mayer Amschel sent his five sons across the late 1790s and early 1800s to the five centres he had identified as the leading future banking-and-commercial-cities of nineteenth-century Europe. The eldest son Amschel Mayer remained at the Frankfurt-Judengasse headquarters to manage the family's central German operation. The second son Salomon Mayer was sent to Vienna in 1800 to establish the Austrian branch under the Habsburg court. The third son Nathan Mayer was sent to England in 1798 to establish the British branch. The fourth son Carl Mayer was sent to Naples in 1810 to establish the southern-Italian branch under the Bourbon court at Naples. The fifth son James Mayer was sent to Paris in 1812 to establish the French branch under the Napoleonic and (from 1814) Bourbon-Restoration government.
The five-branch strategy was the central single business-architectural innovation of nineteenth-century international banking. The five branches were structured as independent partnerships but were coordinated through the standing intra-family correspondence (carried by the famous Rothschild private-courier network, the fastest mail-system in Europe through the first half of the nineteenth century, faster than the official government posts of any European state) and through the standing capital-pooling-and-risk-sharing arrangement Mayer Amschel had set down in the family articles of partnership. The five branches together gave the Rothschild family the unique single-family ability through the early nineteenth century to execute international financial transactions across the leading European financial centres in days rather than the weeks-and-months required by the standard non-family banking houses of the period.
THE LANCASHIRE TEXTILE TRADE
Mayer Amschel selected the English textile trade as the entry-business for the British branch on the calculation that Manchester-cotton-and-Yorkshire-wool textiles were the leading single industrial export of late-eighteenth-century Britain (the Lancashire cotton spinning-and-weaving industry, on the strength of the Arkwright water-frame and Cartwright power-loom innovations of the 1760s-and-1770s, was approximately ten times the size of the equivalent French-and-German textile trade by 1798, and was the foundational engine of the early Industrial Revolution), and that a Frankfurt-based Jewish merchant house with established central-European-and-continental distribution channels would have a strong commercial advantage in the export of Manchester cotton textiles to the German-and-central-European markets that were not effectively served by the existing London-broker arrangements.
Nathan was given the family standing capital of approximately twenty thousand pounds (about three million pounds in modern money) for the initial operation, the standing instruction to develop the cotton-and-textile export trade across the next several years on his own commercial judgement, and the introduction-letter to the Frankfurt-Manchester merchant Levi Salomons (a small Frankfurt-Judengasse merchant family with existing Manchester connections through the cotton trade). He sailed from Hamburg to Hull on the small Hanseatic packet-boat Friede in the second week of October 1798, took the coach inland from Hull to Manchester across the eight-day journey via Leeds and Halifax, and arrived at Manchester on the eighteenth of October 1798.
BROWN STREET
He took rooms at the Bridgewater Arms coaching-inn at High Street for the first three weeks (the standing-and-traditional Manchester-merchant temporary accommodation for arriving commercial agents) while he located the permanent business premises. He took the lease of the small first-floor office at 25 Brown Street in the central Manchester warehouse district on the eighth of November 1798 at the standard Manchester warehouse-office rate of approximately forty pounds per year. The Brown Street office was three minutes' walk from the Manchester Royal Exchange (the central single commercial-trading floor of the late-eighteenth-century English textile industry, where the Manchester cotton-merchants and the Yorkshire-wool-merchants met daily at noon to transact the wholesale trade) and approximately ten minutes' walk from the small Jewish community of the Halliwell Street area (the small German-Sephardi-and-Ashkenazi community of approximately three hundred Manchester Jews who provided the social-and-religious community for the small Manchester-Jewish merchant-class of the period).
He took the first wholesale cotton purchase order at the Manchester Royal Exchange on the eighth of November 1798, three weeks after arrival. The order was a small consignment of about forty bales of finished Lancashire calico to a Frankfurt-Judengasse-correspondent merchant for the central-German market. He took the second order the following week. By the spring of 1799 he was conducting approximately one hundred and twenty bale-orders per month through the Brown Street office. By 1801 he had outgrown the Brown Street office and had relocated to the larger warehouse-and-counting-house at 26 Mosley Street in the central Manchester commercial district. By 1803 he was the leading single textile-export merchant in the north of England, with operations running to approximately five thousand bale-orders per month at the peak of the Continental-blockade period of the Napoleonic Wars (the British Orders in Council of 1806 and the Continental System of 1806 created the asymmetric trade-conditions on which the Rothschild Manchester-to-Continental smuggling-and-routing business made the substantial profits that would fund the next phase of the family operation).
THE PIVOT TO LONDON
He pivoted from Manchester to London in 1808 in his thirtieth year on the strategic calculation that the Napoleonic-war financial-and-currency operations were the next major commercial opportunity, and that the London financial centre was the only English commercial location from which the international-currency-and-loan business could be conducted at the required scale. He moved the family-bank operation from Manchester to London in late 1808 and 1809, took the lease of New Court in St Swithin's Lane in the City of London in 1809, established NM Rothschild & Sons at New Court on the formal partnership-incorporation of the first of January 1810 in his thirty-second year, and built the New Court business across the next twenty-six years to the position of the leading single financial house in the London market by 1830. The Wellington-Peninsular Army financing operation of 1814 to 1815 and the Waterloo intelligence-and-trading episode of June 1815 (which the second Rothschild legend on the family page records) sit at the centre of the subsequent New Court history. The Rothschild name in modern international finance carries the weight of the wet Manchester October evening of 1798 and the eighteen Manchester years that built the foundation of every subsequent Rothschild-family commercial achievement.