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American Department

The first established links between N. M. Rothschild and the United States date back to 1821 when the bankers R. & J. Phillips in Philadelphia became agents for NMR business in the USA. Phillips were the first in a series of agents who were used to develop NMR's business interests in the country and correspondence from them can be found among the records of the Correspondence Department.

From the Bank's accounts it is clear that by the end of the 1830s substantial and wide-ranging investments had been made in municipal and State stock, in canal and mining shares and in finance houses. The main activities carried on through the agents were in the fields of bullion and bills of exchange.

In 1833 NMR entrusted the New York banking house of J. L. & S. Josephs & Co. with the representation of its business interests in that city. The firm worked in conjunction with R. & J. Phillips.

In the following year, 1834, NMR succeeded in obtaining the business of undertaking the United States Government's banking interests in Europe, hitherto in the hands of Barings. The Rothschilds represented the U. S. Government until 1843, when John Tyler became President and Barings' ally Daniel Webster was appointed Secretary of State. Webster promptly restored the accounts from Rothschilds to Barings.

The disastrous New York banking crisis of 1837 saw the failure, along with many other banks, of the Rothschilds' New York agents J. L. & S. Josephs. This coincided with the arrival in New York of August Belmont, a confidential clerk employed by the Frankfurt Rothschilds. Though on his way to Havana on behalf of the London and Paris Rothschilds to investigate the affairs of the Spanish Government, on discovering the crisis in New York, Belmont turned his attention to sorting out Rothschild interests there. He quickly realised the potential of New York's growing economy and suggested that the Rothschilds appoint him as their agent in New York. The firm of August Belmont & Co. acted in this capacity until 1925.

The discovery of gold in California in 1848 awakened NMR interest, given the Bank's substantial involvement in bullion trading. A second important Rothschild agency in the USA was rapidly established in San Francisco in 1849 by Benjamin Davidson and John May. The connection persisted until the impact of the gold rush had diminished. Letters from the American agents are mainly filed within the Correspondence Department.

As far back as 1839, NMR had been involved in the business of raising finance for the U. S. Federal Government and its institutions. In that year, NMR, together with the Paris house of de Rothschild Frères, contracted for a £900,000 loan to the U. S. Bank.

It was, however, in the 1870s that the Bank's involvement in this area was at its fullest. In 1872, NMR raised a $15 million bond issue for the City of New York to finance municipal improvements and in the following year, with Baring Brothers, raised a 5% funded loan for the US Government for a massive $300 million. A loan of equal size was raised in 1876, this time in conjunction with J. S. Morgan & Co. and Seligman Brothers and in 1877 a further $700 million, with these same partners, together with Rose & Co.

The last major issue raised on behalf of the Federal Government was for $62 million, in 1895, with J. S. Morgan.

The scope of the records in the American Department is wider than the name suggests. Rothschilds' non-European business interests, in Australia, Mexico, China and India, were dealt with by the American Department.