Quicksilver loans business
Quicksilver - or mercury - was of particular importance to the Rothschilds in the nineteenth century, yielding considerable profits for them and performing a vital role in the refining of gold and silver. There were only two places in Europe where quicksilver was produced - Idria in Austria and Almadén in Spain. The Rothschilds purchased the mines at Idria, close to Trieste, which had been discovered in the fifteenth century, from the Austrian government in the first half of the nineteenth century. Nathan Mayer Rothschild (1777-1836) sought successfully to obtain the concession of the other rich source of quicksilver, the Almadén mines in the 1830s.
By holding the monopoly on quicksilver production in the 1830s and 1840s, the Rothschilds were in a commanding position to fix the price and ensure a key hold on the refining of precious metals worldwide. This situation continued throughout the century and into the next, ending in 1922 when the decision was made to terminate their quicksilver business in the face of stiff Italian competition.
The Almadén quicksilver mines in Spain were discovered by the Romans and were worked by subsequent invaders of southern Spain. From 1645 they were worked and owned by the Spanish government. However, by 1834, the Spanish government had decided to auction the right of working the Almaden mines in the hope that an injection of foreign capital would increase productivity. Nathan Rothschild was attracted by the prospect of obtaining the concession to the Almadén mines as this would guarantee him the monopoly on quicksilver production and give him the ability to control the price of the metal. He sent his son, Lionel (1808-1879), to Madrid to bid for the rights.
The Spanish government awarded the contract to the Rothschilds when they not only bid higher than anyone else, but also they offered to lend the Spanish government 15 million francs at a low rate of interest. Spain was in dire need of financial assistance owing to its civil war and maladministration. An agreement was signed on 21st February 1835 by Lionel de Rothschil;d (1808-1879) and the Spanish Finance Minister, Count Jose Maria Toreno. To mark the occasion, Lionel was made a member of the Order of Isabella the Catholic.
Quicksilver yielded a very considerable profit for the Rothschilds and was an important component in their business in the nineteenth century. In 1850, the contract was renewed. Quicksilver became of even greater significance to the Rothschilds after 1852 when they secured the lease on the Royal Mint Refinery. Quicksilver was at the time, essential to the refining process. However, new techniques in precious metal refining and the growth of competition from the Italian quicksilver mines led to a disinclination to continue their arrangement with the Spanish government after 1922.
For papers concerning quicksilver refining see Bullion Department: Quicksilver. For correspondence with Rothschild agents see records of the Correspondence Department. For sundry NMR papers concerning the Spanish quicksilver contract, 1912-1931, see 000/474.
Spanish Quicksilver loan 1870, contracts and sundry papers, 1870
000/374, 1 box
Papers and contracts concerning the Spanish Quicksilver Loan, 1870.