The Rothschild Partnership
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In 1810, Mayer Amschel Rothschild (1744-1812) created Mayer Amschel Rothschild & Söhne, with himself, and three of his sons Amschel (1773-1855), Salomon (1774-1855) and Carl (1788-1855) as partners. Mayer Amschel believed that forming a partnership would sustain a strong family business into the future, a belief that proved to be correct.
Two of the five sons of Mayer Amschel Rothschild were not party to the first partnership agreement in Frankfurt, although they signed subsequent agreements. Nathan Mayer Rothschild (1777-1836) founder of the London house, was already in London by 1810, having established the first branch of the family business outside Frankfurt, unable to be present; James (1792-1868), the youngest of the brothers, was too young to sign in 1810 and signed the partnership when he came of age.
Proft-sharing was built into the agreement. Mayer Amschel intended that his sons should share out the profits of the partnership, thus ensuring that the brothers were committed to the well-being of each other and to the partnership as a whole. Although Rothschild women played an important role of providing advice and using their social connections to promote business, the daughters of Mayer Amschel were not able to formally join the partnership to ensure that no sons-in-law could lay claim to a controlling interest in the business. Thus the family name and ownership was protected.
The agreement ensured that the reputation that Mayer Amschel had built up for himself, through a lifetime of innovative trading, could be passed on to the next generation. By remaining true to the principles and rules of the partnership, by developing trusted long-term relationships, and by staying in close communication, the brothers went on to create a business that has remained at the forefront of global finance. By signed agreement, Mayer Amschel bound his male descendants into one Rothschild firm, the partners of which renewed their agreement periodically, simultaneously dividing the combined profits of the firm according to the share allocated to each of the partners. Whilst all adult male members of the family in the five original sites of Rothschild operations were brought within the terms of the partnership agreements, Vienna and Naples were in effect satellites of the Frankfurt bank; in 1831 for example, Salomon refers to forthcoming Russian business as being a partnership deal "with all three houses, Paris, London and Frankfurt." The formal structure of the partnership agreement survived into the twentieth century.
The earliest Rothschild Partnership agreement survives in the Archives of the London bank (see Records of the Frankfurt banking house, 000/231), although Nathan Mayer Rothschild was not a signatory. For many years, the Partnership Agreement of 1810 was retained in the archives of the Frankfurt bank, in the Fahrgasse. On the death of Wilhelm Carl von Rothschild (1828-1901), the last head of the Frankfurt bank, in 1901, Joseph Nauheim, a senior clerk at the London house, managed the liquidation of the Frankfurt business on behalf of Nathaniel, 1st Lord Rothschild. Most of the records of the business were destroyed; it is believed that the Partnership Agreement of 1810 (together with later Partnership documents) was one of the few documents taken back to London by Nauheim. See the records of the Frankfurt house for further information about these documents.
In view of the close business ties between the members of the family, which continued even after the formal links were dissolved in 1909, the London Archive offers a good insight into the workings of the firm as a whole. Joint accounts can be found within the records of the Accounts Current Department, and some entries have been noted in the descriptions of the series in The Guide. The private correspondence of the partners received by the London house is extremely detailed and reveals much about the intricacies of business as well as brotherly tensions.