de Rothschild Frères, Paris
In 1760 Mayer Amschel Rothschild (1744-1812) took over the commercial and coin dealing business which his father had started in 1750. Financial responsibilities for the account of the Royal household of Hesse were soon added to trade in cloth, wine and spices. Nathan Mayer Rothschild (1777-1836), Mayer Amschel's third son left Frankfurt for England in 1798. He made his first home in Manchester, establishing a cloth wholesale business. Encouraged by his success, Nathan moved to London to establish himself as a banker, founding N M Rothschild at New Court, St Swithin's Lane in the City in 1810. Nathan's increasingly successful business provided a model for his brothers back in Frankfurt.
James de Rothschild moves to Paris
Taking advantage of the door which Napoleon, despite the Continental blockade, had left open in order to ensure certain financial and commercial links with England, Amschel’s youngest son, James, went first to the small port of Gravelines in Northern France. From 18811, he was in Paris, co-ordinating the purchase of specie and bullion for his brother Nathan (1777-1836). Between 1814 and 1815 he was the lynchpin in Nathan’s plan to supply Wellington’s armies with funds.
Originally trading as J M Rothschild, in 1817, James established a permanent business in Paris, under the corporate name of de Rothschild Frères with his brothers as partners. By 1823 the Paris House was firmly established as banker to the French government. After the death of his brother Nathan in 1836, James took over the reins of the family firm and became the trusted adviser of ministers and kings. The Paris House continued to fund many loans to European governments, but the decline in public sector borrowing led James to concentrate on new lines of business. From the traditional products of international commerce, such as corn and cotton, the house began to extend its interests to other products. This began with development into the commodities of gold and silver, together with the products used in refining, in particular, quicksilver, and quickly grew to encompass the financing of raw materials trading, railway construction and manufacturing industries.
This diversification was continued when James’ sons, Alphonse (1827-1905), Gustave (1829-1911) and Edmond (1845-1934), became partners in the bank. The French House continued to fund and build railways, playing a major role in the development of the French and European rail network. However, of greatest significance was the loan to the Tsar of Russia in return for a petroleum concession in Baku. This concession was so large that the Rothschilds quickly became the chief competitors of Rockefeller’s company, Standard Oil. By the 1890s, the Paris house had reduced its mercantile business and took an important role in the creation of several great industrial companies with railway, mining and metallurgy concerns. At the same time, the firm participated in large public credit operations. The bank’s industrial concerns continued to play a major role throughout the twentieth century, although in 1912 the French Rothschilds interests in Russian oil were sold in exchange for shares in the Royal Dutch and Shell oil companies. The sale prevented the loss of their assets in the wake of the Russian Revolution of 1917.
The twentieth century
After Alphonse' death in 1905, his son Edouard (1868-1949), took over the firm. The return to business in 1944 was made difficult both as a result of despoliations during the war and the new legislative changes which affected the banking sector. The House of Rothschild adapted to these new conditions, choosing to renew the banking activities which it had somewhat abandoned, alongside its traditional role as financier. In 1949, Guy de Rothschild (1909-2007) took over from his late father. Following French government reform of banking regulations, de Rothschild Frères became Banque Rothschild, a limited-liability company in 1967. Banque Rothschild was created on January 1st 1968, functioning as a deposit bank. In 1969, Guy de Rothschild was the chairman; Alain de Rothschild (1910-1982) and Elie de Rothschild (1917-2007) were vice-chairmen and cousin Evelyn de Rothschild was on the board. At Easter 1970, a new modern bank building was inaugurated at 21 rue Laffitte, Paris. As the only remaining Rothschild houses, the London business, N M Rothschild & Sons Limited and Banque Rothschild began increasingly to undertake joint ventures.
Between 1981-1982, Banque Rothschild, was one of 39 to be nationalised by the French government, and the Rothschilds were obliged to leave the rue Laffitte, which had been the base of the Paris house since Baron James's days. The bank founded by James de Rothschild as de Rothschild Frères became Compagnie Européenne de Banque. But with nationalisation, Rothschild banking was not at an end in France. Following nationalisation of the business, the former Directors of Banque Rothschild, David and Nathaniel de Rothschild and Jacques Getten set up P.O. Gestion as banking operation. In October 1986, the Rothschild family were granted the right to use family name again, as Rothschild & Associés Banque. In January 1992, David became deputy chairman of N M Rothschild & Sons Limited, before succeeding Sir Evelyn de Rothschild as chairman of Rothschild in 2003; today the business is called Rothschild & Co.