New century, new leadership, 1905-1939
In 1905, on Alphonse’s death, his son, Edouard (1868-1949) assumed control of the business. By the First World War, the House of Rothschild had split into independent entities, each in its own country, and after 1918, each chose its own course. London became a merchant bank, financing loans to industry through acceptances which they underwrote, at the same time as acting as financial advisor, intermediary and promoter. Paris, on the other hand, was narrow and provincial as a financial market. The French Bank dealt with government often without commission. After 1918 a new world appeared, marked by inflation and monetary erosion, and a private institution could no longer be the banker of governments as the Rothschilds had been during the previous century.
In 1931, Edouard’s son Guy (1909-2007) joined the French bank as apprentice. In 1934, on the death of Edmond de Rothschild, his son Maurice (1881-1957) inherited a third of the business, and was later bought out by his cousins Edouard and Robert (1880-1946). In his memoirs, Guy recalled that ‘de Rothschild Frères was more of a family secretariat than a working bank. It maintained, at great expense, a limited number of personal accounts and felt morally obliged to underwrite a certain portion of each new government loan but this was the extent of its banking activities. But its reputation remained intact – recognition of integrity and stability.’.