The House of Rothschild (77 page)

Churchill’s biographer Roy Foster suggests that the Rothschilds did indeed help place the new company’s shares. Contemporaries also assumed that Churchill’s decision to annex Burma—announced on New Year’s Day 1886—was linked to his growing intimacy with the Rothschilds. As Edward Hamilton observed sardonically, “Jingoism is ... popular so long as it brings profit.” Certainly, they applied to take over “all Burmese railways and construct lines to the frontier” within a week of the annexation being announced, Churchill assuring Salisbury that they were “as keen as nuts.” The fact seems to speak for itself that in 1889 the Rothschilds were responsible for the immensely successful Burma Ruby Mines share issue—when the throng of would-be subscribers grew so large that Natty reputedly had to climb up a ladder to get into the bank, and the shares went to a 300 per cent premium. Did not Brett tell Hartington in 1886 that “Churchill and Natty Rothschild seem[ed] to conduct the business of the Empire in great measure
together,
in consultation with Chamberlain”? Did not Hamilton later observe (to Rosebery) that what had got Churchill “into trouble” was his “excessive intimacy” with “a certain financial house”? And did not Lady Salisbury “launch out” in conversation with Herbert von Bismarck and Rosebery “against Randolph who communicated everything to Natty Rothschild” and “hint that people did not give great financial houses political news for nothing”? The evidence of an excessively close relationship seems compelling, especially in view of the precariousness of Churchill’s personal finances. As is now well known—though his earlier biographers suppressed the fact—he died owing the London house “the astonishing sum of £66,902,” though he had also made some money on mining shares by following Rothschild advice.

Yet on closer inspection it seems that Churchill’s stints at the India Office and the Exchequer were of only limited importance to the Rothschilds in their capacity as bankers and, equally, that their importance to Churchill as his bankers only really mattered after he had left office. The Burma Ruby Mines issue was for just £300,000 and it came out four years after Churchill had ended his brief tenure at the India Office. Similarly, it was not until 1896 that the Rothschilds issued £2 million of shares in Burmese railways; their initial approach to the Indian Finance Committee ten years before had been rejected. At the Exchequer in Salisbury’s second government, Churchill sought their advice on financial policy (appointing Natty to a commission to enquire into public expenditure). But it is not easy to represent Churchill’s ultimately self-destructive and ultra-Gladstonian opposition to military expenditure as in any way beneficial to Rothschild interests: indeed, his views on Egypt and monetary policy rapidly diverged from those of Natty. Nor were the Rothschilds involved in his fateful decision to resign in December 1886. When Reginald Brett asked if he could tell Natty the news, Churchill “said no, because he is furious with Alfred Rothschild, who it appears is talking strongly against him. ‘He complains that I did not consult the Rothschilds. After all I am glad to have them as friends, but I am not yet Rivers Wilson and am not yet in their pay.’ ” To Natty, Churchill’s resignation seemed a mere “freak of temper,” though Churchill himself insisted that it was “a simple miscalculation ... that he did not know that Salisbury had ‘the king up his sleeve,’ in other words that he was ready to fill up the vacancy by appointing Goschen.”

As that suggests, it was only after he had left office that he began to borrow large sums from the family: up until 1888 his overdraft was just £900 and it was not until 1891 that it ballooned to £11,000. Although Natty continued to encourage Churchill to believe that he might one day return to office, it is unlikely, in view of the former Chancellor’s increasingly erratic behaviour, that he sincerely believed this himself. As Edward Hamilton put it in August 1888, “R. Churchill turns to N. Rothschild for everything ... but Rothschild, who is R.C.’s chief mentor, is giving R.C. up as a hopeless politician.” Indeed, it seems right to regard Natty’s bankrolling of Churchill after 1886 as primarily an act of friendship as syphilis inexorably took its toll; for politically and financially he was now more a liability than an asset. The loose cannon went off again in 1891 when Churchill returned from a Rothschild-assisted expedition to Mashonaland only to denounce publicly the region’s economic prospects—a gaffe which infuriated Natty, as we shall see. It was less calculation than kindness to the increasingly pathetic Churchill which prompted the Rothschilds to take an interest in the career of his ambitious son, though no doubt they were gratified when young Winston opposed the Aliens Bill in 1904 as Liberal MP for Manchester.

The case of Rosebery could hardly be more different, though similar questions arise about the extent of Rothschild influence. Was it politically significant that the man who was served as Foreign Secretary in Gladstone’s third and fourth ministries and succeeded him as Prime Minister in 1894 was married to a Rothschild? As with Churchill, some contemporaries thought so. “It is not nice at this juncture,” the Liberal periodical
Justice
commented after Gladstone’s visit to Tring in September 1893, “when the foreign secretary is closely connected by marriage with the same intriguing [sic] financial house, to see Mr Gladstone hobnobbing with Lord Rothschild.”

There is no question that, almost from the moment he married Hannah, the more political members of the family took an interest in Rosebery’s career. In September 1878—just six months after the wedding—Ferdinand revealed to Rosebery the extent of this interest:

In the case of Churchill, private financial ties really came after his time in office; in the case of Rosebery, however, they came before it. In November 1878 Ferdinand suggested to Rosebery: “If you have a few spare thousand pounds (from £9-10) you might invest them in the new ... Egyptian loan which the House brings out next week.” A letter from Natty of 1880 sheds further light on the kind of “good advice about investments” Rosebery was receiving from his in-laws. “I am happy to say,” he wrote archly, “I never know before hearing what the Ministers are going to do. I can only tell you that I bought 100,000 for New Court today and I s[houl]d. advise you to tell Mr May [either Rosebery’s broker or a Rothschild clerk] to pay for yours.”

This might seem to explain why, when Gladstone offered him the post of Commissioner of Works and a seat in the Cabinet as Lord Privy Seal in 1884, Rosebery initially refused. Citing the impending decisions to be taken by the government regarding Egyptian finance, he told Granville: “You can guess the extreme delicacy of my relation to that question, for although I am not a member of the House of Rothschild, I am allied to it as closely as possible by kinship and friendship, and I feel therefore strongly the difficulty of entering the Cabinet at the moment . . .” Yet when the murder of General Gordon persuaded Rosebery to accept Gladstone’s offer, neither he nor the Rothschilds made any effort to break off their financial relations. In the fortnight after he joined the government, he saw members of the family on at least four occasions, including two dinners with Natty. And in August 1885, only two months after Gladstone’s resignation had temporarily removed him from office again, Rosebery was allotted £50,000 of the new Egyptian loan issued by the London house. Interestingly, “in accordance with [Rosebery‘s] wishes the Egyptian money [was] paid into the Bank to the credit of Hannah.”

The pattern repeated itself when Rosebery became Foreign Secretary in 1886. This time it was Natty who expressed public reservations, telling Reginald Brett in January that Rosebery was “out of the question” as a possible Liberal Foreign Secretary “owing to his connection with the House of Rothschild.” Over dinner at Gunnersbury in 1887, he baffled Edward Hamilton—who had expected him to “crack Rosebery up [praise him] ...
out of a feeling of pride for so near a connection by marriage
”—by running him down: “Rosebery was no platform speaker. His speeches were watery; his reputation as Foreign Secretary had been over-rated—he had indeed ruined it by his despatch about Batoum [Batum] which was a rasping bark with no intention or power to bite; Bismarck was greatly disappointed with him.” But this should not be taken at face value. As before, Rosebery and the Rothschilds remained in close contact on diplomatic questions (notably Afghanistan); and Alfred wrote encouragingly from New Court that “from all sides & even distant climes we hear nothing but great satisfaction at the nomination of the new Minister of Foreign Affairs.” When Rosebery left office once again following the defeat of the Home Rule Bill, it was Natty who encouraged him to keep his political hand in by becoming chairman of the new London County Council. He also discussed industrial relations with Alphonse shortly before returning to government in 1892—discussions which foreshadowed his intervention in the miners’ strike the following year. It also seems unlikely (as the German ambassador claimed) that the Rothschilds discouraged Rosebery from returning to the Foreign Office: such correspondence as remains from this period suggests that they continued to supply him with financial and diplomatic news (for example, about Egypt). The French Rothschilds welcomed his elevation to the premiership following Gladstone’s resignation, and Alfred took the unusual step of acting on the Prime Minister’s behalf in a dispute with the Bank of England over a box of securities allegedly mislaid by the Bank’s former Chief Cashier. (His intercession resulted in an out-of-court compensation payment of no less than £20,000.)
⁶
Natty regretted Rosebery’s subsequent resignation of the premiership, not least because it represented a victory for Harcourt—“more pompous & boisterous than ever and more perfidious”—and his increasingly progressive fiscal policy.

Rosebery had stuck it out alongside the Gladstonians for longer than Natty; but his formation of the imperialist Liberal League in 1902 indicated that his sympathies had never been that far removed from the Unionists; and his political career after he broke with the Liberal party altogether in 1905 closely paralleled Natty’s (both opposed Lloyd George’s budget in 1909, for example, and the Parliament Bill which reduced the power of the House of Lords).

As with Churchill, however, the question remains whether the Rothschilds got anything material out of their relationship with Rosebery. The answer is that by and large they did not. To be sure, the surviving correspondence shows the Rothschilds supplying Rosebery with financial and diplomatic information; but there are few direct requests for ministerial action one way or another, barring some very minor patronage business once Rosebery had honours in his gift. Nor does recent research on Rosebery’s foreign policy indicate anything which could be described as a Rothschild influence. It is therefore tempting to conclude that the fears expressed by more Radical Liberals about Rosebery’s links to the “intriguing” Rothschilds were groundless. Yet there was at least one occasion when Rosebery undoubtedly did give them advance warning of an important diplomatic decision. As Foreign Secretary in January 1893, he used Reginald Brett to communicate to New Court the government’s intention to reinforce the Egyptian garrison. “I saw Natty and Alfred,” reported Brett,

It may be that this was an isolated incident; on the other hand, the possibility cannot be discounted that such inside information was more often communicated orally, or in letters which have not survived.

There were undoubtedly parallels between the English Rothschilds’ political activity and that of their French cousins. Of course, as Alphonse never tired of noting in his letters, the French Republic was a very different political environment, in which both left and right adopted more extreme positions than in Britain. Moreover, the French Rothschilds had developed a much greater degree of ideological neutrality (or flexibility) as a result of the frequent regime changes they had lived through. At heart, Alphonse and his brothers were, like their mother, Orléanists: there are enough positive references in their letters to the idea of a monarchical restoration to confirm that. But like their father, they were quite prepared to work with republican politicians. The distinction they drew was between moderate or conservative republicans and radical or “red” republicans. They were not sorry to see Thiers replaced as President of the Republic by Marshal MacMahon in 1873 and lamented MacMahon’s fall four years later after the abortive coup of May 16, whereas the Republican victory in the elections which followed revived memories of the Commune in Alphonse’s mind. Only the appointment of their old friend Léon Say as Finance Minister in December reassured Alphonse. Although Say’s readiness to sell the new 3 per cent rentes directly to the public reduced their traditional underwriting commission, the Rothschilds were keen subscribers. They were no less supportive of the government’s loan of mid-1881, subscribing over 100 million francs.
⁷

If “respect” for landed property was the touchstone of conservativism in the eyes of Natty, the French Rothschilds attached a similar importance to the private French railway companies in which they, of course, continued to hold a major stake. In the early 1870s, when there was a spate of new branch-line construction, Alphonse worried that the Nord company was being bypassed in favour of other companies. Later, it was the more serious threat of railway nationalisation—that old objective of 1848—which preyed on his mind. As in England, “socialism” became a shorthand for any threatened state intrusion on hitherto unrestricted property rights.