A Golden Era Ends For A Secretive Dynasty
"They have pulled out of retail fund management - into which they went with much fanfare only three years back - and now they are pulling out of oil and gold in favour of the higher-margin areas of private banking and wealth management."
The news that the bankers Rothschild are to withdraw from the gold market, in which they have been a major player for two centuries, has been hailed as the end of an era.
In one sense, of course, it is. This was the company that smuggled gold coins across the English Channel to finance the Duke of Wellington's advance through France to his final triumph at Waterloo over Napoleon (who, it turned out, had also borrowed money from the Rothschilds).
But in another way it marks out the continuation of an even older tradition - the ability of the family which has founded one of the world's largest private banking dynasties to sustain their secretive fortune, which industry insiders count not in billions but in trillions, and keep it within the family.
Secrecy has been a hallmark of the Rothschilds from the outset. Mayer Amschel Rothschild, the son of an itinerant money lender and goldsmith who settled in the Jewish ghetto in Frankfurt-am-Main in 1744, specialised not just in clever accounting practices but also kept secret books and subterranean vaults which he ensured were never the privy of auditor, lawyer or taxman.
As the paterfamilias became more successful he despatched four of his five sons to different European capitals to take advantage of the rise of capitalism and the growth of international trade. Nathan he sent to London, James to Paris, Saloman to Vienna, and Carl to Naples, keeping the eldest, Amschel, at home with him in Prussia. Of these the two most important proved to be London and Paris, where the two main branches of the family developed a friendly rivalry, with the English branch developing the edge in business and the French in philanthropy, the arts and winemaking. But then in 1996 Amschel Rothschild, a 41-year-old man who had lived in the flamboyant style of many of his ancestors, hanged himself in a Paris hotel room. He was the Rothschild who had been groomed to take over as head of the English arm of the dynasty.
So when the bank's chairman Sir Evelyn de Rothschild retired earlier this year the succession passed to the French side of the family. Baron David de Rothschild, who had been running the family's Paris-based bank, inherited.
None of the Rothschild enterprises have been banks in the sense as understood by the man or woman in the street. What Mayer Rothschild founded in the 1760s was a business which grew from the humble beginning of selling rare coins to becoming the prime moneylender to greedy and spendthrift governments across Europe. One German contemporary quipped that Mayer was "the pride of Israel ... before whose money box kings and emperors humbly bow". And the novelist Thackeray said of Nathan that he was "not king of the Jews, but the Jew of the kings". The brothers financed both sides in the Napoleonic wars and in the Austro-Prussian war too.