Building an Empire


Since the times of Napoleonic Wars, the Rothschilds steadily strengthened their prominent position in the City of London. In 1847, Lionel de Rothschild, son of Nathan Rothschild, was elected to the British House of Commons as one of four Members of Parliament for the City of London constituency. However, what prevented the Rothschilds from following political career was their religion. The Rothschilds were believers in Talmud, the rabbinical teachings which elevated the Jews to a superior race and permitted discrimination of non-Jews, Christians in particular. Meanwhile, in Britain all the members of the British Parliament were required to swear a Christian oath. To circumvent this obstacle, the Rothschilds lobbied for a change in law. In 1848, British Prime Minister Lord John Russell introduced a Jewish Disabilities Bill which abandoned the requirement for the Christian oath. Initially the bill was accepted by the House of Commons but twice rejected by the House of Lords. It required the intervention of Benjamin Disraeli, then Chancellor of Exchequer, to persuade the House of Lords to agree to a proposal to allow each house to decide its own oath. Consequently, the Jews Relief act of 1858 allowed "any Person professing the Jewish Religion, [to] omit the Words 'and I make this Declaration upon the true Faith of a Christian'" in their oaths. With their steady acceptance and political emancipation, Jews started to permeate into British society taking up post in law, banking and government administration. Julius Reuter (born Israel Beer Josaphat), son of a rabbi in Kassel, Germany, settled in London in 1851 and from an office in the Royal Exchange Buildings he used the new Dover-Calais telegraph link to transmit business data between London and Paris Stock Exchanges. Reuter was created baron in the nobility of Saxe-Coburg & Gotha and later expanded his services to provide up-to-date news of events for the press, creating the largest News Agency in the world.122

In the tradition of the Court Jews, the Rothschilds had special interest in strategic metals, precious stones and minting facilities. In the 1830s they invested in Spanish mercury mines acquiring virtual monopoly in quicksilver. After Californian gold rush of 1849, they dispatched a relative of theirs to the United States enabling him to become large-scale importer of gold and establish important connections with the mining engineers. The Rothschilds also got interest in steel industry. In 1843, Salomon de Rothschild purchased iron and steel work at Witkovice (Witkowitz), in Ostrava in Austrian Empire (now Czech Republic). In 1852, Sir Anthony de Rothschild acquired the lease of the Royal Mint Refinery and got control of refining and minting capacity. By December 1852, Lionel Rothschild was in a position to formally ask the Governor of the Bank of England, Thomas Hankley, “to be permitted to present directly to the Bank of England my gold and silver bars, refined and melted under my responsibility.”123 In 1869, second son of Lionel de Rothschild, Alfred de Rothschild, became director of the Bank of England. In 1886, Lionel's first son, Nathaniel Rothschild, persuaded Hamilton Smith and Edmund de Crano to open a thriving mining consultancy which became the Exploration Company. Through their investment vehicle they bought a controlling interest in the Anaconda copper mine near Bute, Montana in 1895, which produced twenty-five per cent of North American copper. In 1873, the Rothschilds took over the control of RIO TINTO copper mines near Huelva in Andalucia, in southwestern Spain, purchasing it from a syndicate that consisted of Deutsche Bank (56% ownership), Matheson (24%), and railway firm Clark, Punchard and Company (20%), which purchased it from a Spanish government.124 Thus, by close of the century, the Rothschilds controlled almost forty per cent of world copper production and still expanded. As the fight over resources often involved the assistance of arms, in the late nineteen century, the Rothschilds grew interested in the armaments industry. In 1888, Lord Rothschild financed the mergers of Maxim and Nordenfelt, the two leading armaments companies which underpinned the expansion of the British Empire.125 The Maxim gun, created by an American-Jewish inventor, Hiram Stevens Maxim, who emigrated to the City of London, had been used in majority of the British colonial aggressive wars and was also sold to the Russian and Japanese army. Lord Rothschild realised the prospect of potential profits from the armaments industry and retained a substantial shareholding in the new Maxim-Nordenfelt combine and ‘exerted a direct influence over its management’.126 Then in 1896, he assisted Edward Vickers in purchasing Maxim Nordenfelt, and in 1897 he assisted in Vickers' take over of the Naval Construction and Armaments Company. The new VICKERS, SONS AND MAXIM COMPANY, which consolidated the armaments industry, remained closely associated with the Rothschilds.

In 1874, Benjamin Disraeli, future Lord Beaconsfield, a novel writer who worked previously as a clerk in a firm of solicitors in the City, was a first Jew to become Prime Minister of Britain. A year after his election, Benjamin Disraeli took a loan from the Rothschilds to finance one of Britain's major investments – the purchase of the shares in SUEZ CANAL from Egypt for £4 million. The canal was build by the French engineers under supervision of Ferdinand de Lesseps, who obtained a concession for its constructions from Sa'id Pasha the Khedive of Egypt and Sudan. It connected the Mediterranean Sea to the Red Sea through the Isthmus of Suez, thus reducing the journey to the Indian Ocean by approximately 7,000 kilometres (4,300 mi). This was the realization of the old dream of the Venetians who contemplated digging a waterway between the Red Sea and the Nile after Bartolomeu Dias passed the Cape of Good Hope and opened a maritime trade route to India in 1497.127 It was also a realisation of Bonaparte's dream who brought with him French engineers during his Egyptian campaign. The canal opened to shipping in 1869 and shares in the Suez Canal Company sold quickly in France with help of James de Rothschild. The canal was extremely important for British strategic interest given that three-fourths of its traffic consisted of ships bound to or from India. The London House of Rothschild lent Disraeli £4m to purchase shares from Said Pasha's successor, Isma'il Pasha. This was done without first obtaining consent from the British Parliament which prompted accusation that Disraeli undermined the British constitutional system.128 To protect the interest of the shareholders, the Rothschilds were prepared to wage war with the Egyptians. In 1882, they encouraged the British government to put down the threat of the Arabi Pasha's nationalist party and bombard Alexandria. The decision was made by Disraeli's successor and leader of Liberal Party, William Gladstone, the Oxford-educated son of the slave-owning merchant. Nathaniel Rothschild's brother-in-law Alphonse was extremely pleased with bombardment of Alexandria, pointing out that 'England can now no longer withdraw until law and order are re-established all over country; this is the best all those with legal interest in Egypt.'129 In certain circles in Britain it was a widely held view that the government had intervened in Egypt to protect the interest of the bankers and bondholders.130 The bombardment of Alexandria and occupation of Egypt was Britain's first sustained intervention in the Middle East. Sir Evelyn Baring, of the banking family of Baring Brother, known otherwise as Lord Cromer, was appointed as British Consul-General in Egypt with a task of “guiding and invigorating” the country “without appearing to govern”.131 Although Gladstone's government promised to evacuate its troops as soon as “the order was restored”, the British remained in Egypt for the next 72 years. Having established their foothold in Egypt, the British merchant elites would extend their control over Sudan, setting up in 1899, the Anglo-Egyptian Condominium in which sovereignty was jointly shared by the khedive of Egypt and the British Crown.

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122 Tames, The City of London, p. 118 »

123 Niall Ferguson, The House of Rothschild. The World's Banker 1849-1999, vol. 2 (New York: Penguin Group, 2000) p. 70 »

124 Read more: Charles E. Harvey, The Rio Tinto Company: An Economic History of a Leading International Mining Concern, 1873-1954 (Alison Hodge, 1981) »

125 Allfrey, Basil Zaharoff, pp. 46 and 51 »

126 Fergusson, The House of Rothschild, p. 413 »

127 Colin Thubron, Seafarers: The Venetians (Time-life Books, 1980), p. 102 »

128 The Rothschild Archive's website; 'Lionel de Rothschild and the Suez Canal', »

129 Ferguson, The World's Banker, pp. 834-6 and 840 »

130 Cooper, The Unexpected Story of the Nathaniel Rothschild, p.70 »

131 Karl E. Meyer & Shareen Blair Brysac, Kingmakers. The Invention of the Modern Middle East (New York: W.W.Norton & Company Ltd, 2008), p. 31 »