In modern times, The Rothschild family is often referred to as archetypal capitalists who were Europe's wealthiest family from 1820 onward and gained this position through their ability to exploit the capitalist system--this widely held view is completely false. The Rothschild family was indeed the Continent's wealthiest family throughout the nineteenth century but they gained this position through the exploitation of governments. Therefore, The Rothschilds should not be labeled as capitalists but rather another group of people in bed with governments, at an enormous scale.
200 years later, this misnomer not only still exists but is probably the most pervasive and deleterious aspect of modern economic thought. People continue to blame society's problems on freedom while neglecting the incessant cronyism, corporatism and government expansion that permeates the economy. This notion was repugnant in the early years of American society which is why the Rothschild family had such difficulty penetrating The United States economy.
Traditionally, The Rothschild family conducted business in countries where they had strong relations with the governments of those nations; otherwise they refused. In the 1830s and 40s, this presented a huge dichotomy to the five Rothschild brothers who were scattered across Europe's financial cities because they also recognized the large economic growth taking place in the United States indicating enormous potential for profits. Not only did the family lack a strong relationship with the federal government but The United States was also in the midst of major financial reform revolving around Andrew Jackson's abolition of the Bank of the United States (BUS).
In the 1998 widely acclaimed book "The House of Rothschild: Money's Prophets 1798-1848" by Niall Ferguson, the author notes:
"The Bank of the United States had employed Barings as its European agent but the relationship broke down in 1836-7, and the Rothschilds hurried to offer their services. Biddle (the bank's head) had ambitious-sounding plans, including "a business with a guarantee of two million pounds sterling to provide advances for goods and stocks," and a scheme for a quasi-monopoly on cotton exports. It seemed to James (Rothschild) like a financial marriage made in heaven: these were, he enthused, "the wealthiest people in America" and "no less solid" than the Banque of France. At once, he began to imagine "flooding the American market" with his Spanish mercury "so that in six months we will be masters of the market"." p 373
This alliance never came to fruition as Nicholas Biddle's power and credibility later dwindled coupled by other large problems that arose within America's financial system.
"In October 1839 the BUS (Biddle's bank) suspended payments and in 1841 finally collapsed. Its failure coincided with a rash of defaults by states... In the wake of this fiasco, which saddled the London and Paris houses with a large quantity of thoroughly bad debts, the Rothschilds were content to hand back to Barings the position of bankers to the federal government. "You may tell your government" James was reported as telling representatives of the US Treasury, "that you have seen the man who is at the head of finance of Europe, and that he has told you that you cannot borrow a dollar, not a dollar." The experience with the BUS had made James wish he had "never become involved with ." In future, he concluded, unless the federal government were "prepared to guarantee all the States and make the payments with us" and to set up an officially backed central bank, he would keep his distance." pp 374-375
Presidents Andrew Jackson and Thomas Jefferson were strongly opposed to a central bank, largely because they had witnessed the corruption surrounding central banks and the way in which large banking institutions profit from wars. A large portion of wealth that the Rothschild family accumulated derived from high interest rates charged to governments in order to help fund wars. Ferguson points out that:
"Historians have never adequately explained how an obscure Jewish merchant banker --who only a few years before had been a smuggler, and a few years before that a minor textiles exporter--was able to become the principle conduit of money from the British government to the continental battlefields on which the fate of Europe was decided in 1814 and 1815. Of all the steps in the ascent of the house of Rothschild, this was surely the greatest; yet it is also the least understood." p 85
The United States Federal Reserve Bank was not officially established until 1913 and therefore the Rothschild family never established a firm relationship with the federal government. Although they did closely monitor the activities in the US economy and took part in activities such as the gold rush and post Civil War financing. In fact, subsequent to The Civil War, large banking conglomerates in the US began to emulate Rothschild practices by pushing hard for a central bank and exploiting the federal government in various ways.
JP Morgan was the most obvious example. JP, like the Rothschilds, helped to provide funding for weapons during war (The Civil War). In the 1890s, JP provided huge sums of gold to the Federal Government. JP also went on to help form Chase Manhattan Bank which is now one of the worlds largest banking conglomerates, under the name JPMorganChase.
Over the past 100 years, Chase has maintained very close ties to the US government and other governments throughout the globe. The bank has been very successful at loaning money to governments through various means such as its close affiliation with Worldbank and The IMF.
The head JPMorganChase, David Rockefeller, maintained close relationships with many global leaders during the bank's period of internationalization during the 1960s and 70s. David also maintained intimate relationships with members of the US government such as Henry Kissinger and the Dulles brothers during the 1950s, 60s and 70s. In addition, he has also worked very closely with the former head of the New York Federal Reserve, Timothy Geithner and Fed Chairman Paul Volcker, a longtime Chase executive.
It is precisely this type of cronyism which was detested by early Americans while being mastered by the Rothschilds in Europe.
The Rothschilds used their political influence and political intelligence to push out many aspects of their agenda. For example, Nathan Rothschild (in London) was able to make a huge profit by speculating on the stock market as he was the first to receive news of Napoleon's defeat at Waterloo.
The Rothschild family was also very effective at influencing monetary policy throughout Europe's major financial cities as they were closely linked to the central banks and they also dominated the world's precious metals market--specifically gold. Given the sheer quantity of gold the family had acquired through their various expeditions around the globe they were able to manipulate the continent's money supply. Without the existence of central banks their manipulation tactics would not have been possible.
"James had in fact been sending substantial quantities of gold across the Channel since the beginning of 1825, if not earlier. In the first week of January alone, he had sent gold worth nearly