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Speaker 1: Imagine a family so wealthy, so intertwined with the machinery

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of the world that they didn't just buy mansions or islands,

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they bought the outcomes of wars. We are talking about

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a dynasty that started in a place where they were

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legally prohibited from owning property, from walking in public parks,

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or even leaving their street at night. And yet you know,

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within two generations they were bailing out the United States

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government and financing the defeat of Napoleon.

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Speaker 2: It honestly sounds like the plot of a very dense,

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very improbable novel, but it is, and I don't think

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this is an exaggeration. Arguably the most significant case study

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in the history of finance. Right we aren't just talking

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about rich people. We are talking about the architects of

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the modern bond market. We are talking about a family

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that effectively invented the concept of international finance, pioneered high

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frequency trading a century before computers, and managed to stay

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relevant for over two hundred years.

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Speaker 1: Welcome back to thrilling threads. Today we are pulling on

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perhaps the most goal and certainly one of the most

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controversial threads in our entire stack of history. We're talking

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about the House of Rothschild.

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Speaker 2: From the ghetto to global finance. It's just a staggering trajectory,

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and frankly, it's a story that often gets buried under

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layers and layers of conspiracy theories and myths.

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Speaker 1: Oh absolutely, I mean looking at the research we have

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for today, this really detailed transcript analyzing the history of

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the Rothschild and Morgan families, it's honestly overwhelming. You can

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fall down a rabbit hole of internet myths in about

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five seconds. But what I love about the source material

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we're using today is that the actual business history, the

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nuts and bolts of what they did, is wildly more

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interesting than any of the fiction it is.

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Speaker 2: And that's really our mission for this deep dive. We

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want to strip away the myth and look at the mechanics.

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We want to understand how how did they build this

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fortune from absolute zero? More specifically, how do they invent

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the financial machinery that still runs the world today, And

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maybe most interestingly, how did they lose their absolute dominance

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to the Americans, specifically the House of Morgan, and yet

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somehow managed to survive when so many other dynasties just collapsed.

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Speaker 1: We're going to get into all of it. The invention

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of front running, which spoiler alert sounded incredibly sketchy to

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me when I first read about it what it was,

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and the carrier pigeons that supposedly beat Napoleon and the

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time they literally saved the US dollar from collapsing. We

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have to start at the bottom, and I mean the

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absolute bottom.

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Speaker 2: Frankfurt, Germany, the mid eighteenth century.

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Speaker 1: Right Mayor Amssel Rothschild. I think when people hear the

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name Rothschild today they think of, you know, vineyards in France, chateaus,

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high society balls. But where mayor started it was not.

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Speaker 2: A chateau, far far from it. We need to be

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very specific about the Frankfurt ghetto or the Judentos, the

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jews alley. This wasn't just a poor neighborhood or a

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rough part of town. It was a legally enforced enclosure,

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a single narrow street with gates that were locked at night.

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Speaker 1: The details in the source material are just. It describes

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it as incredibly crowded, dark, with heaps of secondhand clothes

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and soiled household goods just spilling into the alleys. It

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feels claustrophobic just reading about it.

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Speaker 2: It was designed to be claustrophobic, and you have to

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understand the legal environment to get the full picture. The

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Jewish residents there were subject to these incredibly strict ordinances.

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They were barred from farming.

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Speaker 1: For instance, so you can't grow your own food, you.

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Speaker 2: Can't own land outside the ghetto. You couldn't be a

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part of the craft guilds, so you couldn't be a

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carpenter or a blacksmith. They were even banned from dealing

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in what were considered nobler goods.

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Speaker 1: Nobler goods, what does that even mean? That sounds so archaic.

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Speaker 2: It meant protected traits, things like weapons, silk, or fresh fruit.

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Those were all reserved for the Christian golds. So if

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you were Mayor Amshell born in seventeen forty four, your

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career options were just severely limited by law. You can't

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grow food, you can't make things with your hands, and

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you can't sell the high end stuff.

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Speaker 1: So you're forced into the margins. You're forced to find

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the gaps in the system.

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Speaker 2: Exactly you operate in the gaps. He started with textiles,

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specifically dealing in secondhand cloth.

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Speaker 1: Which just sounds miserable. The source says he grew discontented

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with it, which I'm in guessing is a very polite

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way of saying. The margins were terrible and dealing with

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old rags is not a fun way to live.

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Speaker 2: It's a volume business with very very low profit. Yeah,

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but Mayer was observant, he was smart, and he realized

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that while he couldn't sell fresh fruit or new weapons,

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there was a specific niche that was unregulated and crucially

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high margin, which was rare coins and antiques.

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Speaker 1: Okay, so he pivots from rags to riches literally old money.

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But why coins? Was there some big market for old

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failures in the ghetto.

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Speaker 2: No, not in a ghetto. But you have to remember

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the era. This is the age of Enlightenment Europe, the aristocracy,

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the princes, they're all obsessed with history, with lineage, with culture.

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Collecting rare coins was like the Gulf of the eighteenth century.

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For German princes. It was how you showed you were

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so f whisticated in worldwage.

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Speaker 1: Okay, so he identifies the customer. The source points to

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one in particular, Prince William of Hescastle, a man known.

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Speaker 2: To be a fanatic collector. But here's the problem. How

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does a Jewish man from the Frankfurt ghetto, who effectively

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has no civil rights even get a meeting with a prince.

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How do you get your foot in that door?

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Speaker 1: This is where the hustle comes in. Right, The source

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mentions he started by selling the coins at a bargain.

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Speaker 2: That's the key. That is the entire key. He didn't

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try to maximize profit on the first transaction. He created

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these elaborate, beautifully written catalogs. It was like mail order

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marketing before mail order was a thing. And he offered

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these rare coins to the Prince at prices that were

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almost too good to be tripped.

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Speaker 1: So he was undercutting himself on purpose. He was losing

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money on the deal.

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Speaker 2: He was buying access. He realized that the profit wasn't

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in the coin itself, the profit was in the relationship

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with the prince. By selling the coins cheaply, he became

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the Prince's go to guy. He became indispensable, and eventually

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he gained the title of court factor or court agent.

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Speaker 1: Okay, let's unpack this court factor thing, because once he

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has this title, he starts doing something that our source

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calls front running. Now, in modern finance, front running is

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super illegal, Like people go to jail for this.

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Speaker 2: In modern regulated markets, yes, it's highly illegal, but in

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the eighteenth century it wasn't illegal. It was just financial innovation.

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Speaker 1: So explain how Mayor did it. How did he make

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money coming and going on these deals?

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Speaker 2: Okay, So imagine Prince William wants to buy a specific

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set of gold coins or say some government bonds. He

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asks Mayor, his trusted court factor, to go and get

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them for him. Right now, a normal broker would just

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go find a seller, connect them to the Prince, and

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take a small fee for making the introduction, a finder's

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fee commission. Mayor didn't do that. Mayor would go out

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use his own credit, borrowing money from others in the

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Jewish community who trusted him, and he would buy the

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asset himself. He would take ownership of the coins, so.

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Speaker 1: He owns the asset first, he's the one taking the

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risk exactly.

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Speaker 2: Then he turns around and sells them to the Prince.

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So first he makes a profit on the markup the

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difference between what he bought it for and what he

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sold it to the Prince for. But because he is

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the agent, he also charged a commission fee, often around

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eight percent, for the service of acquiring them for the prince.

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Speaker 1: He's double dipping. He's acting as both the seller and

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the broker. That's incredible.

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Speaker 2: He is front running his own client. He buys the

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inventory knowing he has a guaranteed buyer at a higher price.

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It's essentially risk free arbitrage. And because he was dealing

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with a prince who was one of the wealthiest men

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in Europe, the volume was significant.

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Speaker 1: But the source makes a really interesting point here that

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I want to hone in on. It wasn't just about

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the cash. It was about credit in the social sense.

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Speaker 2: That is the crucial insight. Absolutely, by managing the Prince's investments,

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Mayor gained legitimacy in a world where he was legally

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a second class citizen. Having the official seal of Prince

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William of Hescastle on his carriage was like a passport.

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It opened doors that were otherwise bolted shut. It allowed

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him to transition from a trader of goods to a

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banker of capital. He wasn't just Mayor from the ghetto anymore.

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He was the financial agent of his Highness, and.

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Speaker 1: That transition is what sets up the entire dynasty. But

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Mayor knew he couldn't live forever, and the source mentions

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a dying decree that really fascinated me. It wasn't about

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make more money or buy this asset. It was about family.

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Speaker 2: Structure, family unity above all else. Yeah, that was the rule.

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And you have to understand this wasn't just sentimental. This

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is a calculated business strategy for survival. He knew that

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for his bank to survive across borders in a very

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volatile Europe, the partners had to trust each other implicitly.

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Speaker 1: Because there were no contracts enforceable in the same way

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we have today. Right, if you're sending money from Frankfort

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to London, exactly.

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Speaker 2: If you send an unrelated employee to London with a

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million pounds in gold, what's to stop him from just disappearing.

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Speaker 1: Taking a long vacation to the Caribbean.

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Speaker 2: Right, But if you send your son, he's not just

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an employee. He's building the family legacy. So Mayer instituted

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this system that was effectively a decentralized multinational corporation before

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such a thing even existed. The five arrows, the five arrows,

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that's the family symbol. To this day, you'll see it

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on their crest. He dispatched his five sons to the

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five major financial capitals of Europe. Amshall stayed in Frankfort

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to run the home base. Salmon went to Vienna, Carlton, Naples,

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James de Paris, and the third son. He wanted the

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crown Jewel London. And this brings us to Nathan Rothschild.

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Speaker 1: The genius of the family, the real engine.

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Speaker 2: And apparently a bit of a shark. The source describes

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him as fiercely ambitious, competitive and quick to take offense.

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Not a guy you wanted to cross.

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Speaker 1: He was not a man to be trifled with.

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Speaker 2: No.

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Speaker 1: He arrives in London with twenty thousand pounds from his father.

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Now that was a lot of money in the late

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seventeen hundreds, but it wasn't rule the world money, not yet.

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And he looks at the textile industry, remember the same

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industry as father started in, and he just sees inefficiency everywhere.

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I love this part because it shows exactly how his

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brain worked. He doesn't just buy in soil cloth. He

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realizes everyone is taking a cut along the way, the

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guy selling the raw cotton, the guy who's dying it,

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the manufacturer.

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Speaker 2: It's vertical integration. It's a term we use now for

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companies like Apple or Tesla, but Nathan was doing it

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with fabric in eighteen hundred. He basically said, why am

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I paying the dyer a profit. I'll buy the raw

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material myself. I will pay the dyer a wage to

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do the work, and then I will own the final

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product and capture all the margin.

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Speaker 1: There's a great quote in the source resays I found

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there were three profits, so I got three profits instead

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of one. It's so simple and so brilliant.

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Speaker 2: And that turned his twenty thousand pounds into sixty thousand

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pounds very very quickly. But Nathan, just like his father,

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he realized that trade has physical limits. You have to

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move goods, you have to store goods, you have to

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deal with spoilage and logistics. Finance, on the other hand,

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finance scales.

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Speaker 1: Infinitely, So he pivots again from textiles to banking, but

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not just a banking smuggling.

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Speaker 2: Well, let's call it logistics in a hostile environment. The

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line between merchant banking and smuggling during the Napoleonic Wars

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was very thin. Britain is blockading, France's blockading Britain. If

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you can move goods, gold, textiles, information, across those lines

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you can charge a massive, massive premium.

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Speaker 1: And the source says Nathan earned a reputation for superior

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management and judgment, which sounds like a very nice way

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of saying he was the best smuggler in Europe.

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Speaker 2: He was the best legistation. He built the network.

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Speaker 1: And that brings us to the defining moment of the

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Rothschild legend, the Napoleonic Wars. This is where they go

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from being just rich to being masters of the universe.

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Speaker 2: This part feels like a spy movie. It's incredible. So

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set the scene for us. You have the Duke of Wellington,

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the British commander, fighting Napoleon in France and Spain. He

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has an army, he has guns, but he has a huge,

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huge problem.

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Speaker 1: He has no money. Well, to be precise, the British

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government has credit, but Wellington's soldiers in France need French coins.

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You can't pay a French farmer for wheat with a

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British pound note. They won't take it. They want gold

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or silver. Louis d or So Wellington is sitting there

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with an army he can't feed or pay because he

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literally lacks the right kind of cash.

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Speaker 2: Correct and The British government is in a full blown panic.

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They have vaults of gold in London, but how do

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you get it to Wellington on the front lines. If

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you put it on a ship, the French Navy might

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sink it. If you try to carry it overland through France,

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it'll get stolen by bandits or confiscated. They literally did

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not know how to get the physical metal to their

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own army.

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Speaker 1: Enter Nathan Rothschild.

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Speaker 2: He steps up, He goes to the government. He buys

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eight hundred thousand pounds worth of goal from the East

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India Company, a staggering sum, and he tells the government,

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don't worry, I can get it to Wellington.

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Speaker 1: How I mean, how do you move nearly a million

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pounds of gold through enemy territory? It seems impossible.

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Speaker 2: Through that network of five Brothers, the five Arrows. This

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is where Mayor's strategy pays off in the biggest way imaginable.

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He had a brother in Paris, James.

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Speaker 1: James is in Paris, the capital of the enemy. How's

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he even operating there?

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Speaker 2: Yes, And this is the brilliance of it. They use

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financial instruments called bills of exchange. You can think of

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them as old timey checks. So Nathan sends paper to

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James in Paris. James then goes to French bankers who

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need to move money to London, and he swaps Nathan's

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paper for their physical gold in France.

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Speaker 1: So they're basically clearing transactions for both sides.

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Speaker 2: They're acting as a clearinghouse for international payments during a war,

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and then for the physical gold they did have to move.

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They used their smuggling routes, the source mentions. They disguise

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gold coins in kegs of wine, in the false bottoms

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of carriages. They dress couriers as women. They move the

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gold right under the noses of the French police, piece.

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Speaker 1: By piece, and Nathan famously called it the best business

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I ever did.

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Speaker 2: And it wasn't just because of the commission, which was substantial.

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This cemented the Rothschilds as the de facto bankers of

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the British government. But there's another layer to this war

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financing that is even more important for modern listeners. It

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wasn't just moving gold, it was moving information.

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Speaker 1: The pigeons, Okay, we have to talk about the carrier pigeons.

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Speaker 2: Yeah, the pigeons, the horses, the private boats across the channel.

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The rock Childs understood before anyone else in finance that

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information is a commodity. If you know the outcome of

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a battle one day or even one hour before the

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market does, you are rich.

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Speaker 1: The source calls them the original high frequency traders, which

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is such a great way to put it.

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Speaker 2: It's a perfect analogy. Today, HFT firms spend millions of

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dollars to shave nanoseconds off the time it takes data

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to travel through fiber optic cables between New York and Chicago.

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Nathan Rothschilds spent money on the best horses and trained

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carrier pigeons to shave hours off the time it took

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for news to cross the English Channel.

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Speaker 1: So while everyone else in London is on the docks

302
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waiting for the official government ship to arrive with news

303
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of the war, Nathan's pigeon has already landed and he

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knows the result precisely.

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Speaker 2: And this leads to the most famous and most mythologized

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incident in their history, Waterloo. Now there is a pervasive myth,

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a false story that Nathan heard about Wellington's victory, went

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to the stock exchange, pretended to look sad, and started

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selling his British government bonds to make everyone think Britain lost.

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Speaker 1: Right to create a panic so he could buy them

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all back for cheap. That's the movie version.

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Speaker 2: That is the anti Semitic pamphlet version that was created

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many years later. The reality, according to our source, is

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much simpler, but still absolutely genius. He got the news

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first via his network that Britain had won. He knew

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that meant peace was coming. And he knew that in

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peacetime government spending stops, so the value of government bonds

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the consoles would rise dramatically.

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Speaker 1: So he didn't sell. He just bought.

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Speaker 2: He just bought quietly and quickly. He bought as many

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bonds as he could get his hands on before the

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official news hit the street. He bet the house on the.

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Speaker 1: Rally, and when the news officially arrived.

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Speaker 2: The bonds skyrocketed. The source mentions that while the eight

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percent commission on moving Wellington's goal was nice, this kind

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of currency and bond speculation was the real wealth generator.

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It multiplied their fortune exponentially in a single day.

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Speaker 1: It's incredible. They literally monetize speed. They monetized the information gap.

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Speaker 2: And when Nathan died in eighteen thirty six. At just

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fifty eight years old, he was effectively the richest man

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in the world. The Times of London wrote that his

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death was one of the most important events for the

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financial markets of Europe. That is how powerful he was.

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He was more important than most kings.

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Speaker 1: But he dies. And this is usually where these great

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family dynasties crumble. Right, the charismatic founder is gone, the

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kids start fighting, the money just vanishes in a generation

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or two. But the Rothschilds had that decentralized structure that

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mayor created.

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Speaker 2: Right, the torch doesn't fall, it's passed. In this case,

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it passes to Paris. The James Rothschild.

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Speaker 1: James Nathan's youngest brother. The source says he was intellectually

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Nathan's equal, but less submissive. Sounds like he had a

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bit of an ego.

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Speaker 2: James was a fascinating character. He was in Paris, which

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was the ultro and social capital of the nineteenth century.

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He wasn't just a banker. He was socialite, a patron

348
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of the arts, a friend of the composer Rassini in

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the novel Spolzac. But in business he was just as

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ruthless as Nathan, and he saw the next big wave coming.

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Speaker 1: If Nathan's big wave was war financing, what was James's wave?

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Speaker 2: The Industrial revolution? Specifically railroads.

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Speaker 1: Everyone loves a train, everyone.

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Speaker 2: Loves a train, but James loved the idea of financing

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and infrastructure monopoly. He helped fund and build the first

356
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major railway system in France. But here is the really

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clever part. He did it using syndicates.

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Speaker 1: Okay, what's a syndicate in this context? Can you explain that? Like,

359
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I'm five sure?

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Speaker 2: So building a railroad is insanely expensive and very risky.

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If James uses all of his own money and the

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train company fails, he loses everything. So a syndicate is

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basically a group investment. He goes to a bunch of

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other rich investors and says, we're all going to put

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money into this pot to fund the railroad.

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Speaker 1: So he spreads the risk around. He's not putting all

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his eggs in one basket exactly.

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Speaker 2: He uses other people's money oz PM. But the Rothschild

369
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Bank manages the syndicate, so they take a fee for

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organizing the deal, of fee for managing the money, and

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they still get a piece of the profits, but with

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much less of their own capital. At risk. It was

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the early version of private equity or investment banking.

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Speaker 1: It's the classic banker move, isn't it heads eye win, tails,

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you lose, or at least tails. We all lose a

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little bit, but I still get my fees.

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Speaker 2: That's the model. But it wasn't all smooth sailing. The

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source details a massive crisis for them in the eighteen forties.

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France has a revolution, as France tended to do in

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the nineteenth century. It's a national pastime, it is, and

381
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the French government debt crashes. The value of all these

382
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assets plummets. The Paris Bank, James's bank is on the

383
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brink of insolvency, and this is.

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Speaker 1: The ultimate test of Mayor's family unity decree. James is

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in trouble, he needs cash.

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Speaker 2: Fast, and who steps in Lionel rothschild Nathan Son, sitting

387
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in the London branch. He sends a massive shipment of

388
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gold and credit to bail out his uncle James in Paris.

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Speaker 1: Wow, the London branch saving the Paris branch.

390
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Speaker 2: It proved the system worked. If they had been separate,

391
00:19:07,559 --> 00:19:10,839
competing banks, the Paris branch would have failed. But because

392
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they were one family, the capital flowed to where it

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was needed most. It made them anti fragile. It was

394
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their superpower.

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Speaker 1: Speaking of Lionel, he wasn't just writing checks. He was

396
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busy climbing the social ladder in England. The source mentions

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00:19:24,799 --> 00:19:27,039
his long struggle to get into the House of Commons.

398
00:19:27,640 --> 00:19:30,799
This feels like a really significant shift from the ghetto

399
00:19:30,880 --> 00:19:32,920
to parliament in two generations.

400
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Speaker 2: It's the ultimate assimilation story. They didn't just want money anymore.

401
00:19:37,039 --> 00:19:40,759
They wanted acceptance and political power. Lionel gets elected to

402
00:19:40,799 --> 00:19:43,400
Parliament by the City of London, a huge honor, but

403
00:19:43,480 --> 00:19:46,480
he refuses to swear the oath of office because.

404
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Speaker 1: The oath was on the true faith of a Christian

405
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right and he was Jewish.

406
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Speaker 2: Correct and Lionel basically said, I will swear on the

407
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Old Testament or I will not swear at all. He

408
00:19:56,240 --> 00:19:59,000
was elected, he refused the oath and his election was voided.

409
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He was re elected by the voters, refused again, kicked

410
00:20:02,079 --> 00:20:04,279
out again. This went on for years.

411
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Speaker 1: That takes some serious backbone to just keep at it.

412
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Speaker 2: It does. He was making a point about civil rights. Finally,

413
00:20:11,960 --> 00:20:14,519
after more than a decade, the law was changed to

414
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allow non Christians to take a modified oath. He finally

415
00:20:17,720 --> 00:20:21,119
took his seat. It was this massive symbolic victory. They

416
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had risen from the Frankfurt ghetto, where they couldn't own

417
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weapons or walk in a park at night, to a

418
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seat in the government of the world's reigning superpower.

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Speaker 1: It really feels like they are untouchable at this point

420
00:20:31,519 --> 00:20:34,519
in the mid nineteenth century. They control Europe's money, they're

421
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in government, they're building the industrial world. But then the

422
00:20:39,720 --> 00:20:43,799
source introduces a plot twist. A new character enters the chat,

423
00:20:44,079 --> 00:20:47,839
the house of Morgan, Junius Morgan, an American in London.

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Speaker 2: And Junius Morgan is such a stark contrast to the Rothschilds.

425
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The source describes him as solemn, business like, a prematurely

426
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middle aged young man. He wasn't flashy, didn't at the

427
00:20:57,839 --> 00:21:01,079
palaces or the art collections, but he was He was learning,

428
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and he was looking for his own war.

429
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Speaker 1: It sounds so morbid when you put it that way,

430
00:21:04,559 --> 00:21:06,640
looking for his own war to finance.

431
00:21:06,480 --> 00:21:09,240
Speaker 2: But that was the business. War was the biggest expenditure

432
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of any government. If you wanted to play in the

433
00:21:11,440 --> 00:21:14,039
big leagues, to be a top tier international banker, you

434
00:21:14,079 --> 00:21:16,920
had to finance a war, and in eighteen seventy the

435
00:21:16,960 --> 00:21:22,200
opportunity arrives the Franco Prussian War, Germany led by Prussia

436
00:21:22,559 --> 00:21:23,240
versus France.

437
00:21:23,279 --> 00:21:25,799
Speaker 1: Okay, so here is the showdown. You have the Rothschilds,

438
00:21:25,839 --> 00:21:29,319
the reigning champs of war finance, and you have Junius Morgan,

439
00:21:29,440 --> 00:21:33,079
the hungry challenger. How did they bet on this conflict?

440
00:21:33,240 --> 00:21:37,359
Speaker 2: The Wrothchilds, with all their incredible information networks and generations

441
00:21:37,400 --> 00:21:41,160
of experience, analyzed the situation. They looked at the Prussian

442
00:21:41,279 --> 00:21:45,000
army led by the iron Chancellor Otto von Bismarck, and

443
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they came to a very logical conclusion France is going.

444
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Speaker 1: To lose, which was the correct call militarily.

445
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Speaker 2: He was factually correct. Yes, So the wroth Childs refused

446
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to lend money to France. They thought it was a

447
00:21:55,480 --> 00:21:59,039
bad bet. They were thinking, like old world bankers, if

448
00:21:59,039 --> 00:22:01,519
the king loses the war or the new government won't

449
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pay the old king's debts, they were being risked averse.

450
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They were protecting their vast fortune.

451
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Speaker 1: Entered Genius Morgan.

452
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Speaker 2: Morgan looks at the very same war. He also probably

453
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thinks France might lose on the battlefield, but he has

454
00:22:14,960 --> 00:22:18,559
a different insight a deeper, more modern insight. He doesn't

455
00:22:18,599 --> 00:22:20,880
look at the army. He looks at the French economy.

456
00:22:21,200 --> 00:22:24,039
He sees that it's diversified. He sees that France has

457
00:22:24,079 --> 00:22:26,200
a very efficient tax collection system.

458
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Speaker 1: So he's not betting on the army. He's betting on

459
00:22:28,680 --> 00:22:29,559
the tax collector.

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00:22:29,759 --> 00:22:33,319
Speaker 2: Exactly. He had this brilliant realization, it doesn't matter if

461
00:22:33,319 --> 00:22:36,359
France loses the war on the battlefield. The French nation

462
00:22:36,640 --> 00:22:39,319
is rich enough and organized enough to pay back its

463
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debts even if they lose. He was betting on the

464
00:22:41,960 --> 00:22:44,519
underlying strength of the state, not the fate of the

465
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current regime.

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Speaker 1: That is a wild gamble, basically telling your investors, hey,

467
00:22:48,960 --> 00:22:50,839
let's loan a fortune to the country that's about to

468
00:22:50,839 --> 00:22:51,400
lose a war.

469
00:22:51,559 --> 00:22:54,000
Speaker 2: It was the opportunity of a lifetime. According to the source,

470
00:22:54,519 --> 00:22:58,000
Morgan puts together a massive syndicate and lends France the money,

471
00:22:58,079 --> 00:23:01,640
and sure enough, France loses the war. Everyone holds their breath,

472
00:23:01,799 --> 00:23:04,960
and what happens. France pays. In fact, they.

473
00:23:04,839 --> 00:23:07,880
Speaker 1: Prepay the loan and Morgan clears what was it, one

474
00:23:07,920 --> 00:23:09,200
point five million in.

475
00:23:09,200 --> 00:23:14,039
Speaker 2: Eighteen seventies money. It was a colossal fortune. But more importantly,

476
00:23:14,240 --> 00:23:17,039
It signaled a seismic shift in the world of finance.

477
00:23:17,759 --> 00:23:21,200
The Rothchilds had been too conservative. They played not to lose,

478
00:23:21,559 --> 00:23:24,599
Morgan played to win. The House of Morgan was now

479
00:23:24,799 --> 00:23:26,720
officially a true rival.

480
00:23:27,200 --> 00:23:29,599
Speaker 1: And this leads us directly to what the source calls

481
00:23:29,640 --> 00:23:33,000
the Rothschild's biggest blind spot, America.

482
00:23:32,480 --> 00:23:35,000
Speaker 2: The land of Madmen, as one of them supposedly called it.

483
00:23:35,079 --> 00:23:36,440
Speaker 1: They called it that they did.

484
00:23:36,720 --> 00:23:38,480
Speaker 2: They looked at the United States in the mid to

485
00:23:38,559 --> 00:23:42,359
late nineteenth century, and they just saw chaos, financial panics,

486
00:23:42,400 --> 00:23:46,359
bubbles bursts, wild expansion of brutal civil war. To their

487
00:23:46,400 --> 00:23:49,319
old world sensibilities, it was just too unstable. They missed

488
00:23:49,359 --> 00:23:51,960
the boat on the early American industrial boom. They missed

489
00:23:52,039 --> 00:23:56,559
Vanderbilt's railroads, Carnegie Steel, Rockefellers oil. The Rothschilds were too

490
00:23:56,599 --> 00:23:58,039
busy being comfortable in Europe.

491
00:23:58,160 --> 00:24:01,359
Speaker 1: Meanwhile, the House of Morgan is literally building America. But

492
00:24:01,400 --> 00:24:03,559
there's this one moment in eighteen ninety three that I

493
00:24:03,599 --> 00:24:06,920
found absolutely fascinating, a moment where the old Guard and

494
00:24:06,960 --> 00:24:09,160
the new Guard had to team up to save the day.

495
00:24:09,440 --> 00:24:13,200
Speaker 2: The Panic of eighteen ninety three. This is a story

496
00:24:13,200 --> 00:24:15,359
that really isn't taught enough in schools, but it was

497
00:24:15,400 --> 00:24:19,440
a crisis on a global scale. The US economy completely collapsed,

498
00:24:19,720 --> 00:24:23,640
a railroad bubble burst, banks failed, and the US government

499
00:24:23,720 --> 00:24:25,119
was rapidly running out of gold.

500
00:24:25,319 --> 00:24:27,640
Speaker 1: It's so hard to imagine today the US government just

501
00:24:27,759 --> 00:24:29,759
running out of money. We just print more.

502
00:24:30,359 --> 00:24:33,680
Speaker 2: But back then you couldn't. We were on the gold standard.

503
00:24:34,400 --> 00:24:36,480
The value of the US dollar was tied to a

504
00:24:36,480 --> 00:24:39,359
physical amount of gold held in the US Treasury. If

505
00:24:39,359 --> 00:24:42,440
you ran out of gold reserves, the dollar would become worthless,

506
00:24:42,559 --> 00:24:46,359
the government would default. The US Treasury was days away

507
00:24:46,359 --> 00:24:47,319
from total collapse.

508
00:24:47,440 --> 00:24:48,200
Speaker 1: So what happens.

509
00:24:48,720 --> 00:24:51,680
Speaker 2: President Grover Cleveland is desperate. In a last stitch effort,

510
00:24:51,720 --> 00:24:53,480
he calls the one man who might be able to

511
00:24:53,519 --> 00:24:56,359
fix it, JP Morgan, Junius's son, the one with the

512
00:24:56,400 --> 00:24:57,880
big nose in the piercing.

513
00:24:57,519 --> 00:24:59,240
Speaker 1: Eyes, the monopoly man himself.

514
00:24:59,279 --> 00:25:02,240
Speaker 2: Basically, Morgan goes to the White House and says, mister President,

515
00:25:02,279 --> 00:25:05,319
I can save the country, but he needs gold, a

516
00:25:05,480 --> 00:25:08,160
massive amount of physical gold, and he needs it now.

517
00:25:08,480 --> 00:25:10,200
And who has the most gold.

518
00:25:09,880 --> 00:25:11,359
Speaker 1: In the world, the rothchilds.

519
00:25:11,400 --> 00:25:13,960
Speaker 2: So you have this incredible scene where the American upstart

520
00:25:14,039 --> 00:25:18,279
JP Morgan has to broker a deal using Roth's Child

521
00:25:18,359 --> 00:25:21,759
gold to bail out the entire United States of America.

522
00:25:21,920 --> 00:25:25,559
Speaker 1: It's a crossover episode the Avengers of nineteenth century finance.

523
00:25:25,960 --> 00:25:29,160
Speaker 2: It is Morgan puts together a syndicate that raises bonds

524
00:25:29,480 --> 00:25:32,440
to buy three point five million ounces of gold from

525
00:25:32,440 --> 00:25:35,160
the Rothschilds. It plugs the hole in the treasury and

526
00:25:35,200 --> 00:25:38,160
saves the US economy, but it also highlighted a changing

527
00:25:38,200 --> 00:25:40,720
of the guard. The roths Childs were the suppliers of

528
00:25:40,759 --> 00:25:43,400
the Capitol, but Morgan was the architect of the deal.

529
00:25:43,839 --> 00:25:45,960
Power was shifting from London to Wall Street.

530
00:25:46,200 --> 00:25:49,599
Speaker 1: And then the twentieth century hits. And if the nineteenth

531
00:25:49,599 --> 00:25:53,039
century was the Rothschild century, the twentieth was just rough.

532
00:25:53,319 --> 00:25:56,039
Speaker 2: Rough is a massive understatement. The world wars were just

533
00:25:56,079 --> 00:25:58,640
devastating for the family, both personally and financially.

534
00:25:58,799 --> 00:26:01,000
Speaker 1: Let's start with World War One? Why was it so

535
00:26:01,079 --> 00:26:03,240
bad for them? I mean, they made their first massive

536
00:26:03,279 --> 00:26:05,839
fortune on the Napoleonic Wars. Why not this one?

537
00:26:06,000 --> 00:26:10,440
Speaker 2: Two reasons? Scale and division. First, the scale of WWI

538
00:26:10,599 --> 00:26:14,400
was unlike anything anyone had ever seen, trench warfare, millions dead,

539
00:26:14,680 --> 00:26:18,400
entire national economies totally mobilized for years. But the real

540
00:26:18,440 --> 00:26:21,680
problem for the Rosschilds was their own structure. Remember the

541
00:26:21,759 --> 00:26:22,839
five arrows right.

542
00:26:22,799 --> 00:26:25,480
Speaker 1: London, Paris, Frankfurt, Vienna, Naples.

543
00:26:25,680 --> 00:26:29,319
Speaker 2: Well, by nineteen fourteen you have Austrian and German Rothschild

544
00:26:29,400 --> 00:26:32,640
branches and you have French and British Rothschild branches.

545
00:26:32,680 --> 00:26:34,839
Speaker 1: Oh no, they were at war with themselves.

546
00:26:34,920 --> 00:26:37,920
Speaker 2: Literally, family members were on opposite sides of the trenches.

547
00:26:38,319 --> 00:26:41,680
It completely paralyzed their ability to act as a unified

548
00:26:41,720 --> 00:26:44,799
supranational entity, which had always been their strength. They couldn't

549
00:26:44,799 --> 00:26:48,880
move money or information between branches because it would be treason. Meanwhile,

550
00:26:48,960 --> 00:26:52,319
the House of Morgan, which was firmly Anglo American, could

551
00:26:52,359 --> 00:26:55,160
go all in on financing the Allied side. Morgan became

552
00:26:55,200 --> 00:26:57,319
the banker for the war. The ross Childs were just

553
00:26:57,640 --> 00:26:58,519
trying to survive it.

554
00:26:58,559 --> 00:27:00,640
Speaker 1: And then comes World War Two. It wasn't just about

555
00:27:00,640 --> 00:27:02,400
business anymore. This was existential.

556
00:27:02,720 --> 00:27:06,599
Speaker 2: It absolutely was the rise of Hitler. The Nazis targeted

557
00:27:06,599 --> 00:27:10,400
the Rothschild specifically in their propaganda. They were the poster

558
00:27:10,519 --> 00:27:15,000
children for the vile Jewish banking conspiracy myths. When Hitler

559
00:27:15,000 --> 00:27:17,319
annexed Austria, the first thing he did was seized the

560
00:27:17,359 --> 00:27:20,880
Rothschild Bank in Vienna. When he took France, the Paris

561
00:27:20,960 --> 00:27:22,839
Rothschilds had to flee for their lives.

562
00:27:23,119 --> 00:27:27,559
Speaker 1: The source mentions they lost everything, properties, priceless art assets seized.

563
00:27:28,200 --> 00:27:32,559
Speaker 2: The financial devastation was immense. Palaces were confiscated, their legendary

564
00:27:32,640 --> 00:27:35,680
art collections were stolen by Hermann Goring. The Vienna branch

565
00:27:35,759 --> 00:27:38,000
was destroyed forever. The family had to run to New

566
00:27:38,079 --> 00:27:40,880
York and London as refugees. By the end of nineteen

567
00:27:41,000 --> 00:27:44,319
forty five of the richest family in history was still wealthy, yes,

568
00:27:44,519 --> 00:27:46,839
but compared to their peak, they were a shadow of

569
00:27:46,880 --> 00:27:49,799
their former selves. The world they had built was gone, and.

570
00:27:49,799 --> 00:27:52,920
Speaker 1: Yet they didn't disappear. That's the thrilling thread here, isn't it.

571
00:27:52,960 --> 00:27:56,200
They rebuilt, but they changed right. They went quiet.

572
00:27:56,319 --> 00:27:59,920
Speaker 2: They pivoted into the shadows, and a Rothschild in London

573
00:28:00,119 --> 00:28:03,000
under new leadership after the war, decided to focus on

574
00:28:03,079 --> 00:28:06,799
what they were good at, government connections and above all, discretion.

575
00:28:07,200 --> 00:28:09,599
They became a private club. They weren't trying to be

576
00:28:09,640 --> 00:28:11,839
the biggest bank in the world anymore. It just wanted

577
00:28:11,839 --> 00:28:13,839
to be the most exclusive and trusted.

578
00:28:14,400 --> 00:28:16,839
Speaker 1: But even in the shadows, you can step on a rake.

579
00:28:17,599 --> 00:28:20,240
The source brings up the Robert Maxwell scandal in the

580
00:28:20,279 --> 00:28:23,359
nineteen nineties. I remember the headline about him falling off

581
00:28:23,400 --> 00:28:25,720
his yacht, but Phyllison on the rothschild connection.

582
00:28:26,240 --> 00:28:30,240
Speaker 2: So Robert Maxwell medium mogul, larger than life, a bit

583
00:28:30,279 --> 00:28:32,599
of a bully in the eighties. He was looking for

584
00:28:32,640 --> 00:28:35,240
credibility and money to build his empire. He went to

585
00:28:35,319 --> 00:28:38,359
the Rothschilds. They helped take his company's public They advised

586
00:28:38,400 --> 00:28:41,119
him on deals. It gave him this stamp of a lead.

587
00:28:40,960 --> 00:28:43,119
Speaker 1: Approval, and then he fell off his yacht.

588
00:28:42,920 --> 00:28:46,160
Speaker 2: Under very mysterious circumstances. Yes, and after he died it

589
00:28:46,200 --> 00:28:48,759
was discovered that he had secretly looted hundreds of millions

590
00:28:48,799 --> 00:28:52,200
of pounds from his own employees' pension funds. It was

591
00:28:52,240 --> 00:28:54,119
one of the biggest frauds in British history.

592
00:28:54,319 --> 00:28:56,480
Speaker 1: Were the Rothschilds involved in the fraud itself.

593
00:28:56,759 --> 00:28:59,240
Speaker 2: No, there was never any evidence of that. They were

594
00:28:59,319 --> 00:29:02,559
duped like many others, but they were his bankers. The

595
00:29:02,680 --> 00:29:06,079
name was all over his companies. It was deeply embarrassing.

596
00:29:06,160 --> 00:29:10,000
It violated that core rule of reputation. Above all, it

597
00:29:10,119 --> 00:29:13,279
showed that perhaps their famous judgment wasn't what it used

598
00:29:13,319 --> 00:29:15,160
to be. It was a major bruise on the brand.

599
00:29:15,319 --> 00:29:17,680
Speaker 1: And this leads us into the modern era and what

600
00:29:17,720 --> 00:29:21,000
the source calls the civil war inside the family, the

601
00:29:21,039 --> 00:29:24,680
battle between Jacob and Evelyn Rothschild. This feels like a

602
00:29:24,680 --> 00:29:27,400
plot line straight from that HBO show Succession.

603
00:29:27,480 --> 00:29:30,000
Speaker 2: It is pure succession. In the nineteen eighties, you had

604
00:29:30,000 --> 00:29:32,759
a major split in the British branch. On one side,

605
00:29:32,759 --> 00:29:35,319
you had Sir evelynd De Rothschild the chairman. He wanted

606
00:29:35,319 --> 00:29:38,839
to keep the bank small, family owned, conservative or traditional

607
00:29:38,880 --> 00:29:42,079
boutique advisory firm okay. On the other side you had

608
00:29:42,119 --> 00:29:45,319
his cousin, Jacob Rothschild. And Jacob looked at Wall Street.

609
00:29:45,720 --> 00:29:48,200
He saw the rise of the megabanks, the trading floors,

610
00:29:48,240 --> 00:29:50,839
the aggression of the eighties, and he wanted to expand.

611
00:29:50,920 --> 00:29:51,880
He wanted to get bigger.

612
00:29:51,960 --> 00:29:54,799
Speaker 1: He wanted to pull a Nathan go for Broke exactly.

613
00:29:54,920 --> 00:29:56,799
Speaker 2: He wanted to merge with other banks, get into new

614
00:29:56,839 --> 00:30:01,920
lines of business, modernize, and basically said no. He believed

615
00:30:01,920 --> 00:30:04,799
that family control is more important than growth.

616
00:30:04,880 --> 00:30:05,440
Speaker 1: So who won.

617
00:30:05,559 --> 00:30:09,519
Speaker 2: Evelyn won, He held a chairmanship, Jacob left or was

618
00:30:09,559 --> 00:30:12,200
pushed out, depending on who you ask and started his

619
00:30:12,279 --> 00:30:17,400
own very successful investment fund called rit Capital. But the

620
00:30:17,480 --> 00:30:21,599
main Rothschild Bank and M Rothschild and Sons remained on

621
00:30:21,640 --> 00:30:24,960
that conservative path. And this decision is the key to

622
00:30:25,079 --> 00:30:26,279
understanding where they are.

623
00:30:26,160 --> 00:30:27,960
Speaker 1: Today, because if you look at a list of the

624
00:30:27,960 --> 00:30:31,319
biggest banks in the world today JP, Morgan, Chase, Goldman,

625
00:30:31,440 --> 00:30:35,000
Sachs City, the name Rothschild isn't on that list.

626
00:30:35,079 --> 00:30:37,480
Speaker 2: It's not oh and that is by design. They made

627
00:30:37,519 --> 00:30:40,599
a conscious choice. They chose longevity over dominance. If they

628
00:30:40,599 --> 00:30:42,680
had gone public, if they had merged and expanded like

629
00:30:42,799 --> 00:30:45,400
Jacob wanted, they might be a trillion dollar bank today,

630
00:30:45,519 --> 00:30:47,279
but they wouldn't be the Rothschilds. They would just be

631
00:30:47,319 --> 00:30:50,039
another global corporation owned by faceless shareholders.

632
00:30:50,119 --> 00:30:52,559
Speaker 1: So today, in twenty twenty six, what is the House

633
00:30:52,559 --> 00:30:53,759
of Rothschild? What do they do?

634
00:30:53,960 --> 00:30:58,839
Speaker 2: They're a diversified empire of wealth management, private equity, and philanthropy.

635
00:30:59,400 --> 00:31:02,440
They are they are the people you call when you

636
00:31:02,640 --> 00:31:06,160
want to sell a multi billion dollar company quietly. They

637
00:31:06,200 --> 00:31:09,519
are the people government's call when they need discrete financial advice.

638
00:31:09,920 --> 00:31:13,000
They were still incredibly wealthy and influential, but they are

639
00:31:13,160 --> 00:31:16,480
as the title of one book suggests an empire of shadows.

640
00:31:17,000 --> 00:31:19,440
Speaker 1: It's just a fascinating arc. We started with Mayor in

641
00:31:19,480 --> 00:31:23,119
the ghetto, desperate to break out. We saw Nathan conquer

642
00:31:23,160 --> 00:31:25,680
the world with speed and aggression. We saw them miss

643
00:31:25,720 --> 00:31:30,160
the American boom, and now they've settled into this comfortable, quiet,

644
00:31:30,359 --> 00:31:31,240
enduring power.

645
00:31:31,359 --> 00:31:33,960
Speaker 2: They survived at the end of the day. That is

646
00:31:34,000 --> 00:31:37,720
the ultimate metric. The Habsburgs are gone, the Romanovs are gone,

647
00:31:37,799 --> 00:31:40,160
the Ottoman Empire is gone. Lehman Brothers is gone. The

648
00:31:40,240 --> 00:31:41,759
Rothschilds are still here.

649
00:31:41,920 --> 00:31:43,839
Speaker 1: Which brings us to the big question for all of

650
00:31:43,880 --> 00:31:46,720
you listening today. We talked about how the Rothschilds, especially

651
00:31:46,759 --> 00:31:50,279
in the twentieth century, prioritized family unity and legacy over

652
00:31:50,359 --> 00:31:54,200
maximizing every single profit opportunity. They missed the tech boom,

653
00:31:54,240 --> 00:31:57,079
they largely missed the American century, all to keep control

654
00:31:57,079 --> 00:31:58,119
within the family.

655
00:31:58,000 --> 00:32:01,359
Speaker 2: Right and in today's economy, the mantra is move fast

656
00:32:01,640 --> 00:32:05,200
and break things, grow at all costs, become a unicorn

657
00:32:05,279 --> 00:32:06,119
or bust.

658
00:32:06,440 --> 00:32:09,200
Speaker 1: So here is the question for you. Is that kind

659
00:32:09,240 --> 00:32:13,079
of multi generational patience a lost art or is it

660
00:32:13,119 --> 00:32:16,240
the only way to truly survive for centuries? If you

661
00:32:16,359 --> 00:32:20,240
had to choose absolute global dominance for fifty years, like

662
00:32:20,279 --> 00:32:23,720
the Rothschild's had in the nineteenth century, or steady quiet

663
00:32:23,720 --> 00:32:26,480
influence for two hundred and fifty years. Which one do

664
00:32:26,519 --> 00:32:26,920
you pick.

665
00:32:27,119 --> 00:32:29,519
Speaker 2: It's the difference between being a firework and being a star.

666
00:32:29,839 --> 00:32:32,000
A firework is amazing, everyone looks at it, but it's

667
00:32:32,039 --> 00:32:34,440
gone in seconds. A star just keeps burning.

668
00:32:34,519 --> 00:32:36,640
Speaker 1: Oh I like that. A firework and a star. That's

669
00:32:36,640 --> 00:32:38,759
a great way to put it. Listeners, we really want

670
00:32:38,759 --> 00:32:40,599
to know what you think. Head over to the comments

671
00:32:40,599 --> 00:32:44,039
and let us know your pick dominance or longevity.

672
00:32:43,599 --> 00:32:46,079
Speaker 2: And tell us if you think anyone today, maybe a Musk,

673
00:32:46,119 --> 00:32:48,480
maybe a Bezos, is building a dynasty that you think

674
00:32:48,519 --> 00:32:51,359
will actually last two hundred years or will they all

675
00:32:51,400 --> 00:32:52,000
just fizzle out?

676
00:32:52,400 --> 00:32:54,559
Speaker 1: Great question. Thanks so much for joining us on these

677
00:32:54,599 --> 00:32:56,119
thrilling threads. We'll see you next time.

678
00:32:56,200 --> 00:32:56,920
Speaker 2: Goodbye everyone,