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The Enduring Rothschild Myth

The Enduring Rothschild Myth
Profile photo of Chris Horlacher

Rothschild_Schloss_tIn the world of international financial conspiracy no family name is more vilified than that of Rothschild. The name is central to countless conspiracies and today the family is assumed by certain groups to be in control of many of the world’s central banks. To examine each of these and determine their veracity in a single article would be far too much for this author but one in particular bears discussion.

The enduring Rothschild myth centers on the London Stock Exchange, the battle of Waterloo and Nathan Rothschild. The story is most famously told in the film ‘The Money Masters’, produced by Bill Still. In the movie Still tells us that Nathan had posted an observer by the name of Ruthworth at the battle of Waterloo. His mission was to ascertain the victor and relay this information back to Nathan before the general public could become aware.

The result of this battle would have had significant consequences on the value of British bonds (“consols”) since a victorious Napoleon would present a credible threat to the British government. As it so happened, Napoleon was defeated and Mr. Ruthworth dutifully relayed this information to Nathan days before official informants could do the same.

Nathan then spreads the rumour that Napoleon was, in fact, victorious. The Rothschild’s intelligence network was legendary and investors believed what they were hearing was genuine. This caused a panicked sell-off of British consols at the London Stock Exchange. Nathan used this opportunity to purchase huge amounts of these securities and when news of the genuine victor reached London, he profited immensely from the trade.  With the vast amounts of wealth he now controlled Nathan was able to bring the British government and Bank of England under his influence.

A fantastic tale… and a complete myth.

As with many myths, it may have its roots in a real event. In 1814, a year before the battle of Waterloo, a group of men led by Lord Cochrane conspired to spread the rumour that Napoleon was dead. The men traded on this information, leading to some great profits… though not the legendary amounts that Nathan Rothschild was alleged to amass from a similar gambit. This became known as the Great Stock Exchange Fraud of 1814, and ended in the conviction of Lord Cochrane for fraud.

Just over two decades after the Battle of Waterloo a work of fiction appeared in Ward’s Miscellany, published in 1837 on page 474 titled “An Adventure of the Stock Exchange.” The story tells the tale of Mr. F who, upon receiving advance notice from someone identified only as “the Frenchman” that Napoleon had been defeated at Waterloo, proceeds to immediately purchase large quantities of British consols. As word of Napoleon’s defeat spreads, the price of British bonds rises and Mr. F pockets a handsome profit, enough to purchase an estate he had his eyes on for some time.

Fast forward another century to Germany and we see that this myth is once again being invoked. This time under the supervision of Nazi propaganda minister Joseph Goebbels and director Erich Waschneck. The film “The Rothschilds’ Shares in Waterloo” was released in 1940 and was intended to further stir up anti-semitism in the now warring country. The film portrays Nathan Rothschild employing a number of informants at the Battle of Waterloo in order to inform him of the victor. After being told that the British had won, Nathan spreads the rumour that the British had actually lost. This causes a panicked sell-off of British consols at the London Stock Exchange.  Nathan purchases these at a tremendous discount, ultimately multiplying his family’s wealth many-fold. Sound like a familiar story? The similarities don’t end there. In the movie only a single informant successfully relayed the information back to Nathan.

His name? Mr. Ruthworth.

Could this possibly be a fanciful retelling of actual events on the London Stock Exchange in 1815? Not likely as price data of British consols is easily accessible. In “The Ascent of Money”, author and economist Niall Ferguson examines this very story and the price data shows a very different series of events.

graph20

As can be seen there is no evidence of a great crash in the price of consols in the days following the Battle on June 18, 1815. As reported in the London Courier on June 20, 1815 Nathan started buying large quantities of bonds speculating that, with the war being over, the British government would stop its wartime borrowing thus causing the price of bonds to rise. While he did realize a profit of around 40% over a 30-month period on this particular trade, that is hardly the monumental amounts described by Bill Still and other promulgators of the Rothschild myth.

It is unfortunate that a fictional story created by Nazis lives on until this day. The existential threat to the fabric of civilization presented by central banks is very real. Stories such as these only serve to distract from that. As the great H.L. Mencken warned us:

“For every complex problem there is an answer that is clear, simple, and wrong.”

  • jimmygulag

    manipulating the history is more fun….

  • LeslieFish

    Heheheheh. Manipulating the news to manipulate prices is a much older game than that; it was first practiced, that we know of, by Crassus in ancient Rome. There were plenty of other financiers who practiced shady tricks in the centuries since. The reason the Rothschilds were blamed for so much of this is simply that they were the only Jews in the game, and therefore easy scapegoats for the Christians.

  • LeslieFish

    Heheheheh. Manipulating the news to manipulate prices is a much older game than that; it was first practiced, that we know of, by Crassus in ancient Rome. There were plenty of other financiers who practiced shady tricks in the centuries since. The reason the Rothschilds were blamed for so much of this is simply that they were the only Jews in the game, and therefore easy scapegoats for the Christians.

Articles
Profile photo of Chris Horlacher

Chris began his career as an auditor at a Big 4 firm and before the age of 30 was the CFO of a start-up stock brokerage that now manages over $4 billion in assets. He went on to found his own management consulting firm and has been instrumental in numerous successful multi-million dollar start-ups and strategic initiatives for Canada’s largest companies, SME's and non-profits. Possessing Chartered Accountant and Chartered Professional Accountant designations, Chris is also certified by the Canadian Securities Institute as a partner, director and chief financial officer. His company website is www.mycfoweb.ca.

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