It sometimes happened that notwithstanding Rothschild's profound secrecy, he was overcome by stratagem. The following circumstance, which was related to Mr. Margoliouth by a person who knew Rothschild well, will illustrate the above statement. When the Hebrew financier lived at Stamford Hill, there resided opposite to him another very wealthy dealer in the Stock Exchange, Lucas by name. The latter returning home one night at a late hour from a convivial party, observed a carriage and four standing before Rothschild's gate, upon which he ordered his own carriage out of the way, and commanded his coachman to await in readiness his return. Lucas went stealthily and watched, unobserved, the movements at Rothschild's gate. He did not lie long in ambush before he heard some one leaving the Hebrew millionaire's mansion, and going towards the carriage. He saw Rothschild, accompanied by two muffled figures, step into the carriage, and heard the word of command, "To the City." He followed Rothschild's carriage very closely, but when he reached the top of the street in which Rothschild's office was situated, Lucas ordered his carriage to stop, from which he stepped out, and proceeded, reeling to and fro through the street, feigning to be mortally drunk. He made his way in the same mood as far as Rothschild's office, and sans ceremonie opened the door, to the great consternation and terror of the housekeeper, uttering sundry ejaculations in the broken accents of Bacchus' votaries. Heedless of the affrighted housekeeper's remonstrances, he opened Rothschild's private office, in the same staggering attitude, and fell down flat on the floor.
Rothschild and his friends became very much alarmed. Efforts were made to restore and remove the would-be drunkard, but Lucas was too good an actor, and was therefore in such a fit as to be unable to be moved hither or thither. "Should a physician be sent for?" asked Rothschild. But the housekeeper threw some cold water into Lucas's face, and the patient began to breathe a little more naturally, and fell into a sound snoring sleep. He was covered over, and Rothschild and the strangers proceeded unsuspectingly to business. The strangers brought the good intelligence that the affairs in Spain were all right, respecting which the members of the Exchange were, for a few days previous, very apprehensive, and the funds were therefore in a rapidly sinking condition. The good news could not, however, in the common course of despatch, be publicly known for another day. Rothschild therefore planned to order his brokers to buy up, cautiously, all the stock that should be in the market by twelve o'clock the following day. He sent for his principal broker thus early, in order to entrust him with the important instruction.
The broker was rather tardier than Rothschild's patience could brook; he therefore determined to go himself. As soon as Rothschild was gone, Lucas began to recover, and by degrees was able to get up, though distracted, as he said, "with a violent headache," and insisted, in spite of the housekeeper's expostulations, upon going home. But Lucas went to his broker, and instructed him to buy up all the stock he could get by ten o'clock the following morning. About eleven o'clock Lucas met Rothschild, and inquired satirically how he, Rothschild, was off for stock. Lucas won the day, and Rothschild is said never to have forgiven "the base, dishonest, and nefarious stratagem."
Yet, with all his hoardings, says Mr. Margoliouth, Rothschild was by no means a happy man. Dangers and assassinations seemed to haunt his imagination by day and by night, and not without grounds. Many a time, as he himself said, just before he sat down to dinner, a note would be put into his hand, running thus:—"If you do not send me immediately the sum of five hundred pounds, I will blow your brains out." He affected to despise such threats; they, nevertheless, exercised a direful effect upon the millionaire. He loaded his pistols every night before he went to bed, and put them beside him. He did not think himself more secure in his country house than he did in his bed. One day, while busily engaged in his golden occupation, two foreign gentlemen were announced as desirous to see Baron Rothschild in propriâ personâ. The strangers had not the foresight to have the letters of introduction in readiness. They stood, therefore, before the Baron in the ludicrous attitude of having their eyes fixed upon the Hebrew Crœsus, and with their hands rummaging in large European coat-pockets. The fervid and excited imagination of the Baron conjured up a multitudinous array of conspiracies. Fancy eclipsed his reason, and, in a fit of excitement, he seized a huge ledger, which he aimed and hurled at the mustachioed strangers, calling out, at the same time, for additional physical force. The astonished Italians, however, were not long, after that, in finding the important documents they looked for, which explained all. The Baron begged the strangers' pardon for the unintentional insult, and was heard to articulate to himself, "Poor unhappy me! a victim to nervousness and fancy's terrors! and all because of my money!"
Rothschild's mode of doing business when engaging in large transactions (says Mr. Grant) was this. Supposing he possessed exclusively, which he often did, a day or two before it could be generally known, intelligence of some event, which had occurred in any part of the Continent, sufficiently important to cause a rise in the French funds, and through them on the English funds, he would empower the brokers he usually employed to sell out stock, say to the amount of £500,000. The news spread in a moment that Rothschild was selling out, and a general alarm followed. Every one apprehended that he had received intelligence from some foreign part of some important event which would produce a fall in prices. As might, under such circumstances, be expected, all became sellers at once. This, of necessity, caused the funds, to use Stock Exchange phraseology, "to tumble down at a fearful rate." Next day, when they had fallen, perhaps, one or two per cent., he would make purchases, say to the amount of £1,500,000, taking care, however, to employ a number of brokers whom he was not in the habit of employing, and commissioning each to purchase to a certain extent, and giving all of them strict orders to preserve secrecy in the matter. Each of the persons so employed was, by this means, ignorant of the commission given to the others. Had it been known the purchases were made by him, there would have been as great and sudden a rise in the prices as there had been in the fall, so that he could not purchase to the intended extent on such advantageous terms. On the third day, perhaps, the intelligence which had been expected by the jobbers to be unfavourable arrived, and, instead of being so, turned out to be highly favourable. Prices instantaneously rise again, and possibly they may get one and a-half or even two per cent. higher than they were when he sold out his £500,000. He now sells out, at the advanced price, the entire £1,500,000 he had purchased at the reduced prices. The gains by such extensive transactions, when so skilfully managed, will be at once seen to be enormous. By the supposed transaction, assuming the rise to be two per cent., the gain would be £35,000. But this is not the greatest gain which the late leviathian of modern capitalists made by such transactions. He, on more than one occasion, made upwards of £100,000 on one account.
But though no person during the last twelve or fifteen years of Rothschild's life (says Grant) was ever able, for any length of time, to compete with him in the money market, he on several occasions was, in single transactions, outwitted by the superior tactics of others. The gentleman to whom I allude was then and is now the head of one of the largest private banking establishments in town. Abraham Montefiore, Rothschild's brother-in-law, was the principal broker to the great capitalist, and in that capacity was commissioned by the latter to negotiate with Mr. —— a loan of £1,500,000. The security offered by Rothschild was a proportionate amount of stock in Consols, which were at that time 84. This stock was, of course, to be transferred to the name of the party advancing the money, Rothschild's object being to raise the price of Consols by carrying so large a quantity out of the market. The money was lent, and the conditions of the loan were these—that the interest on the sum advanced should be at the rate of 4½ per cent., and that if the price of Consols should chance to go down to 74, Mr. —— should have the right of claiming the stock at 70. The Jew, no doubt, laughed at what he conceived his own commercial dexterity in the transaction; but, ere long, he had abundant reason to laugh on the wrong side of his mouth; for, no sooner was the stock poured into the hand of the banker, than the latter sold it, along with an immensely large sum which had been previously standing in his name, amounting altogether to little short of £3,000,000. But even this was not all. Mr. —— also held powers of attorney from several of the leading Scotch and English banks, as well as from various private individuals, who had large property in the funds, to sell stock on their account. On these powers of attorney he acted, and at the same time advised his friends to follow his example. They at once did so, and the consequence was that the aggregate amount of stock sold by himself and his friends conjointly exceeded £10,000,000. So unusual an extent of sales, all effected in the shortest possible time, necessarily drove down the prices. In an incredibly short time they fell to 74; immediately on which, Mr. —— claimed of Rothschild his stock at 70. The Jew could not refuse: it was in the bond. This climax being reached, the banker bought in again all the stock he had previously sold out, and advised his friends to re-purchase also. They did so; and the result was, that in a few weeks Consols reached 84 again, their original price, and from that to 86. Rothschild's losses were very great by this transaction; but they were by no means equal to the banker's gains, which could not have been less than £300,000 or £400,000.
The following grotesque sketch of the great Rothschild is from the pen of a clever anonymous writer:—"The thing before you," says the author quoted, "stands cold, motionless, and apparently speculationless, as the pillar of salt into which the avaricious spouse of the patriarch was turned; and while you start with wonder at what it can be or mean, you pursue the association, and think upon the fire and brimstone that were rained down. It is a human being of no very Apollo-like form or face: short, squat, with its shoulders drawn up to its ears, and its hands delved into its breeches'-pockets. The hue of its face is a mixture of brick-dust and saffron; and the texture seems that of the skin of a dead frog. There is a rigidity and tension in the features, too, which would make you fancy, if you did not see that that were not the fact, that some one from behind was pinching it with a pair of hot tongs, and that it were either afraid or ashamed to tell. Eyes are usually denominated the windows of the soul; but here you would conclude that the windows are false ones, or that there is no soul to look out at them. There comes not one pencil of light from the interior, neither is there one scintillation of that which comes from without reflected in any direction. The whole puts you in mind of 'a skin to let;' and you wonder why it stands upright without at least something within. By-and-by another figure comes up to it. It then steps two paces aside, and the most inquisitive glance that ever you saw, and a glance more inquisitive than you would ever have thought of, is drawn out of the erewhile fixed and leaden eye, as if one were drawing a sword from a scabbard. The visiting figure, which has the appearance of coming by accident, and not by design, stops but a second or two, in the course of which looks are exchanged which, though you cannot translate, you feel must be of most important meaning. After these, the eyes are sheathed up again, and the figure resumes its stony posture. During the morning numbers of visitors come, all of whom meet with a similar reception, and vanish in a similar manner; and last of all the figure itself vanishes, leaving you utterly at a loss as to what can be its nature and functions."
Abraham Goldsmid, a liberal and honourable man, who almost rivalled Rothschild as a speculator, was ruined at last by a conspiracy. Goldsmid, in conjunction with a banking establishment, had taken a large Government loan. The leaguers contrived to produce from the collectors and receivers of the revenue so large an amount of floating securities—Exchequer Bills and India Bonds—that the omnium fell to 18 discount. The result was Goldsmid's failure, and eventually his suicide. The conspirators purchased omnium when at its greatest discount, and on the following day it went up to 3 premium, being then a profit of about £2,000,000.
Goldsmid seems to have been a kind-hearted man, not so wholly absorbed in speculation and self as some of the more greedy and vulgar members of the Stock Exchange. One day Mr. Goldsmid observed his favourite waiter at the City of London Tavern very melancholy and abstracted. On being pressed, John confessed that he had just been arrested for a debt of £55, and that he was thinking over the misery of his wife and five children. Goldsmid instantly drew out his chequebook, and wrote a cheque for £100, the sight of which gladdened poor John's heart and brought tears into his eyes. On one occasion, after a carriage accident in Somersetshire, Goldsmid was carried to the house of a poor curate, and there attended for a fortnight with unremitting kindness. Six weeks after the millionaire's departure a letter came from Goldsmid to the curate, saying that, having contracted for a large Government loan, he (the writer) had put down the curate's name for £20,000 omnium. The poor curate, supposing some great outlay was expected from him for this share in the loan, wrote back to say that he had not £20,000, or even £20, in the world. By the next post came a letter enclosing the curate £1,500, the profit on selling out the £20,000 omnium, the premium having risen since the curate's name had been put down.
The vicissitudes of the Stock Exchange are like those of the gambling-table. A story is related specially illustrative of the rapid fortunes made in the old war-time, when the funds ran up and down every time Napoleon mounted his horse. Mr. F., afterwards proprietor of one of the largest estates in the county of Middlesex, had lost a fortune on the Stock Exchange, and had, in due course, been ruthlessly gibbeted on the cruel black board. In a frenzy, as he passed London Bridge, contemplating suicide, F. threw the last shilling he had in the world over the parapet into the water. Just at that moment some one seized him by the hand. It was a French ensign. He was full of a great battle that had been fought (Waterloo), which had just annihilated Bonaparte, and would restore the Bourbons. The French ambassador had told him only an hour before. A gleam of hope, turning the black board white, arose before the miserable man. He hurried off to a firm on the Stock Exchange, and offered most important news on condition that he should receive half of whatever profits they might realise by the operation. He told them of Waterloo. They rushed into the market, and purchased Consols to a large amount. In the meantime F., sharpened by misfortune, instantly proceeded to another firm, and made a second offer, which was also accepted. There were two partners, and the keenest of them whispered the other not to let F. out of his sight, while he sent brokers to purchase Consols. He might tell some one else. Lunch was then brought in, and the key turned on them. Presently the partner returned, red and seething, from the Stock Exchange. Most unaccountably Consols had gone up 3 per cent., and he was afraid to purchase. But F. urged the importance of the victory, and declared the funds would soon rise 10 or 12 per cent. The partners, persuaded, made immense purchases. The day the news of Waterloo arrived the funds rose 15 per cent., the greatest rise they were ever known to experience; and F.'s share of the profits from the two houses in one day exceeded £100,000. He returned next day to the Stock Exchange, and soon, amassed a large fortune; he then wisely purchased an estate, and left the funds alone for ever.