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REIGN OF ROTHSCHILDS - 9. The Eventful Years 1866 and 1870-1871

REIGN OF ROTHSCHILDS - 9. The Eventful Years 1866 and 1870-1871

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The Reign of the House of Rothschild (1830–1871) by Count Egon Caesar Corti.Chapter 9: The Eventful Years 1866 and 1870–1871.Count Egon Caesar Corti’s The Reign of the House of Rothschild (1830–1871), published in 1928, chronicles the Rothschild banking dynasty’s pivotal role in shaping European finance and politics during a transformative period. Chapter 9, titled “The Eventful Years 1866 and 1870–1871,” focuses on two critical moments: the Austro-Prussian War of 1866 and the Franco-Prussian War of 1870–1871. These conflicts reshaped the European power structure, with the Rothschilds navigating the financial and political challenges to maintain their influence. This description summarizes the chapter’s key themes, events, and insights, highlighting the Rothschilds’ strategic adaptability, their role in war financing, and their efforts to preserve their financial empire amid seismic geopolitical shifts.The Austro-Prussian War of 1866: A Turning PointChapter 9 opens with the Austro-Prussian War of 1866, a brief but decisive conflict that marked the rise of Prussia under Otto von Bismarck and the decline of Austrian influence in German affairs. Corti emphasizes the Rothschilds’ deep ties to the Austrian Habsburgs, particularly through Salomon von Rothschild in Vienna, which placed the family in a precarious position as Austria faced defeat. The war, culminating in the Battle of Königgrätz, led to the formation of the North German Confederation under Prussian leadership, fundamentally altering the balance of power in Europe. Corti details how the Rothschilds’ Vienna branch provided substantial loans to the Austrian government to fund the war effort. These loans were risky, given Austria’s weakening financial position and the uncertainty of the conflict’s outcome. Salomon worked tirelessly to secure the family’s investments, negotiating with Habsburg officials to ensure favorable terms. However, the Austrian defeat forced the Rothschilds to reassess their strategy, as their long-standing alliance with the Habsburgs became less secure. Simultaneously, the Rothschilds’ Frankfurt branch, led by Amschel Mayer Rothschild, engaged with Prussia to hedge the family’s bets. Corti describes how the Rothschilds provided loans to Prussia, recognizing Bismarck’s growing influence and the potential for Prussian dominance in a unified Germany. This dual strategy—supporting both sides of the conflict—reflected the Rothschilds’ pragmatic approach to maintaining influence regardless of the war’s outcome. The chapter highlights their use of rapid communication networks, including telegraphs, to coordinate financial decisions across their branches, ensuring they could respond swiftly to battlefield developments. The war’s aftermath, formalized by the Peace of Prague, saw Austria excluded from German affairs, weakening the Rothschilds’ Vienna branch. Corti notes that the family mitigated losses by diversifying their investments, particularly in railways and industrial ventures, which remained profitable despite the political upheaval. The chapter underscores their resilience, as they adapted to the new reality of Prussian ascendancy while maintaining ties with Austria.The Franco-Prussian War of 1870–1871: Financial and Political ChallengesThe second half of Chapter 9 focuses on the Franco-Prussian War of 1870–1871, a conflict that led to the unification of Germany and the fall of Napoleon III’s Second French Empire. Corti portrays this period as one of the most challenging for the Rothschilds, particularly for James de Rothschild in Paris, whose close ties to Napoleon III placed the family at risk as France faced defeat. The chapter details James’s role in financing France’s war effort. As tensions escalated between France and Prussia, the Rothschilds provided loans to Napoleon III’s government to fund military mobilization. Corti describes James’s cautious approach, as he recognized the financial strain of the war and the potential for French defeat. The Rothschilds’ Paris branch also faced competition from state-backed financial institutions, which sought to undermine their dominance. Despite these challenges, James leveraged his international connections to secure foreign capital, ensuring the bank’s liquidity during the war. The Prussian victory at Sedan and the subsequent collapse of the Second Empire in 1870 posed significant risks for the Rothschilds’ Paris operations. Corti recounts how James navigated the chaos of the Paris Commune, a revolutionary government that briefly seized control of the city in 1871. The Rothschilds’ Paris mansion and assets were vulnerable, but James’s diplomatic skills and financial resources allowed him to protect the family’s interests. He negotiated with the new French government, led by Adolphe Thiers, to secure loans for the post-war reconstruction, positioning the Rothschilds as key players in France’s ...
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