Recently one of the editors, Tyler Cowen, of a favourite blog of mine, The Marginal Revolution, posted a list of “Stock Market Facts”and unfortunately one of them is not a fact.
2. Nathan Mayer Rothschild arranged his own personal transportation to the Battle of Waterloo, which he viewed from a distance. He bribed a ship to hurry him back to London, where he traded on his information of a British victory.
This is a myth, but a very popular myth. It was made popular by countless anti-semitic plays, books and movies since the 1800s. (Examples: The play Rothschild Wins at Waterloo by Eberhard Müller (1936), The film Die Rothschilds by Erich Waschnek (1940) [Later renamed Aktien auf Waterloo (Shares in Waterloo)], and the films Jud-Süss and Der ewige Jude(The Eternal Jew.)
For details I recommend the biography by Niall Ferguson, who was the first non-Rothschild to be allowed to view the family’s records, released in two parts: Money’s Prophets, 1798-1848 and The World’s Banker, 1849-1999.
From the first book, I quote:
Just as the brothers appeared to be losing the peace, Bonaparte’s “Hundred Days” plunged Europe back into war, restoring the financial conditions in which the Rothschilds had hitherto thrived. This idea that Nathan profited from the dramatic events of 1815 is central to Rothschild mythology: it has been repeated claimed that, by obtaining the first news of Napoleon’s defeat at Waterloo–before even the government itself–Nathan was able to make a huge sum of money on the Stock Exchange. The more fabulous elements of the myth–Nathan’s presence at the battle itself, his riding alongside Wellington, his stormy night crossing from Ostend to Dover, his profits between £20 and £135 million–have long ago been debunked. Nevertheless, historians–including Victor Rothschild himself–have continued to assume that the Rothschilds benefited at least to some extent from the resumption of war and the final Allied victory. Even if the money made from buying British government stock immediately after the battle can have amounted to little more than £10,000, their total profits from the Waterloo campaign have been estimated at around a million pounds.
The real story is very different. [pg. 96]
I will defer readers to the book but while highlight some of the stranger elements.
If anything the events before and after Waterloo made the brothers worse off and required a great deal of financial maneuvering to get out off. What is often not realized when this story is told is that the Rothschilds were, at the time, financing Wellington’s campaign and thus a premature end to the war (rather than a prolonged one like Napoleon’s last episode) would have been disastrous, leaving them holding a great deal of money that no one wanted. Also, that the Rothschilds built a correspondence network of couriers and mailers that surpassed any one, private or public, of that day to connect the brothers in various cities. They routinely broke news of events of political import.
I recommend anyone interested in this event, or the Rothschilds in general, to read the Niall Ferguson biographies.