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 Point
Chapter 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 Challenges
The 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 recovery. In Prussia, the Rothschilds’ Frankfurt and London branches engaged with Bismarck to finance Germany’s war efforts. Corti highlights their role in underwriting bonds for the North German Confederation, which helped fund the war and the subsequent unification of Germany under Kaiser Wilhelm I. The chapter notes the Rothschilds’ ability to maintain relationships with both France and Prussia, a testament to their diplomatic finesse. This dual engagement ensured that the family remained indispensable to the victorious Prussian government, even as their French operations faced setbacks. 

The Rothschilds’ Broader Financial Strategy
Throughout Chapter 9, Corti emphasizes the Rothschilds’ strategic adaptability in the face of war and political upheaval. Their investments in railways, particularly in France, Austria, and Germany, continued to generate significant returns, offsetting losses from war financing. The chapter details their role in financing the expansion of railway networks, which facilitated trade and economic growth in the post-war period. These investments aligned with the broader trend of European industrialization, positioning the Rothschilds as pioneers in modern finance. Corti also highlights the family’s use of advanced communication systems to stay ahead of market trends and political developments. Their private courier network and early adoption of telegraphy allowed them to coordinate strategies across their branches, ensuring a unified response to the crises of 1866 and 1870–1871. This global reach gave them a competitive edge over rival banks, enabling them to navigate the financial disruptions caused by the wars. The chapter also explores the Rothschilds’ role in stabilizing European economies after the conflicts. In France, their loans to the Thiers government helped finance the massive war indemnity imposed by Germany, facilitating France’s economic recovery. In Germany, their financial support for Bismarck’s new empire strengthened their position in the emerging power. Corti notes that these efforts cemented the Rothschilds’ reputation as indispensable financiers, even as they faced public criticism for profiting from war.

Challenges and Controversies
Corti does not shy away from the controversies surrounding the Rothschilds’ activities. The chapter acknowledges the public resentment toward their wealth and influence, particularly in France, where their close ties to Napoleon III fueled accusations of opportunism. Anti-Semitic sentiments also intensified, as critics targeted the Rothschilds’ Jewish heritage to portray them as manipulative financiers. Corti balances this critique with recognition of their contributions to economic stability, arguing that their loans and investments were essential to Europe’s recovery from the wars. The chapter also explores the internal challenges faced by the Rothschilds. The death of James de Rothschild in 1868 marked a significant transition for the Paris branch, with his sons taking over leadership. Corti describes how the younger generation adapted to the challenges of the Franco-Prussian War, maintaining the family’s influence despite the loss of their patriarch. Similarly, the Vienna branch faced difficulties as Austria’s influence waned, but the Rothschilds’ diversified portfolio mitigated these setbacks. 

Corti’s Perspective and Key Themes
Corti portrays the Rothschilds as masters of financial statecraft, capable of navigating the complexities of war and political change. The chapter emphasizes their pragmatic approach, as they balanced alliances with rival powers to protect their interests. Their ability to finance both sides of conflicts, while controversial, ensured their survival in an era of upheaval. Corti admires their resilience but acknowledges the ethical ambiguities of their actions, particularly their role in war financing. The chapter also highlights the broader implications of the Rothschilds’ activities. Their loans and investments shaped the modern European economy, facilitating industrialization and economic recovery. However, their dominance fueled perceptions of undue influence, raising questions about the role of private bankers in public affairs. Corti presents a nuanced view, celebrating the Rothschilds’ ingenuity while recognizing the controversies surrounding their power.

Conclusion 
Chapter 9 of The Reign of the House of Rothschild provides a compelling account of the family’s role during two transformative conflicts: the Austro-Prussian War of 1866 and the Franco-Prussian War of 1870–1871. By detailing their financial support for warring powers, their investments in infrastructure, and their navigation of shifting alliances, Corti illustrates the Rothschilds’ enduring influence. The chapter serves as a case study in the intersection of finance and geopolitics, highlighting how the Rothschilds shaped Europe’s trajectory through their wealth, adaptability, and strat