Alphonse James de Rothschild - As A Financier and Investor

As A Financier and Investor

Alphonse de Rothschild inherited a large fortune on the death of his father in 1868, including share positions in de Rothschild Frères bank and the Northern Railway company. He began his training in finance at a young age and his father put him in charge of the bank's gold bullion operations.

During the 1860s, great debates raged across Europe and the United States as to an appropriate monetary system for the changing times. In France, the prominent Péreire brothers bankers were proponents of paper money in contrast to Alphonse de Rothschild who defended preservation of France's bimetallism system. Initially, Alphonse had an influential supporter for his position through his long friendship with statesman Léon Say, a former employee of the Rothschild's Northern Railway Company who became the Minister of Finance in 1872. However, as part of the Latin Monetary Union France joined most of the rest of Europe and adopted the gold standard by 1873. In 1880, Alphonse de Rothschild put together the deal that saw the family take control of Société Le Nickel (SLN), a nickel mining business in New Caledonia.

During the Franco-Prussian War, Alphonse de Rothschild had guarded the ramparts of Paris on the eve of the Prussian siege. When a peace treaty was finally agreed to in January 1871, his bank would play a major role, not only in raising the five billion francs France was obliged to pay in reparations to the new German Empire, but in helping bring about economic stability. France made a dramatic financial recovery and repaid the reparations bill ahead of schedule which, under terms of the armistice, brought about an end to the German occupation of northern French territory in 1873. In contrast though, that same year, both the Berlin and Vienna stock markets crashed, plunging all of Central Europe into an economic depression. However, in less than a decade Alphonse de Rothschild would witness considerable economic upheaval in France. The collapse of the investment bank Société de l'Union Générale precipitated the 1882 stock market crash that triggered a downturn in the economy. In 1889, the Comptoir d'Escompte de Paris bank went into receivership and shortly thereafter the Panama scandals erupted, culminating in an official enquiry being conducted into the matter in 1893 by the French parliament.

His intense pressure pushed back the abrogation project of the décret Crémieux filed by the chief of the provisional government, Adolphe Thiers in 1871.

Already made a member of the Legion of Honor, for his contributions to the French economy at a time of crisis, in 1896 Alphonse de Rothschild was elevated to the Grand Cross, the highest class of the Legion of Honor.