Rich as a Rothschild? An introduction
It would be pointless to begin this book by stating that James de Rothschild was wealthy, a millionaire many times over. The fact has long been a matter of public knowledge. But just how rich was he? And compared to whom was he rich? Herein lies an interesting question, one however that yields to no easy answer. Still, given the nature of this story, I must attempt to provide some practical way of estimating James' relative wealth, so as to save the reader the nuisance of wondering what the modern equivalent may be every time a monetary figure appears in the text.
First, it is important to know that from 1815 until 1868, the year James died, the value of the French franc remained constant. This permits us to understand, once the Baron's worth has been estimated at 120,000 francs in 1815, at 20 million in the years before 1830, at 40 million under Louis-Philippe (1830-48), and at 150 million in 1868, that the phenomenal growth of the Rothschild fortune in France was real and not a product of inflation. But what does it mean in terms of today's money? To imagine the wealth of Fouquet, whose vast fortune so antagonized Louis XIV that the young monarch confiscated it, is not the same thing as reading about the financial empire of Dassault, the twentieth-century magnate who led France's booming aeronautics industry. The fact that James bought an eighteenth-century mansion on the Place de la Concorde for slightly more than a million of his francs and that an Arab Sheik recently spent 50 million of our francs to acquire a similar eighteenth-century mansion on the same square provides us with information of two quite different orders. While the second figure is tangible enough, the first remains an abstraction for the contemporary mind. Comparison therefore fails as a technique for resolving the worrisome problem of how to translate old money into current values. Moreover, it is not enough merely to multiply Louis-Philippe's franc by 6.30, the rate established in a 1979 study of France's price index, in order to obtain a true sense of an equivalence in contemporary francs.
To begin with, nineteenth-century fortunes were considerably smaller, in both size and number, than modern ones. Wealth began to grow at an accelerating rate only about 1830, when it truly soared, as can be seen in the curve of the French nation's real per capita income.^ Stated in another way, the fortune of an early nineteenth-century millionaire, when measured in constant money, would appear quite insufficient to the great tycoons of today. Bernard Delessert, one of the richest men in France, left an estate worth 11 million at his death in 1847. Now, even 69 million (the value of the Delessert fortune when multiplied by 6.30) would not place the owner among the wealthiest people of his time. Conversely, it was possible in 1840 to live, albeit badly, on a subsistence income of 40 francs a month. In 1983, no one would dare claim that 250 francs (30 dollars or 20 pounds) constitute even a minimum monthly wage.
Then, too, a fortune is more than just a statistic; it is essentially the power to purchase so many acres of land, to employ so many workers, to maintain so many residences, or, on a different level, to dine in a certain style and take a certain kind of vacation. But little that money can buy has failed to change in relative value during the past century. Indeed, the price of a haircut may be the only thing that continues unmodified to any significant degree.’ Most goods and services cost a great deal less than they did a century ago. The real price of a hectar of French farm land, for instance, has gone from 6,550 to 703, a Paris-Toulouse train ticket from 1,360 to 27, and a good seat at the Opera from 57.8 to 8.6. The cost of a postage stamp or a newspaper reflects even more spectacular reductions. Only servants' wages have evolved in inverse proportion. An experienced valet, for example, once earned about 600 francs a year, with a maid receiving some 350 francs, and this in the best houses. The great Careme, the most celebrated chef of the nineteenth century, earned an annual salary of only 2,000 francs during his reign over James' kitchen. Meanwhile, the minimum wage in 1830 was considered to be 450 francs a year. By the very nature of things, of course, servants enjoyed rather considerable advantages, and one need not shed too many tears for Careme, since it was a notorious fact of the time that "the rake-off at M. de Rothschild's was equal to the income from a large farm."' Still, even lower middle class households could boast one or two domestics.
This reveals yet another difficulty for those determined to compare living standards, a difficulty that stems from fundamental changes in consumption. The luxury of 1830 is the necessity of 1980; what was once rare has become commonplace. Heating costs, all but nonexistent in the budgets of our forebears, are substantial today, and this is true for everybody, whatever his place in the socioeconomic scale. Sugar, coffee, and even salad (think of the rapture experienced by Zola's Gervaise at the prospect of eating lettuce) were practically unknown in the meals of nineteenth-century workers and peasants. Out of an annual salary of 450 francs, the Parisian laborer devoted 347 francs to food, with 110 of them going for bread. Today, the cost of bread is almost imperceptible in the budget of a working man's household. And few would now classify a cup of sweetened coffee among the great luxuries of life.
The evolution of prices simply contains too many disparities for it to serve as a basis for calculating living standards or purchasing power. Depending on the commodity being considered—sugar or flour, for instance—one can arrive at quite different conclusions. With a million francs, James in 1848 could have bought 780 hectars of good land; today, when the average price of a hectar of arable land is 19,350 francs, 783 hectars would cost him 15,350,000 francs.’ Meanwhile, if we take the price of James' mansion as reference point, it becomes apparent that what cost a million around 1830 would now command a price of 50 million. Clearly, the results of the two comparisons are so different as to be meaningless, even though real estate is an important element in any consideration of purchasing power.
If we must abandon the idea of finding a precise modern expression for a nineteenth-century fortune, there are however a few benchmarks that can help guide us through the financial data that inevitably well up in the life story of a man so utterly preoccupied with money as James de Rothschild. Eighty per cent of the population of France around 1840 had a per capita income of 500 francs a year, and fifteen percent between 2,000 to 20,000 francs. The middle class, with disposable income ranging from 20,000 to 500,000 francs, accounted for only five per cent of the population, while the financial aristocracy comprised a mere dozen families, each of which, however, possessed wealth sufficient to generate annual revenues in excess of 500,000 francs. Jacques Laffitte, who for a brief period under the Restoration controlled a fabulous fortune, estimated at close to 30 million, gave his daughter a dowry of 4 million, then regarded as a prodigious sum. To broaden the frame of reference, we should also note that in early nineteenth-century America, anyone with an accumulated wealth of 50,000 dollars was thought to be rich,’ for in order to live comfortably, an average American family needed only 800 dollars a year. But fortunes grew and multiplied at an incredible rate in the New World, and halfway through the century the affluent had assets averaging from 100,000 dollars to 200,000. There were twenty five millionaires living in New York, among them the Goelets with 2 million, Cornelius Vanderbilt with 1.5 million, and John Jacob Astor, by far the wealthiest man in North America. At his death in 1847 Astor left an estate worth 20 million, which was about the size of the fortune possessed by James on the eve of the Revolution of 1848. But Rothschild and Astor were peers in another respect, since they had both outstripped their nearest competitors in the financial sweepstakes by a factor of ten.
These then are the figures that the reader should keep in mind as he attempts to comprehend the ambitions and achievements of James de Rothschild. -- PP 11-14
