# The Standing of European Houses

Marx wrote it in New York Daily Tribune on November 9, 1855.
​THE STANDING OF EUROPEAN HOUSES. In the present condition of monetary alfairs the utmost anxiety is naturally felt in business circles all over the world to form a correct estimate of the position of those leading houses upon whose stability that of the business world so much depends.
This is a question of the highest importance at a moment like this, when one of the most formidable wars ever recorded by ancient or modern history has broken upon the world, threatening with its inevitable concomitants-in the shape of pecuniary sacrifices and famine prices of the necessaries of life-to disturb the arrangements of labor and shake the world's financial equilibrum. It is a question of still more practical importance when it is considered that, however complicated the world business ramifications, the houses whose bills are considered good as cash are few in number. It is therefore important to consider to what extent the resources of these few houses may be affected. Let us begin by placing this broad fact before us: That this natural anxiety to have a thorough understanding of the position of those to whom we intrust our property has led in this country to the wholesome caution of laying the balance sheets of our banks, and in Europe those of the leading banks of England and of the public banks of Paris, Amsterdam, Berlin, and Vienna, open to the inspection of the public. Indeed, the straightforwardness given to their dealings by this publicity has most powerfully contributed in times of pressure and panic to allay the fears of the timorous, and to invigorate the confidence of the stouthearted. We may, indeed, question their ability to weather one or the other financial storm, but we are rarely tortured with doubts about the real character of their resources. These stand before the eyes and judgment of the world.
But not so with the great establishments of capitalists and financiers. Yet the influence they exercise should command still greater caution.
While that of banks is chiefly local. that of these establishments is universal. The bulk of bills in circulation to facilitate the barter trade in the various producte of Nature and the msnifeld labors of man are chiefly drawn upon a small bevy of financiers and merchants. Some are considered first rate-as Rothschild, Baring, and a few others; yet let any one attempt to give the precise particulars of their houses and it will soon be discovered how little is actually known about the real springs which keep these first-rate machines in such world-famed movement.
Of course in the instance of these few houses some data at least exist upon which a certain structure of confidence is made to rest. But even in these instances the data are vague and to a great extent unreliable, as they do not proceed-as in the case of banks-from authentic documentary sources, but simply from reports either idly or for a purpose cireulated, or from superleis1 inferences drawn from the appearance of their transactions and the prestige with which these appearances are surrounded by fancy and speculation.
But if little be known of the real positions of these leading houses, the knowledge of those of Inferior rank is still less. We all remember how, in the great crisis of 1847 and 1848, one house after another fell. When the books of the Reid Irvings, Gowers, and the like, were examined, the world was staggered to find that for years past these houses had been in a state of hopeless insolveney. In all these instances the fact loomed forth that while a man usually scrutinizes the character of a friend, and the chances of repayment before he aids him with even the smallest loan, men have been intrusting thousands to persons who were not friends but strangers, whose characters they could not read and whose resources they could not investigate. But even the warning thus given has not led to any healthy rule of investigation into the business resources of those houses that did not fall at the time, as is too painfully evidenced in the case of Paul, Strahan & Co. The crisis was not traced to the rottenness of principle in the men and the false pretense under which they obtained credit, but simply to some vague general notions of periodical irruptions inseparable from the soundest mercantile system. But the position of business houses remains in the same state of obecurity and doubt. No eye of scrutiny reets on the financiering establishments as on banks yet they make equal claims on the confidence of the world. Though these claims may differ in degree they do not in importance. Now, to take an eminent illustration as regards the leading financial house of the world, the Rothschilds, the most exaggerated notions prevail as to the extent of their resources. Their interest of course is to keep as little cash as possible uninvested. Their average amount of gold bars in the Ghetto of Frankfort does not exceed a couple of millions of dollars. All turns therefore on the character of their investments. These are principally in European securities and railway shares. and in fact the stability of the Rethechilds is intimately wound up with the status quo of Europe, All the petty German Governments, beside the big Austrian Government, are propped up by their resources. Now, in times of peace all their securities are as good as cash, as they are convertible all over Europe. But in times of war people are apt to lose confidence in any security. They sell them, and a process of hoarding begins, which is the propeller of scarcity.
Securities being east extensively on the market, their realization is attended more and more with difficulty until the Continental funds become ansalable, and thousands of the Rothschilds' capital desd ixtures. The Rothschilds have no vast landed estates to fall back on. like the Barings and other great merchants in Great Britain. They have all the Jewish aversion to land. Their wealth is invested in the bards of governments, and the solvency of some of these governmente--as for instance that of Austria-does not enjoy the highest reputation.
If in addition to the war we should see revolutionary outbreaks in Europe. consequent on the high price of food and other material pressure, the dangerous position of the Rothschilds will appear in its most aggravated form. But even in the present condition of things, unaggravated as it is by internal disturbance, we have every reason to question the blind faith which exists in the stability of the house. The genius which inspired the old Meyer and Nathan and Anselm has departed, And the surviving brothers are, with the exception of James in Paris, men without intellect and mere creatures in the hards of their pet brokers. If it were not absurd it would be injudicious to continue to repose so much faith in that house, when so many elements present themselves calculated to affect its stability.
Clustering round the Rothschilds we have all the Amsterdam, Frankfort, Copenhagen. Berlin, Paris, Vienna, Hamburg and London Jewish bankers, all more or less engaged in the barter trade of securities- the Bischoffsheims, the Foulds, the Mendelsohne, the Heines, the Jacobsons and Ries, the Hambros, the Hollanders and Lehrens-whose drafts all pass for first-rate, although a shock in the value of European securities cannot take place without unsettling the position of all and every one of them. Whatever disturbs the continental governments touches them sorely. So intimate is the union and so great the mutual dependence between the monopolists of power and the monopolists of money, that if the one fail, the other must go also.
This work was published before January 1, 1930, and is in the public domain worldwide because the author died at least 100 years ago.
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