page_title: Gerson von Bleichröder
section_title: Banker for Bismarck and the Prussian State
hierarchical_section_title: Gerson von Bleichröder / Banker for Bismarck and the Prussian State
caption_attribution_description: Deutsch: Gerson von Bleichröder
context_page_description: Gerson von Bleichröder was a Jewish German banker.
  Bleichröder was born in Berlin. He was the eldest son of Samuel Bleichröder, who founded the banking firm of S. Bleichröder in 1803 in Berlin. Gerson first joined the family business in 1839. In 1855 upon the death of his father, Gerson became the head of the banking firm. The bank maintained close contacts with the Rothschild family; the banking house of Bleichröder acted as a branch office in Berlin of the Rothschilds' bank.
  Traditionally, the Rothschilds represented the banking interests of the Austrian-controlled German Confederation in Europe. In the conflict between the rapidly rising and expanding nation of Prussia and the "pro-Austrian" German Confederation, the Rothschild Bank was largely caught in an uncomfortable position in the middle of the conflict.
context_section_description: Gerson Bleichröder served Bismarck at several crucial points during the period of time that Bismarck was the chief minister to the Prussian king.  As a result of the Schleswig War of 1864, Prussia and Austria, as joint victors in that war, were awarded the two German-speaking duchies of Schleswig and Holstein on August 1, 1864.   Prussia annexed the more northern duchy of Schleswig, while Austria was given annexation control over the more southern duchy of Holstein.  Austria did not share any border with the newly acquired duchies, but the duchy of Holstein was located between Schleswig to the north and Prussian-controlled territories to the south.  Austria sought to create difficulties for its up-and-coming rival—Prussia—by entertaining the idea of inviting the heir of the deposed House of Schleswig-Holstein-Sonderburg-Augustenburg—Duke Frederick VIII of Augustenburg—back to administer the Holstein duchy.  This solution was intolerable to Prussia because the Duke of Augustenburg was related to the royal family of Denmark.  The fear was that this would have brought Danish troops right back to same frontier that they had occupied prior to the war.  Furthermore, the Prussian-annexed Schleswig duchy (where the Prussian government was intending to upgrade the Kiel Canal) would be isolated from the rest of Prussian Germany.
  Accordingly, a plan was developed for Prussia to purchase all Austrian "rights" to the duchies before any transfer of those rights could be made to Duke Frederick.  The deal had a good chance of succeeding because the Austria Empire was in financial trouble at the time. Gerson Bleichröder opened secret negotiations with Moritz Ritter von Goldschmidt to pay a large sum of money to Austria for any and all rights to the two duchies of Holstein and Schleswig.  In the end, the administration of Holstein was not settled until 1866, after the Austro-Prussian War.
  Meanwhile, Bismarck still faced the problem of raising money to pay for the Schleswig-Holstein War.  To be sure, the victory in that war had brought glory to Bismarck and the Prussian nation.  However, the elected United Prussian Diet which had the authority to raise public funds to pay for the war was still dragging its feet about paying for the Schleswig War despite the glory to the Prussian nation. Furthermore, Bismarck as a monarchist had long detested elected parliaments of all kinds and he especially hated going "hat in hand" to the United Diet to beg for money.  Accordingly, Gerson Bleichröder developed several plans by which money could be raised without going to the United Diet.  For instance there was the Preussische Seenhandlung, a bank that had been founded by Frederick the Great in 1772, that still operated as an independent institute under the Prussian throne.  Money could be raised by the king independently of the Diet by either selling shares of the bank or by arranging a bond issue through the bank.  In the summer of 1865, the Rothschild Bank, working through Gerson Bleichröder, underwrote an entire public offering of bonds against the government shares of Seehandlung.
  Furthermore, much of the railroad-building in Germany had been done with public funds.  In exchange for the public funds the government had taken part ownership in the railways.  Consequently, by 1860, the government had a large investment in all the railroads in Germany.  One of these railroads was the Cologne-Minden Railroad.  Gerson Bleichröder just happened be the banker for the Cologne-Minden Railroad and sat on the Board of Directors of the railroad.  Once again the government could sell its shares in this railroad or establish a loan with the government shares as collateral.   In the end the government shares in the Cologne-Minden Railroad were sold to raise money independently of the United Diet.
  The spectacular victory of the Prussian Army at the battle of Sadowa (Könnigrätz), on July 3, 1866 during the Austro-Prussian War, changed the entire face of Europe.  Many of the small German states flocked to the banner of Prussia by joining the new Prussian-led North Ger
caption: Gerson von Bleichröder
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