0:02 Across centuries, the House of Rothschild has wielded unprecedented dominance, blending familial solidarity and relentless profit-seeking. From modest roots, they rose to influence international finance, wars, and politics, becoming the most formidable banking dynasty of their age.

The Rothschild Banking Dynasty has an unlikely origin, an 18th-century ghetto in Frankfurt, Germany.

0:56 Like many of his time, Mayer Amschel Rothschild couldn't own land or farms due to his race. So, he followed his family's path and became a textile trader.

The ghetto was not very encouraging. Shops spilled heaps of secondhand clothes and soiled household goods into the alley. Frankfurt Jews were barred from farming, handicrafts, and even dealing in nobler goods such as weapons, silk, or fresh fruit.

Mayer Rothschild quickly grew discontented with trading textiles and became eager to explore other ventures, ones that offered higher profit margins. He soon discovered that trading gold coins and antiques could be much more lucrative. Mayer Rothschild quickly established himself as a shrewd trader and uncovered a brilliant strategy known today as front running.

1:48 He worked as a court agent, much like today's stockbrokers. His main client was Prince William of Hesse-Kassel. Whenever William wanted to purchase gold coins, he would ask Mayer Rothschild to obtain them from the market. What Rothschild did was this: he would first buy the coins using borrowed money, then sell them to Prince William, effectively acting as both the buyer and the seller. This practice is known as front running in modern terms. In doing so, he profited twice, once from the 8% commission fee and also from front running Prince William.

2:33 By 1782, Mayer Rothschild had amassed a colossal fortune and earned the position as the investment manager for Prince William's vast wealth. But for Mayer Rothschild, it was just the beginning. To truly create a strong footing in the world of finance, he had to evolve into a bank.

2:52 Often, when traders and court agents accumulated significant wealth through their financial dealings, they sought greater recognition and respectability. 3:05 Transitioning into banking was a way to gain legitimacy and credibility. Getting into banking proved genius for Mayer. By the close of the 1700s, he was the richest man in Frankfurt. But still, for Mayer Rothschild, it wasn't enough. He envisioned a legacy beyond wealth: a family dynasty that would stand the test of time, outlasting nations and empires.

To achieve this, he knew he needed to think bigger than just Frankfurt or even Prussia.

3:49 To expand, he dispatched four of his five sons to the great capitals of Europe: Vienna, Naples, Paris, and the Jewel of the Empire, London.

In the early 1800s, Great Britain stood as a global superpower with a vast empire across continents. With the British Royal Navy unmatched, the seas were theirs. The Industrial Revolution was transforming the economy, making Britain an industrial and manufacturing powerhouse. The financial sector centered in London was robust, with the establishment of the Bank of England in 1694. London became a global financial center.

Mayer Rothschild had built a thriving banking business in Frankfurt, but he realized that to sustain the long-term prosperity of the family, he needed to expand to different major cities in Europe, including sending his third son to London, England. His name was Nathan Rothschild.

5:02 For Nathan Rothschild, the pressure was immense. He felt compelled to demonstrate to his father that he was equally capable of upholding the family legacy. Nathan was a fiercely ambitious and competitive man, as quick to take offense as to give it in his business dealings.

With £20,000 his father gave him as an investment, Nathan planned to maximize it as quickly as possible by any means necessary. In the early 1800s, the London textile industry saw significant growth. This industry was marked by many small-scale workshops and factories that produced many different types of textiles from cotton to silk. Nathan saw an opportunity to capitalize on this growth while maximizing profits.

5:44 He managed to create three sources of profits from the textile industry. According to his own account, Nathan was successful in his early years: "I soon found that there were three profits, the raw material, the dyeing, and the manufacturing. I said to the manufacturer, 'I will supply you with material and dye, and you will supply me with manufactured goods.' So I got three profits instead of one, and I could sell goods cheaper than anybody. In a short time, I made my £20,000 into £60,000."

6:19 To ensure consistent revenue, Nathan also ventured into the lucrative realm of smuggling textiles and precious metals.

He became, in a word, a smuggler. By 1808, Nathan had earned a reputation as a man who, thanks to his superior management, judgment, foresight, and connections, regularly succeeded in getting goods to the continent. Within just a few years of initiating his business in London, Nathan reports impressive sales growth of £800,000. Now, with substantial capital at hand, Nathan sets his sights on transforming his enterprise into a bank. He plans to build it to be bigger than his father's bank in Frankfurt.

7:02 By 1812, Mayer Amschel Rothschild's health deteriorates rapidly. He soon realizes that death is inevitable. And to ensure the House of Rothschild remains prosperous, he urges his sons to put their family unity first and above all. This is one of the foundations for the long-standing success of the Rothschild dynasty. Their strong bond as a family and their unique way of doing business are reasons they're still successful today.

7:59 As the Rothschild sons establish their banking houses in different cities, Europe enters an age of wars set to span over a century. Whereas the 18th-century wars had tended to be limited and had tended to end in a truce where people sat down and negotiated, the wars of the 19th century, at least some of them, became increasingly ideological and difficult to stop. Thanks to its sophisticated finance system, the United Kingdom wages six wars in the century without facing an economic collapse.

Today, we live in a world dominated by a single superpower, the United States. Indeed, it sometimes seems a little bit as if we've become part of the American empire. Yet Britain was the world's superpower for more than two centuries, exerting even more power beyond her borders than the US does today.

8:50 By 1814, the Duke of Wellington wins battle after battle against Napoleon and plans to bring the fight to France. But while in France, Wellington realizes the need for a significant amount of French coins for expenses. "Wellington's campaign was being fought at a time of unparalleled fiscal overstretch. In protracted campaigns like Wellington's in the Iberian Peninsula, more sophisticated methods of procurement were necessary. Above all, it was essential to be able to purchase supplies and to pay troops."

Nathan sees this as a once-in-a-lifetime opportunity. If he can meet this challenging demand, it can elevate his bank to unprecedented heights. Nathan subsequently made what he had done sound easy. "When I was settled in London, the East India Company had £800,000 worth of gold to sell. I went to the sale and bought it all. I knew the Duke of Wellington must have it. I had bought a great many of his bills at a discount. The government sent for me and said they must have it. When they got it, they did not know how to get it to Portugal. I undertook all that and I sent it to France. And that was the best business I ever did."

10:12 By the mid-1800s, as Europe turns into a hotbed of war, its countries increasingly need the foreign exchange market. To start a war, you will need money. If you lose a war, you often have to pay the other side. For the House of Rothschild, wars become a profitable business. Their network of banking houses provides a unique competitive advantage. Back then, the modern banking system was just starting. So they could charge high fees, sometimes as much as 8%, for providing currency exchange services.

10:54 But revenues from commissions are just a small part of their income source. The Rothschilds understand that in the world of finance, information is everything and speed is king. They were one of the earliest successful forex traders. Using private carriers and even leveraging well-trained horses and pigeons, the Rothschilds stay steps ahead of the competitors. As a result, currency speculation becomes their most profitable business. The profit for the London House keeps rolling in, and Nathan Rothschild becomes the richest man in the world.

But even the most powerful man in finance can't defeat the ultimate enemy. On July 28th, 1836, the unexpected happens. Nathan Rothschild, the wealthiest man in the world, dies at the age of 58. This was surprising because the Rothschild family was known for living long lives. In fact, when Nathan died, his mother was still alive, and she lived to be over 90 years old. The London Times gathered itself up for one of its rare superlatives.

12:14 "The death of Nathan Mayer Rothschild," an editorial said, "is one of the most important events for the city and perhaps for Europe in a long time. No operations comparable to his have existed in Europe to this time." Nathan Rothschild's death has a huge impact on the market, but the House of Rothschild lives on without him.

Thanks to a decentralized banking system they have created, the Rothschild family's banks continue to thrive. But now, they need a new leader. Nathan Rothschild's youngest brother, James Rothschild in Paris, becomes the commander-in-chief of the family dynasty.

For James, the pressure of being a Rothschild is immense. While government bonds and war financing remain profitable businesses for the family, competition saturates the playing field, eroding their profit margin. Seeking to bring new glory to his family, he looks for a new edge.

13:15 "Nathan's youngest brother, James, was markedly less submissive to his will than the other three. The youngest brother was intellectually and temperamentally Nathan's equal. He also had the advantage of better schooling. Even in acknowledging Nathan's leadership, James was less than deferential."

James Rothschild soon sets his sights on a burgeoning industry: the railroads. In the early 1800s, Europe witnesses rapid railroad expansion, beginning with England's Stockton-Darlington line in 1825. Railroads revolutionize transportation, foster industrial growth, enhance trade, and reshape landscapes, ultimately connecting major European cities and regions.

14:02 Throughout the 1840s, the Rothschilds provide financing for many railway ventures, reaping substantial profits from commissions and trading railroad bonds and stocks. The Rothschilds were savvy with their money, often using other people's money to reduce their risks. James Rothschild plays a significant part in what was known as the "syndicate" in France during this time.

By now, the Rothschilds are more than bankers, but the bank remains at the heart of the family business, generating funds invested in assets with increasing demand: metallurgy, mining, and, above all, railways.

14:56 While profits for the House of Rothschild soar, average people struggle to make ends meet. The income disparity between the rich and the poor remains pronounced. The Industrialists of that period pursue large fortunes, often pushing the boundaries of ethical practices.

After consecutive wartime defeats, by the 1840s, the French government faces deep debt, and the nation's economy teeters on the brink, leading the populace to grow increasingly resentful of both the government and the financiers backing them.

Within days, the Rothschild bank in France nears its breaking point. James, as the head of the French bank, is desperate to save his institution. He turns to his nephew in London, Lionel, Nathan Rothschild's son, for assistance. The French Revolution puts their branches in Vienna and Paris at risk of insolvency, compelling the London branch to bail them out. By then, the Rothschild family's banking business had spanned almost two generations.

16:20 For Lionel, rescuing his uncle's branch poses significant risk and potential loss. However, family unity takes precedence. His London bank arranges a loan, saving his uncle's bank from collapse.

But Lionel's commitment goes further. While prioritizing his family, he also feels compelled to uplift his people. Believing in combating prejudice against his ethnicity, he sees entering government as beneficial. "Lionel had considerable wealth, using it to secure press support for his election."

17:03 By the mid-19th century, most restrictions on British Jews had been lifted. The Commons passed a bill allowing a Jew to be seated. In August 1847, Lionel de Rothschild ran as a Liberal candidate for the City of London and was elected. However, a problem arises. To be sworn in fully as a member of the Commons, he must recite an oath to the Holy Scriptures. Lionel refuses, insisting on swearing only on the Old Testament.

Becoming part of the government is monumental for the House of Rothschild. As James Rothschild ages, Lionel gradually assumes the role of the family's patriarch. But what Lionel doesn't realize is that, though the House of Rothschild reigns supreme in Europe, a new banking empire emerges, poised to challenge their dominance.

18:06 The early success of Rothschild is largely attributed to information, intelligence, and knowledge. Nowadays, learning anything is much easier as we have access to vast resources online. One of the best ways to learn math, data science, and computer science interactively is with Brilliant.org. Brilliant is fantastic because it offers more than online learning. It's interactive, visually engaging, and perfect for busy individuals. Complex topics are broken down into bite-sized lessons, making it easy to master concepts with just 15 minutes of practice a day. Recently, I've been diving into their cryptocurrency course, learning about blockchain. And it helps me get a better understanding of crypto projects and whether they're worth investing in.

Brilliant offers interactive puzzles, riddles, and games, allowing you to enjoy the learning process without having to simply memorize facts. They expand their courses with new content monthly, including "How Large Language Models Work," a course designed to help people stay ahead of the AI wave. Additionally, you get to learn practical skills that can potentially enhance your professional career for a lifetime. Visit Brilliant.org/finaius or click the link in the description for a 30-day free trial. The first 200 customers will receive a 20% discount on their annual premium subscription. Thank you, Brilliant, for sponsoring this video.

19:41 Junius Morgan is a British banker of the merchant banking firm, George Peabody & Company. By 1864, upon Peabody's retirement, Junius takes control of the firm.

"Junius Morgan always had a gravely mature air. He was the sort of prematurely middle-aged young man old financiers found consoling. He was solemn and business-like and always master of his emotions."

20:07 Junius Morgan understands that to play in the big league, he needs to venture into government financing. And for a banker in the 1800s, nothing presents more opportunities than wars. In 1867, France tries to purchase Luxembourg from the Netherlands. However, Prussia opposes the move, leading to rising tensions. The Chancellor of Prussia, the notoriously ruthless military man, Otto von Bismarck, waits for an opportunity to strike. On July 19, 1870, Napoleon III declares war on Prussia. This declaration aligns perfectly with Bismarck's aspirations for a war that would further German unification under Prussian leadership. "From the very beginning, Bismarck had a wild temperament, and it was very difficult for him to rein it in. He had these two sides, a clear intellect and tremendous precision. It was the combination of his wildness and his intelligence that drove him to escapades, drunken excess or duels or fencing. Bismarck always wanted to fence to prove his manliness. I see him as a raging bull."

21:27 Having financed wars for a century, the House of Rothschild possesses an uncanny ability to predict if a country will win or lose. They have no faith in France to defeat the formidable Otto von Bismarck, and it will not make sense to lend money to France. While major banking houses like Rothschild and Bering avoid lending money to the French government, Junius Morgan sees this as the opportunity of a lifetime. It doesn't matter to him if France can win the war. What's crucial is if France can repay the loans. He quickly understands that even if France loses, the nation's economic resilience ensures their capability to pay back the loans. "Although French politics was very shaky at the time, the French economy was very diversified, and more importantly, it had a very efficient tax collection system."

22:23 Through his syndicate, Junius Morgan raises over 10 million pounds for the French army. As an American banker, he also grants the French government access to purchase American arms. The war resulted in a decisive German victory. The conflict ended with the Treaty of Frankfurt in 1871, leading to significant territorial losses for France and the proclamation of the German Empire in the Hall of Mirrors at the Palace of Versailles. When the war ended, the defeated French didn't renege on the loan, as Bismarck predicted. Instead, they prepaid the bonds in 1873. As a result, Junius Morgan walks away with a fortune from this windfall. "The loan netted him a whopping 1.5 million pounds. This vastly augmented his firm's capital and propelled him into the upper ranks of government financing." And now, the House of Morgan has become a formidable force in finance.

23:36 While Junius Morgan strives to establish his banking dynasty, the House of Rothschild faces mounting challenges. Following the death of James Rothschild in 1868, the younger generations of Rothschilds become increasingly fragmented. To rebuild their prestige, they look beyond Europe, investing heavily overseas, allocating 37% of their portfolio to Egypt and financing Indian railroads. But to truly recapture their past success, they need a more expansive marketplace. As old empires fade, a new empire emerges, bigger and more powerful than any the world has ever seen.

From the 1850s to the 1870s, America experiences significant growth, propelled by the Industrial Revolution, westward expansion, and the completion of the Transcontinental Railroad in 1869. This era witnesses the ascent of industrial magnates. Cornelius Vanderbilt reigns in railroads, Andrew Carnegie in steel, and John D. Rockefeller in oil, culminating in the formation of Standard Oil. These tycoons transform American business, introducing innovations and fresh organizational structures. "The story of America isn't just the story of the patriots that helped build the democracy. The reason the United States is the leading economy in the world is because of the work of entrepreneurs who created entire industries that propelled the United States to be the leader of the free world." For years, the Rothschilds underestimated America, deeming it a land of madmen.

25:17 But seeing the rise of the House of Morgan and Wall Street's emergence as the new global financial hub, the House of Rothschild starts to pursue more business opportunities. And nothing presents better opportunities than when there is blood on the street. For America, that day arrives on May 9, 1893. Following decades of a booming railroad market, the industry, plagued by overexpansion and overbuilding, suddenly collapses. The result is one of the worst depressions in history, the Panic of 1893.

President Grover Cleveland is determined to maintain the gold standard and refuses to engage in expansionary fiscal policies such as tax cuts and increased government spending. Back then, the US dollar was not the main global currency. The British pound was. President Cleveland felt that to maintain the credibility of the US government, he must maintain the convertibility of dollars to gold. The Cleveland government is running dangerously low on gold reserves. So he calls on J. Pierpont Morgan for assistance. Around this time in the late 1800s, Julius Morgan had passed away in a traffic accident, making J. Pierpont Morgan the head of the House of Morgan.

26:47 The federal government is days away from depleting its gold reserves. Morgan understands the outcome will be disastrous for the young country and for his own banking empire. And he knows there is one family with access to a vast amount of gold that can help the federal government, the House of Rothschild. For the last three decades, the Rothschilds have been strategically investing in mining operations for gold and silver. Their interests in gold mining grew rapidly. Moreover, many of the bond issues handled by the Rothschilds in this period were linked to the recipient's adoption of the gold standard. J.P. Morgan raises $65 million by issuing government bonds and uses the money to negotiate with the Rothschilds, purchasing 3.5 million ounces of gold for the Fed.

27:41 Back then, banks really liked doing business with the government. Why? Because governments usually pay back their debts and they can always collect more taxes if needed. The collaboration of Morgan and Rothschild makes their bond offering one of the most sought-after investments. The gold bonds sell out in 30 minutes when offered to the public. America enters the world scene as a new empire, one that rivals any in the history of the world, a superpower.

28:24 While the Rothschilds successfully expand their business reach in America and throughout the world by the late 1800s and early 1900s, the old empires in Europe head for another major showdown. By the early 1900s, tensions among European powers reach a boiling point, fueled by imperial rivalries, military buildups, and complex alliances. While the path to war threatens businesses with potential catastrophe, the House of Rothschild sees an opportunity to capitalize on the growing tensions.

29:00 The head of the London Rothschild Bank is Natty Rothschild. He advocates for the British government to expand its naval capabilities. So many European countries started to spend more on their militaries. For that, they needed money. What the Rothschilds don't realize is that the war that is about to unfold will be more brutal and deadly than any they have ever encountered before. Following the assassination of Archduke Franz Ferdinand of Austria-Hungary, Europe plunges once again into full-blown war.

29:48 Look at Serbia. Serbians are saying we don't want to be ruled by the Austrian, the Hungarian Empire. That's an old, tired, imperialistic structure. We are our own country. It's the Serbians who assassinate Archduke Ferdinand and his wife, Sophie, and of course, that's the trigger that begins the whole conflict. This war features trench warfare, new weaponry, and results in massive casualties, with an estimated 10 million soldiers and 7 million civilians dead.

30:19 For the first time, members of the Rothschild family align with opposing sides. Though the Rothschilds survive World War I and even profit from war financing, their scale of operation is overshadowed by the rising banking dynasty in America, the House of Morgan, now led by J. Pierpont Morgan's son, Jack Morgan. The Morgan Bank serves as the key financier for the U.S. government during World War I, raising funds through war bonds and extending crucial loans to European allies.

30:52 In 1935, the Jewish Chronicle ventured to suggest, with perhaps a hint of relief, that the Rothschilds' heyday was waning. The most intellectually gifted of the next generation of Rothschild men turned his back on the family business. After World War I, the House of Rothschild finds itself in disarray. Different banking divisions pursue various objectives and become more integrated into the countries where they operate.

30:28 At the same time, Europe sees a surge in anti-Semitic sentiment, driven by economic hardships and political unrest. The Rothschild family, as prominent Jewish bankers, faces heightened scrutiny and hostility. In Germany, following its defeat, the nation endures one of its most severe economic downturns. A new kind of leader harnesses the anger of the German public and swiftly rises to the position of chancellor. His rise to power spells trouble for the House of Rothschild, especially the German banking branches.

32:10 In 1939, just 21 years after the end of World War I, the biggest war in human history erupts. In the spring of 1940, Hitler secures victory after victory. Denmark and Norway quickly fall under occupation. Next, the German army sweeps across the Netherlands and Belgium. Europe makes a desperate stand in France, but it's no match for German armor and air power. And by June, Hitler's in Paris. Britain is the Germans' next target. If Hitler conquers Europe, the House of Rothschild will face its certain demise.

32:50 While some Rothschild members engage in resistance movements against the Nazi occupation, many flee Europe to escape persecution, seeking exile in safer countries. When German tanks rolled into Paris in 1940, the French Rothschilds were in grave peril. The older ones, Edouard, Robert, and Morris, managed to escape. They ended up by sundry paths and stops in the United States or England. As a result, the family endures significant financial and personal losses as their assets are seized and properties confiscated. General Eisenhower informs me that the forces of Germany have surrendered to the United Nations. The flags of freedom fly all over Europe.

33:49 As the Rothschild dynasty becomes increasingly fragmented, N.M. Rothschild of London takes on the challenge of rebuilding and carving out its own direction. For N.M. Rothschild and Sons, their core competitive advantage remains government financing. This has also been a core strategy of the Rothschilds. They worked closely with the government to finance big projects. The Rothschilds believed that as long as they had good relationships with the governments of strong countries, their business would always do well.

Rather than aiming for expansion, Rothschild preserves its business model as a private club, financing elites while evading public scrutiny. By the 1970s, a future media mogul seeks N.M. Rothschild's assistance. His name is Robert Maxwell.

Maxwell served in the British Army during World War II. After the war, he worked for British intelligence and later entered the publishing industry. In the 1950s and 1960s, Maxwell acquired several British publishing companies, including Pergamon Press and Miragroup newspapers. He had a traumatic beginning to his life as a child. Most of his family were wiped out in the Holocaust. I think the experience of extreme poverty and great hardship scarred him for life. Not being POOR became an absolute imperative. But to expand his business empire, he will need money. Lots of money. The type only powerhouses like the Rothschilds can provide.

35:43 In the 1980s, Maxwell's investments look like they're doing well, but trouble is brewing inside N.M. Rothschild. Lord Victor Rothschild and his son Jacob are on one side, fighting with their cousin, Sir Evelyn de Rothschild. Around this time, the banking world was changing a lot. Bigger banks were acquiring smaller ones, making them megabanks. And new ways of making money, like derivatives and options, came up in the 1980s. These new tools help banks make more money and also help them manage risk better. Jacob Rothschild believes the bank must adapt to modern corporate strategies and pursue aggressive expansion. Sir Evelyn, who leads N.M. Rothschild and Sons, asserts that modernizing the ownership structure risks the family's absolute control. He insists the Rothschilds' bank must always be wholly owned by the Rothschilds, even if it demands short-term sacrifices.

36:55 But family drama soon becomes their least concern. A massive scandal erupts, threatening the Rothschilds' reputation.

37:06 The millionaire newspaper publisher Robert Maxwell is dead. He disappeared overboard from his private yacht early this morning while cruising off the Canary Islands. In the early 1990s, revelations surfaced that Maxwell misappropriated hundreds of millions from his employees' pension funds to sustain his enterprises and luxurious life. I feel that, and I've grappled with this a lot, I feel that possibly the line between suicide and an accident is less clear-cut than we tend to assume. Maxwell's mysterious death in 1991, after vanishing from his yacht near the Canary Islands, spurs investigations into his financial misdeeds.

37:53 While the Rothschilds' involvement in Maxwell's demise remains unclear, the event blemishes their reputation. But for Sir Evelyn de Rothschild, the scandal reaffirms his beliefs about the bank's need for discretion and privacy. But N.M. Rothschild is still just the tip of the extensive Rothschild legacy. By 2023, the Rothschild family diversifies its interests across multiple sectors, extending beyond traditional banking. Their enterprises encompass investment banking, wealth and asset management, private equity, and philanthropy. The original banking establishments in Paris, Frankfurt, Vienna, London, and Naples, once the bedrock of the Rothschild Banking Dynasty, have adapted to the evolving financial landscape.

38:48 While banking is still central, the family's influence now permeates a wider range of financial services. Throughout history, the Rothschild family was often not hesitant about making more money. But when it comes to maintaining family legacy, they were able to let go of those opportunities. This kind of long-term view is both respected and scary.