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The House of Medici: Its Rise and Fall
By Christopher Hibbert
Harper Perennial, 1999, 364 pages
$11.52 paperback
Founded in 1397 by Giovanni di Bicci de’ Medici in Florence, the Medici Bank became the largest and most respected bank in Europe, and flourished for 100 years. The Medici family was of course phenomenally wealthy and powerful, but more than that: they were influentially involved in science, art, architecture, religion, and affairs of the heart, for two more centuries after the bank’s demise. The House of Medici patronized Michelangelo, Galileo, and Botticelli (and, indirectly, Da Vinci), who made Florence the heart of the Renaissance.
Cosimo’s grandson Lorenzo the Magnificent (1449-1492) is perhaps the most famous Medici. He ruled the Florentine Republic and brokered peace between the various Italian states. He excelled in the classics, sports, poetry, and music (though not in finance). Two of his sons became powerful popes: Leo X and Clement XII. (See Magnifico: The Brilliant Life and Violent Times of Lorenzo de’ Medici, by Miles J. Unger, Simon & Schuster, 2009.)
Not all the Medicis were so respectable. In the 17th century, Ferdinando II de’ Medici, Grand Duke of Tuscany, abandoned the family’s patronage of Galileo when the Inquisition accused him of heresy (for contending the the earth revolved around the sun, not vice-versa). In the 18th century, Cosimo III de’ Medici, another Grand Duke of Tuscany, persecuted Jews and sparked Tuscany’s bankruptcy by imposing punitive taxes on the populace.
The author Hibbert has written more than 50 books of history and biography, including Disraeli (2004) and Queen Victoria (2000).
The House of Rothschild: Volume 1: Money’s Prophets: 1798-1848
By Niall Ferguson
Penguin, 1999, 672 pages
$16.50 paperback, $14.85 KindleThe House of Rothschild: Volume 2: The World’s Banker: 1849-1999
By Niall Ferguson
Penguin, 2000, 544 pages
$16.50 paperback
The House of Rothschild, founded in the late 18th century by expatriate German Jews, was at one time the largest banking enterprise in the world. Its principals controlled a vast portion of the industrial world’s wealth and dominated the international bond market. Consequently the family enjoyed significant political influence in the major capitals of Europe, up to the early 20th century.
Ferguson’s two-volume history of the Rothschild banking dynasty is both “exhaustive [and] spellbinding,” said Publishers Weekly. It also presents a vivid picture of the “financial, political, and military aspects of early 19th-century European life.”
Volume 1 begins with merchant Mayer Amschel Rothschild and his wife, who raised five boys in the Frankfurt Judengasse (Jewish ghetto). The sons spread out to different European cities around 200 years ago. The most capable of them, Nathan Mayer, located in London; and the others in Paris, Vienna, Naples, and Frankfurt. Each founded a branch of the Rothschild bank, with headquarters in London. The brothers’ remarkable unity, combined with geographical dispersion, gave their bank an overwhelming competitive advantage.
Volume 2 begins at the peak of the Rothschilds’ wealth and power, which enabled them to act as power brokers throughout the world. Through shrewd, complex negotiations they helped promote the beginnings of economic union throughout Europe. They financed Spain’s railroad and Rhodes’s diamond and gold mines in South Africa.
The rise of national socialism and changes in international banking, coupled with a new generation of Rothschilds who cared less about maintaining their holdings than enjoying themselves, led to a substantial decline in the family’s authority and wealth.
Ferguson, a Harvard history professor and author of The Ascent of Money (Penguin, 2008), focuses primarily on the Rothschilds’ public life, warts and all. If you want to read more about the character and relationships of the family members, see The Rothschilds, by Frederic Morton (Kodansha Globe, 1998, 360 pages).
The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance
By Ron Chernow
Grove Press, 2001, 832 pages
$14.96 paperback
The glory years of the Morgan banking dynasty focused on the founder’s grandson, John Pierpont (J.P.) Morgan, who inherited the bank from his father, Junius P. Morgan, in 1890. With J.P. at the helm (until he died in 1913), the House of Morgan “behaved like a sovereign state, commanding more wealth than most countries…engaging in shadowy diplomatic missions, writing the script for war or peace, propping up governments or toppling them” (Entertainment Weekly).
The aristocratic J.P. commanded his empire from Morgan headquarters at 23 Wall Street, New York. The bank, known for integrity and secrecy, accepted only rock-solid corporations and old-moneyed families as clients. J.P. himself dominated American corporate finance—in 1892 he engineered the merger that resulted in General Electric, and in 1901 he merged several steel and iron companies to form U.S. Steel. He collected “Old Masters and young mistresses.” (EW) Thanks to J.P.’s legendary wealth and power (and big stogies), he became the populist symbol of predatory, monopolist bankers.
J.P. died in 1913, leaving his fortune and bank to his son, John Pierpont (Jack) Morgan, Jr. Jack was a more-than-competent banker, but the Glass-Steagall Act of 1933 forced him to split the House of Morgan into a commercial bank (J. P. Morgan & Co., later renamed Morgan Guaranty Trust), an investment bank (Morgan Stanley), and an overseas securities house (Morgan Grenfell in London). Thus ended the years of imperial glory.
The second half of the book presents an institutional history of the three divergent branches up through the “morass of takeovers and junk bonds” of the 1980s. EW said, “Chernow is properly scathing about this descent into tawdry greed.” Unfortunately, the second half is nowhere near as fascinating as the first half (I quit reading it partway into the second half).
Chernow also wrote Titan: The Life of John D. Rockefeller, Sr., and The Warburgs. His biography of Alexander Hamilton is one my all-time favorite works of non-fiction.