KNOW HOW WE GOT HERE, AND KNOW INNER PEACE
PART II – How one man devised and established international finance.
Mayer Amschel, the greatest man who ever lived, though almost completely unknown to most of us, was born in 1744 in the Frankfurt Jewish ghetto of Judengasse. In August, 1770, when he married Gretel, he was already important enough to have the open street sewer replaced by state of the art sewers running behind the rows of high narrow houses on either side of the street, making sure plenty of fresh water from the Main River flowed through them.
When he was eleven, his parents, who lived in Judengasse, had sent him off to a yeshiva near Nuremberg to study the Torah in the hope of his becoming a rabbi. Unfortunately, they died during a smallpox epidemic, and he was orphaned at twelve. That’s when his future father-in-law, Wolf Salomon Schnapper, contacted Wolf Jacob Oppenheimer in Hanover and asked him if he would take in the young man as an apprentice in his bank.
At the Oppenheimer Bank, everybody thought very highly of him because he had developed, thanks to his father, a very quick mind when it came to handling money and buying and selling rare coins. Then, he got his first big break. Frederic II, Landgrave of Hesse-Kassel, needed a favor. His court Jew was Jacob Oppenheimer, and he had sent for him because he was worried about his son William. Frederic had converted to Catholicism, and his Protestant wife had divorced him. When his father, the previous landgrave, died in 1760, he had sent Frederic to Kassel and given the principality of Hanau to his grandson William. William had been raised a Calvinist, and the thriving Calvinist community in Hanau wanted nothing to do with Catholics.
The Calvinists, also called Huguenots, came from France. They were the great businessmen of the day. The French kings, had always enforced the ‘one God, one king, one nation’ concept, and for centuries the Catholic Church had persecuted and massacred those who didn’t agree. After repeated atrocities committed against them, hundreds of thousands of Huguenots immigrated to more clement lands, places like the Netherlands, Hesse-Hanau, England, America and South Africa. Having endured unspeakable ills at the hands of the papist kings, Huguenots developed a deep hatred for Catholics, and by the same token, became more tolerant towards Jews.
Because of William’s young age, Frederic’s English ex-wife, Mary, was made regent. In wanting to protect William, in spite of his feelings for his ex-wife, Frederic decided to provide him with a financial advisor. He had hoped that Jacob Oppenheimer would personally take on the job. But because Hanau was five days by stagecoach from Hanover, Jacob told him it wasn’t practical for him to do so and recommended Mayer instead.
Frederic knew that Mayer lived in Frankfurt which was near Hanau. He also knew that Mayer had met his son William when they were boys. When Frederic had been Prince of Hanau, Mayer had accompanied his father Moses on one of his trips to the principality. His father had rare coins to offer Frederic who happened to be an avid coin collector. Young William had been curious about Mayer’s clothes and had wanted to have a yellow star like the one stitched to his coat. William never forgot the boy with the funny clothes.
Frederic remembered him as well, but because he was still only nineteen, he wondered how much wisdom and experience that young man could have. After being assured by Jacob that the Oppenheimer Bank would stand behind him and advise him, Frederic agreed to meet with him, and was satisfied with what he saw. Mayer then went to Hanau to meet with William and his mother who were quite pleased with him as well. So Mayer started putting the principality’s finances in order, and unavoidably, he met a General von Estorff who had been sent by Frederic to take charge of the principality’s troops. Hanau was a garrison city, but Mayer didn’t yet know what that implied.
He was becoming a sort of a one-man branch of the Oppenheimer Bank, and things were going smoothly when he found out why Frederic had sent the general to Hanau. For years, Hesse-Kassel had been receiving huge annual retainer fees from England in order to keep an army of Hessian soldiers at the ready. Up until then, the soldiers had been mainly recruited in Kassel. However, in wanting to improve Prince William’s finances, Frederic, who was now Landgrave of Hesse-Kassel, figured that more soldiers could be recruited in Hanau. Huge sums of money representing that portion of retainer fees due Hanau were sent to William, and Mayer suddenly had the responsibility of managing millions of thalers. He had taken it in stride and had made sound investments. With the help of the court Jews in the ghetto, he got the highest return on the investments, and he gave Prince William useful advice regarding expenditures. He was much appreciated, and was given the official title of court Jew which allowed him to get married.
Frederic was related to the English King who was thinking of using Hessian soldiers in America. In an armed conflict, the English Parliament could intervene more quickly without having to explain everything to taxpayers, thereby avoiding arousing passions. The English parliamentarians preferred having German troops fighting English settlers, and by paying a retainer fee to Hesse-Kassel, they could have troops on the ground at a very short notice and at a much lesser cost.
Prince William used the huge retainer fees to improve the infrastructure of the Principality of Hanau. He always paid Mayer well, and the recruits received their pay whether in training or on active duty. When they were required to go and fight, they did so for a specified amount of time, and Mayer made sure their families were properly compensated.
William’s father, Frederic, maintained around ten thousand troops in Kassel, and William, with the help of General von Estorff, maintained around two thousand in Hanau. The Oppenheimer Bank had always invested the retainer fees for Frederic, but in wanting to help his son, it was now Mayer who was investing the huge sums handed over to William in Hanau. Mayer made huge commissions, and after convincing the Prince that Hanau should have its own mint, it was set up in the Walloon House, also called the Goldsmiths’ House, a building adjacent to the castle.
The silver bullion coming in from Kassel represented millions of thalers, and most of it had to be minted and invested by Mayer, and his personal fortune increased dramatically. Court Jews invested money for the princes, but also lent them money, and very often commissions weren’t paid and loans not repaid. On a whim, the princes would even do away with the court agent altogether. The horrible execution of Joseph Suss Oppenheimer just a few years back in Stuttgart was still fresh in everybody’s mind. But although Prince William was an honorable man, Mayer decided to be secretive and keep his personal business to himself just in case. He was not at all interested in flaunting his talents or his wares, he just wanted to be the best he could be at what he was doing. Nobody knew how much money he had, they just knew he wasn’t poor. Humility was a better route in reaching ones goals anyway. As far as Mayer was concerned, the most important thing in the world was to have a family, and to live among a trusting caring people, for if one didn’t have that, he had nothing.
But he was ambitious, and since Frederic, William and Jacob had full confidence in him, he decided to make them a proposition. The German people weren’t united, and there were hundreds of principalities who did as they pleased with currency, so Mayer decided to standardize the thaler in the State of Hesse. In other words, he wanted to mint a thaler that would be accepted throughout the state and beyond. Because Frederic and William, thanks to the English, had more silver bullion than any other German prince, and because Frankfurt, one of the most important German trading center, was in Hesse, his initiative was bound to succeed.