Mayer lived near the waterfront and often walked down to the river’s edge to listen to the hustle and bustle of ships being loaded and unloaded. This was a good place to think. Mayer was very interested in trade generally, and he was mesmerized by all the exotic merchandise coming from unheard-of parts of the world, but he saw it with the eyes of a banker, not those of a merchant.
The only bank in existence was the Bank of England, and it was a bank model Mayer wanted to duplicate. It was made up of a group of private bankers who had the exclusive right to lend money to the English Government. If the people’s representatives wanted to launch a government project before taxes were collected, as was always the case, they went to the bankers for a loan. It was a bankers’ heaven, for not only were they sure of being repaid, but they could choose what loans were to be made. And by having the sole right to issue bank notes, they controlled the monetary system of England.
Mayer was already a banker of sorts for Prince William, and he took his commitment to the Principality of Hanau very seriously. However, it didn’t stop him from planning to bankroll his own operations. His plan had to do with the Hessian troops being recruited for England. William was spending much too much money outfitting and arming those troops. Military supplies came mainly from France and England and were shipped through Bremerhaven up north. Because William didn’t buy directly from the suppliers, and because the route was long and crossed many German states, everything cost much more than it should. If Mayer had someone in Rotterdam buy everything directly from the suppliers, and if he then transported everything in his own barges up the Rhine River, he would make a handsome profit while lowering his benefactor’s costs. Even though this meant doing business, the risk was almost nonexistent, and it was a way of seriously increasing his capital.
For a hundred years now, since the Treaty of Westphalia, the Rhine River had been open to free trade. It was forbidden for local lords to collect tolls, and most of the castles along the Rhine River had been put out of commission prior to the treaty. Nonetheless, renegade lords still collected tolls, and that hampered inland commerce. But Mayer knew that if his barges flew the Hesse-Kassel colors, no one would dare stop them and make them pay, for everybody knew that the State of Hesse had a lot of troops at the ready.
Frankfurt was a port on the Main River, a river that flowed into the great Rhine River a few kilometers to the west. Mayer had talked with the shipbuilders in Hanau about getting large barges built, proposing a model like that once used by the Romans to bring in wheat from Gaul. It was a large barge about thirty-five meters long, six meters wide, with a draught of one meter, which could carry around twenty tons. It had a cabin in the back for cooking and sleeping, a square sail in the middle, and it allowed for ten oarsmen. The local mariners all agreed such a barge was ideal for travelling upstream on the Rhine. Upon leaving Rotterdam, it could run with the tide, and then the sail could be used to run with the prevailing west wind while the rowers pulled and steered as needed. Of course, sailing downstream from Frankfurt would be a lot easier.
Such a barge was affordable to build and a cost-effective way to transport goods, even with a ten-man crew. Mayer would start with one barge and have more built as needed. He would establish a counting house in Rotterdam where his broker would fill orders and have the goods waiting for the next barge. When the barge arrived, the goods coming from Frankfurt would be unloaded and stored in a warehouse, and the military supplies waiting in another warehouse would be loaded unto the barge headed for Frankfurt. All special orders for exotic products purchased from the East India Company would be unloaded in Frankfurt, Hanau or some port on the Rhine, while the military supplies would go to Hanau.
The Huguenots who had settled in the Hesse region more than a hundred years before were great entrepreneurs, and among other things, they set up foundries that produced high quality iron. They also made stylish furniture, glassware, tin ware, leather products, fine silks, and clocks. They even manufactured artillery pieces, called serpentines, known for their precision and durability. In Hanau, the Goldsmiths’ House was actually an art center for the training of goldsmiths and silversmiths. Lithographers, engravers and artisans developed and used the latest techniques in the making of jewelry, in printing and in the minting of very attractive coins. Mayer knew that the manufactured products coming out of Hesse would be sure to sell easily in Rotterdam.
All goods at both ends would be bought at the lowest cost and sold at the highest price, making sure that the highest price was the price that everybody was willing and ready to pay. The considerable profits thus realized would remain in the counting houses at either end, and would be used to buy ever more merchandise going in both directions. There would be a considerable buildup of specie at both ends, and the counting houses could then start printing their own bills of exchange. Since both counting houses would always adhere to a strict code of ethics imposed by Mayer, where the bills would be redeemed on demand at all times, they would gain the confidence of the local business community and become widely accepted. The increased credit would allow more businessmen to do more business, and profits would increase. Bills of exchange had a multiplier effect, and that was what banking was all about.
All he needed was to find a man who would want to go and settle in Rotterdam. As for the amount of money needed to build the barges and fill the initial orders at both ends, it was insignificant, considering his already considerable wealth. The first name that crossed his mind for the job in Rotterdam was that of young David Schiff. Since David and his wife Hannah lived upstairs in the same house, Mayer knew them well, and he had taken the young man under his wing. David had proven to be brilliant in the bills of exchange business.
Of late, David had been showing signs of unrest. He didn’t like the idea of his family growing up in the Judengasse ghetto, and Mayer could understand why. David didn’t come right out and say it, but Mayer knew. David had spoken of Rotterdam as being an attractive place to live, but what he didn’t know was that it had many drawbacks for an Ashkenazi Jew. The Sephardi Jews, who ran the East India Company and ruled the oceans of the world, were wealthy Jews from the Iberian Peninsula. They were rich, proud and even arrogant. Those Jews didn’t think very highly of Ashkenazim coming from Eastern Europe. However, if David accepted, Mayer would give him enough money to settle in properly, for projecting an image was very important. But there was another problem in that the Sephardim didn’t worship the way Ashkenazim did, and David wouldn’t be welcome in their synagogue. No matter, he would make David an offer while making it very clear what problems his family was going to face.
The ghetto was flourishing. The people were vibrant and united, and their faith made them strong. Judengasse had a fine stone synagogue, plenty of good clean water, good sewers, a fine hospital, its own kosher slaughterhouse, a yeshiva and a rabbi who was a prince of knowledge. Though the inhabitants were often harassed and humiliated when they left the ghetto and were not free to move about at night and on Sundays, in many ways they were better off than the goys living outside the ghetto.
David agreed that the community was one big family, but he was overcome by feelings of hate and revenge when a goy treated his wife Hannah like a whore. One day he would retaliate, and his life and that of Hannah would be compromised. When Mayer offered to set him up in a fine counting house with all the money needed to hire a professional staff, purchase warehouse space, build a house for his family, and have all the necessary expense money to look like a successful businessman, he couldn’t believe his good fortune.
David readily accepted the generous offer but wondered how he could ever repay Mayer. Mayer told him that he would be making his weight in thalers many times over, and repayment didn’t enter the picture. He told David that though Ashkenazim in Rotterdam were poor and were assisted by the community, and that the Sephardim wouldn’t be happy welcoming another Jewish ‘rag dealer’, ‘another mouth to feed’, things would be different for David. Mayer would introduce him to an Italian Jew named Moses Montefiore, a well-connected Sephardi who would help him get established.