16-WINE AND DENIM

By the end of June, 1773, David in Rotterdam had received and sold several shipments of tobacco and realized a bigger return than anticipated, Jean-Baptiste Willermoz and François Johannot and their wives had come back from the south of France with interesting information along with several bottles of Burgundy wine and several meters of ‘de Nîmes’ cloth.

After debriefing Jean and François in his Farhgasse office, Mayer decided to give Gretel, his one and only confident, a full account of their trip. They sat down at the kitchen table, and Mayer started relating the great news Jean-Baptiste Willermoz and François Johannot were bringing back from France.

He first showed her a sample of the cloth. It had one weave of blue thread crossed with a weave of white thread, and the double-weave not only made for an interesting design, but gave it extra durability. Gretel thought the indigo colored cloth was beyond belief and wondered if poor people could afford it.

Mayer answered that it would sell for the same price as Indian or English cotton and last many times longer, so people would flock to buy it. And before Gretel had a chance to make a comment, Mayer reached for a bottle of burgundy wine, one of the many samples brought back by François. He picked up a funny curly piece of metal, drove it into the cork with a screwing motion and pulled the cork out of the bottle neck. He took two glasses, half-filled them, and they drank to their growing family.

Gretel thought the wine was too good to be true, but her mouth dropped upon learning how much money the wine and cloth was going to bring in. Mayer started by explaining that Bouchard in Beaune was to receive a letter of exchange in the amount of £2500, or 1 shilling per bottle of wine once delivered in Rotterdam where David would presell it for 1/6 per bottle. David would give the new willing owners a letter of exchange guaranteeing them 3 shillings per bottle if delivered in New York where Haym would presell it for 4 shillings per bottle. 250000 bottles, or half a shipload, would thus generate a profit of £6000 in Rotterdam and another £12500 in New York City.

With regards to cloth, Dollfus was to receive a letter of exchange in the amount of £12000, or £10 per bolt of denim once delivered in Rotterdam where David would presell it for £12 per bolt. David would then give the new willing owners a letter of exchange guaranteeing them £15 per bolt if delivered in America where Haym would presell it for £17 per bolt. 6000 bolts of cotton, or half a shipload, would generate a profit of £12000 in Rotterdam and another £12000 in New York.

He concludes by repeating that since a work outfit made with denim cloth in America will cost less than one made with English or Indian cotton but last ten times longer, everybody will be fighting to buy it. Likewise, since the best wine in the world will only keep getting better in a bottle, all the bourgeois in America and England will want to fill their cellars with it. He then adds that though the profits appear to be huge, the price for these superb new products is well below what people will be willing to pay.

To help Gretel get over her choc, he starts relating the adventures of François’ party to France. They had started off by taking a river coach to Mainz. After spending a delightful night in a well-appointed inn, they set off the next day for Basel. River coaches were much more comfortable and a faster means of transportation, but only when going downriver, the rest of the time it was best to travel by stage coach. It took them five days by stage coach to reach Basel where friends were waiting for them.

After a day’s rest, they travelled by stage coach to Montbeliard , and from there they continued on by river coach to Chalon-sur-Saone, a town south of Beaune. Having made prior arrangements, a local winemaker whom they hadn’t seen in years welcomed them in his beautiful country estate. The next day, their host introduced Jean-Baptiste and François to Joseph Bouchard, a wine merchant from Beaune. They were told the Givors factory on the outskirts of Lyon was making glass using ovens fired by ground coal. And because glass made with coal as a fuel instead of charcoal was much stronger, and because the glassblowers had started using handheld molds, they now made less fragile and more uniformly shaped bottles more quickly. Because the bottle necks were thickened and had a standard diameter, it was now possible to use a one-size-fits-all cork stopper. Bouchard told them there was plenty of wine available, but getting fifty thousand glass bottles at a time might be a problem. He told them it was best to check with Michel Robichon who was the glassmaker in Givors. As for the corks, the cork slabs could be bought in quantity in Arles, transported to Beaune where they could be suitably shaped. All in all, he thought it was quite a feasible operation, and it would be no problem to fill the bottles with the best wine of the region and cork the bottles in a matter of days. Bouchard was already experimenting with the bottles, and he promised to give them wine samples on their return trip home. If Givors supplied bottles in sufficient quantity and at the expected price, he stated he could get the wine to Rotterdam via Basel for around nine pennies a bottle.

Jean-Baptiste and François were quite excited and were anxious to go to Givors to visit the glass factory and interview Michel Robichon, the owner. They left their wives with family in Lyon and continued on to Givors the following day when they reached the glass factory, they acquainted Robichon with Mayer’s idea of financing regular shipments of bottled wine using the services of Joseph Bouchard in Beaune. They told Michel they had talked to Joseph, and that his only concern was having enough bottles. Naturally, they wanted to see if his factory could supply lots of fifty thousand bottles on an ongoing basis.

Jean-Baptiste and François were happy to hear Michel say that he had just put in a second oven and that a third was on the way. Since one oven supplied enough glass to accommodate four glass masters, and since each master could turn out five hundred bottles a day, it meant that the production would soon be six thousand bottles a day, thirty-six thousand a week or some two million a year.

Michel added one cautionary note. The factory was presently getting its high quality ground coal from Rive-de-Gier, a mine situated fifteen kilometers from Givors. The canal that was meant to transport the coal by barge was not yet completed, and the mine owners had to use mules to bring the coal to Givors. They had some twelve hundred mules in all, with two trains of four hundred mules making a daily turnaround while the remainder rested. With each mule carrying eighty kilograms of coal, it averaged out to a daily supply of around sixty tons. But since most of the coal was destined for the south of France, if he was to add extra ovens, he might not be able to get enough coal. However, he would put a little pressure on the coal mine owners by reminding them that his factory was operating under the Royal Seal, and was to be supplied in priority. But that was down the road. For now, there was more than enough coal to fire up the second oven, and it would take less than two weeks to produce the fifty thousand bottles. He could have molds made with logo indentations in order to identify the wine, and before shipping the bottles to Joseph Bouchard in Chalon-sur-Saone, he would package them in fifty bottle capacity wicker baskets.

Jean-Baptiste and François were happy and wasted no time getting back to Lyon where their wives were waiting. They spent a few days visiting family and friends, but they couldn’t wait to carry on downriver to Arles by water coach. It took them only three days to reach Arles under very comfortable conditions, and from there, it was a very short day trip by land coach to Nîmes where they had written ahead to Jean André, the owner of the cloth factory in Genoa, Italy.

When they finally met with Jean, Jean-Baptiste and François were pleasantly surprised to hear that he had every intention of going ahead with the production of the double-weave indigo cloth. They couldn’t believe it when Jean added that he was planning to move the production of this very promising cloth from Genoa to Mulhouse which was not far from Basel on the Rhine. It was a Huguenot city-state bordering France and the thousands of jobs being created were needed to help the growing economy. It didn’t cost much more to bring the raw cotton and indigo from the Americas up the Rhone instead of to Genoa, and because one of the two rivers that ran through Mulhouse had soft water and was perfect for dyeing cloth, the savings would more than offset the added transportation cost.

There were already fifteen cotton factories and more than two thousand cotton workers in Mulhouse, and with the advent of the flying shuttle, the spinning carding frame powered by a water wheel, two recent inventions developed in England, the cost of producing cotton cloth had dropped while the quality and production had increased dramatically. With the added planned production, Mulhouse would become the biggest cotton manufacturing center in continental Europe, and because the city was independent of France, they weren’t affected by the embargo imposed by France on the production of cotton fabrics. Understandably, since the demand for cotton cloth was exploding, the fabric would no doubt attract high prices for years to come.

Jean told them that his cotton mills would be operational within a few months. He had already bought an existing factory on the Mulhouse riverfront, and the equipment being fabricated by local artisans was likely finished by now. Jean told them his director in Mulhouse would soon be able to deliver twelve hundred bolts of the finished indigo double-weave product to Basel on a regular basis for around £10 per bolt. They confirmed that with Jean-Henri Dollfus, the man running the Mulhouse factory, on their way back to Frankfurt. Dollfus had already received several barges of raw cotton from the French West Indies along with indigo.

Before Gretel had a chance to give vent to her unbelief, Mayer sat down at his desk to write to Joseph Bouchard in Beaune and Jean André in Nîmes telling them he was willing to buy as much product as possible at the agreed price. There was no time to lose for the letters had to be translated by François before being sent on. He was telling Joseph Bouchard to deliver all the grand cru Burgundy wine he could bottle. Mayer would give him a letter of exchange redeemable upon delivery in Rotterdam. He then addressed a letter to Jean André asking him if he would agree to the same financial conditions. Just like with the wine, Mayer would buy all the cloth that could be delivered to David in Rotterdam where the letter of exchange would be redeemed.

Soon, it would be possible to redeem Mayer’s bills of exchange, and even use them as currency, in Frankfurt, Rotterdam and the 13 Colonies, not including the counting houses that would soon open in London and Basel. He had contacted Moses Haim Montefiore in Rotterdam, the friend who had helped David Schiff get settled, asking him if he was interested in running a counting house in London. Moses had replied by return mail that he had been thinking of settling permanently in London, and running a counting house for Mayer in that city was more than he could have hoped for.

By the end of 1773, David was receiving tobacco on a regular basis and he had dispatched the first shipments of Burgundy wine and denim cloth. In both Rotterdam and New York, everything always presold at a price better than anticipated, and Mayer’s counting houses were becoming financial institutions of note. He was now ready for his next venture.

He wrote to Haym asking him to come to Frankfurt as soon as possible. Haym was to first go to Williamsburg in Virginia and introduce himself to as many members of the House of Burgesses as possible in order to see what the political climate was in that very important southern colony. Virginia was the most democratic colony, and its leaders had always been stalwart supporters of the Crown. Nonetheless, die-hard loyalists had started being upset with the English Parliament just like in the colonies up north, and Mayer wanted to confirm that. Haym was to identify any leader who stood out in his opposition to the Crown, preferably someone who was imposing, ambitious and vain.

The very powerful Bank of England, by way of the English Parliament, was treating the 13 Colonies as a parent would a child. Although the pound was the official currency, the Bank of England supplied very little sterling in order to facilitate trade. The colonials were reduced to using tobacco, wampum and the like when they couldn’t get their hands on Spanish dollars. The lack of credit, the unjust rate of exchange between the Spanish dollar and the Pound, the lack of representation in decision making, and the unjust taxes forced upon the colonials by the Mother Country was making for an explosive situation.

Mayer was honest and had enough specie to redeem all the paper he was issuing, and because his counting houses on both sides of the Atlantic used the same conversion rates, his paper was in high demand. In all his counting houses one pound was worth 1 oz. of silver or 1 Piece of Eight, and 1oz of gold was worth 15 oz. of silver. And since the British insisted on a colonial conversion rate of 4 Pieces of Eight to the Pound, it gave Mayer’s counting houses a serious edge over the English. Necessarily, all bills originating from the colonies were expressed in Spanish Dollars, whereas all merchandise coming from Rotterdam was valued in Pounds, as this greatly advantaged the American colonials. Since Mayer’s counting houses only accepted gold and silver as payment, and since Haym was instructed to never exchange Dollars for Pounds, the great disparity in the English exchange rate didn’t affect his counting house.

Mayer’s counting houses were gaining in international status, and he had more than he needed to finance a meeting of the 13 Colonies. The colonies’ representatives would not question the help of Haym Salomon, for it was only natural for a rich friend who profited so much from colonial trade to help out. The Americans would surely gain their independence, and they would look upon Mayer’s counting house as an honest, dependable source of credit, and Mayer would take control of the 13 Colonies’ monetary system just like the Bank of England bankers had done with that of England a century before, but he would do it anonymously through Haym Salomon and Robert Morris.

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15-INTERNATIONAL TRADE

Mayer didn’t want to scare Gretel by telling her about the huge tract of land he had recently bought on the outskirts of Frankfurt. It was a parcel of around two hundred acres of forest and marshland to the west of the city, well beyond its walls. Now that Haym was more or less confirming what he already knew regarding America, it was obvious he would need more office space. As soon as the landscaping allowed it, he would go ahead with the building of a grandiose manor that would serve as his headquarters. The marshland would be transformed into a vast botanical garden, and he already had a name for the palatial structure to be built at the north end facing south. It would be called Green Castle. Officially, it would be Peter Heinrich von Bethmann’s residence, but unofficially, it’s where Peter would run Mayer’s banking operations, and where Mayer would keep his vaults and accommodate out-of-town business associates and friends. From the terrace of Green Castle there would be a panoramic view of huge stretches of lawn, trees, ponds and many exotic plants and animals, things that were completely foreign to the Judengasse ghetto. It would be a peaceful place where Gretel could go and enjoy the fresh air and the luscious green beauty with the children. He knew Gretel would find this private green paradise hard to resist once she was introduced to it. Above all, this property was subject to the authority of Prince Wilhelm, not that of the Frankfurt Council.

Mayer sat down and wrote Haym that he was to go ahead with the tobacco shipment. He told him he would confirm it with David who would then get the necessary warehouses built in Rotterdam. Haym was to get the best tobacco available, for high quality products attracted higher prices and could be sold more easily.

As for the wine and denim, he told him he was acquainted with two Frenchmen in Frankfurt who were in a position to help. Jean-Baptiste Willermoz had a silk factory in Lyon, France, but spent a lot of time in Frankfurt where another Frenchman, François Johannot, operated a silk factory as well. The high-end silk business wasn’t doing so well and they would certainly welcome a chance to get involved in a more lucrative business. He was certain that Jean-Baptiste, François, and their wives would welcome a chance to have a first class, fully financed voyage to the south of France while inquiring about the availability of bottled wine and denim cloth. The offer to leave winter behind them, visit family and friends in Lyon, and bask in the Mediterranean sun was a powerful enticement.

With the help of Jean-Baptiste and François he was certain he would soon be financing wine and denim shipments to Rotterdam, London and NYC. This would work out extremely well, for wine and denim shipments would go down the Rhine by barge to Rotterdam, and the same barges would come back up the Rhine with arms and military supplies for Prince William along with pre-ordered manufactured goods to cities all along the way. In anticipation, he was arranging to have more of the Roman-type barges constructed in Hanau. So far, his barges on the Rhine were proving to be quite a success, and because they all flew the Prince’s colours, they hadn’t been harassed by the bandit lords and forced to pay tolls. He intended to continue the same modus operandi with the wine and denim shipments.

He finished his letter to Haym, and took it to the Thurn and Taxis office for delivery to America. He came back in time to have supper with Gretel and his precious little Yochana. He told Gretel he was planning to go to Rotterdam to acquaint David with the latest developments, and that he would be gone at most three weeks. When prompted by Gretel, he proceeded to tell her what was on his mind.

He had already told her how the Sephardi Jews had joined up with the Huguenots and created the Bank of England in 1694. He explained that he saw an opportunity to do the same in America. The Americans needed credit, and since the Bank of England bankers wasn’t providing it, he would. Everybody trusted his bills of exchange, and they would soon be widely accepted on both sides of the Atlantic. If he helped the Americans win their independence from England, his bank would then be automatically recognized as the official bank of America when the time came.

For now, he was planning to finance shipments of high quality products in both directions across the Atlantic. When merchants became convinced that his bills could be redeemed for specie and on demand on both sides of the Atlantic, and that his exchange rates for Thalers and Pounds were fixed and fair, he was sure that instead of going through the trouble and cost of redeeming them they would just sign them over to third, fourth, and fifth parties. On the other hand, David and Haym would be instructed to only accept specie for all sales. Specie would accumulate with each shipment, and both counting houses could then issue more bills of exchange. As he waited for the sale of the first shipment of tobacco that would soon be concluded in Rotterdam, he was making plans to send Jean-Baptiste and François to France to look into the wine and denim possibilities.

As Gretel grasped the huge sums of money her husband would be making, she worried about her family and told him this wasn’t what she had expected when she married him. Mayer reassured her. He had no intention of showing his wealth and letting everybody know how rich he was. He told her that his name would never be officially connected to anything he did because he didn’t want to stir up feelings of envy and hatred. He told her he was not interested in flaunting his wealth, and the only thing that mattered was for her to be proud of him.

He explained how he planned to finance the Americans in their fight for independence, and once achieved, how he would create a bank for them without their ever knowing who he was. His financial operations would be international in nature, and that would ensure his success and his anonymity. His counting houses on both sides of the Atlantic would be run by people who don’t officially answer to him, like Haym and David. Because each counting house had to interact with the others, they would be independent, yet firmly part of the whole. Notwithstanding the fact he trusted his agents with his life, the counting houses would be accountable to each other and to Mayer without his ever having to be present.

Mayer intended to surround himself with Ashkenazim who would become an extended family network, and he would use goys only when he had to. Haym may have been a Sephardi, but he was like a brother. He respected and trusted David and Haym, and by giving them everything they could possibly want, he was sure of their respect and loyalty, and this allowed Mayer to work in total anonymity. Maintaining anonymity, making astounding amounts of money and being magnanimous and honest in all transactions at all times was the key for lasting success.

Gretel loved this man, and as he picked up Yochana and started singing from the Torah, she was the happiest woman in the world. She didn’t want to lose that. But she also knew that if Mayer didn’t follow his dream, he would cease to be the man he was, and she could not bear that.

The next morning, before leaving to meet with Jean-Baptiste and François, Mayer told her how important that meeting was. French wine was the best in the world, and there was talk that the Burgundy wine could be bottled in uniform-sized bottles. The other product had to do with cloth. The Huguenots, in wanting to have a country of their own, had emigrated to the Prince-Bishopric of Basel where they were weaving cotton cloth which was in great demand, but which was forbidden in France proper. They grew cotton in the Caribbean islands and were shipping it up the Rhone-Saone-Doubs river system to Montbéliard and then by land to Mulhouse, the industrial center near Basel.

Mayer wanted Jean-Baptiste and François to look into those two products. If it turned out as he expected, he would consult with Haym, authorize the shipments, and then help the Americans gain their independence. He would start by financing a meeting of the thirteen colonies with the aim of creating some kind of government. He would find and finance leaders who were opposed to English rule, and since Virginia was the most sophisticated politically, that’s where he planned to concentrate his efforts. But for now, he had to accumulate as much bullion and specie as he could, and the only way to do that was to be a businessman.