![Sample our Humanities journals, sign in here to start your FREE access for 14 days]({"type":"image" , "src" : "/sda/5939/TOC-Subject-Sample-2021-Humanities.jpg"})
Abstract
Taking business decisions in large corporations requires the establishment of a competent network to channel information, permit the delegation of routine decisions, and assure the whole process is undertaken in the strictest confidence. Recent theories on social networks and the carrying out of the entrepreneurial function tackle these questions and constitute a new perspective for examining business cases. From this viewpoint, the present article seeks to analyse the entrepreneurial network established in Spain by the House of Rothschild between 1835 and 1931. It was a perfectly structured network that differentiated between agents, clientele, partners, and correspondents in a web of firms and institutions that allowed the Rothschilds to exercise their industrial and financial hegemony and consolidate themselves as the country's largest investor in the financial, industrial, railway and mining sectors throughout the stated period.
Acknowledgements
The authors are very grateful to Maria Semitiel, Paloma Fernández, Pablo Díaz, Eugenio Torres and the participants in the X Simposium de Historia Económica in Barcelona (January 2005) and the B12 panel in the VIII Conference of the Spanish Association of Economic History (13–16 September 2005), for their useful comments. Jonathan Pass helped us in methodological and linguistic questions. The research programme PAI SEJ 246, from the Regional Government of Andalusia, gave financial support to the final version of this work.
Notes
1. From the fourteenth century, mercury was the only cheap way to obtain silver and gold from low grade ore. Because of its high price and scarce world production, concentrated in Almadén, it constituted one of the Spanish government's principal forms of revenue for three centuries. In the nineteenth century mercury was still used in the Mexican silver mines and its use was extended to other industrial processes, such as the gilding of metals, the manufacturing of physical objects, paint and mirrors and, above all, as detonators.
2. In 1856 the Rothschilds also financed a large part of the Sociedad Española Mercantil e Industrial, that was sold off in 1868, and the Agrícola del Lupus Cía between 1928 and 1941 in Spanish Morocco. The Rothschild Archives, Paris (Archivos Rothschild París), Centre des Archivos du Monde Du Travail (hereafter, ARP), 132 AQ 344 and 352.
3. Rothschild Archives, London (Archivos Rothschild Londres), henceforth ARL, 000/89.
4. This power of attorney was signed on 13 June 1835 (Otazu, 1987, p. 41). There is a copy of it in French in ARP, 132AQ 40.
5. Archivo del Banco de España, Secretaría, Cajas 1015 y 1022 y registro, 1a. Transferencia, legajo 553.
6. ‘Agencia de Madrid’ file ARP 132AQ 24.
7. Comunicación al Banco de España de 01/01/1877, Archivo del Banco de España, antiguo Registro, 1a transferencia, legajo 533.
8. The Rothschilds had, for example, stipulated that only male heirs would be a part of the family business, by virtue of their stake in the legacy (rights were proportionally divided among each of the first five heirs, subsequently being separately divided among their own heirs); daughters and their husbands had to expressly relinquish the family legacy.
9. Alphonse Rothschild did the same with one of his daughters, who married another partner of the Maurice Ephrussi firm. The goal of this union was, according to Ferguson (Citation1998, p. 903) to establish closer links with the Russian Jews.
10. Letter from Bauer, 4 May 1874, ARL XI/109/115. On the 12th June Bauer informed that he had still not found a correspondent in Havana, because in his opinion, there was nobody ‘good enough’.
11. See the work of Andrew Godley (Citation2000) and Doreen Arnoldus (2002), who have demonstrated that the business networks run by Jews were more effective than those of their competitors.
12. Letters dated 19 Sept. 1835 and 22 March 1836, Bank of Spain Archives, Secretary, documents 1,196 and 1,259.
13. When the Rothschilds were officially put in charge of the contract rights Ansoategui became their direct sales agent in Cadiz and later in Seville, until at least 1851; RAL XI/38/3-5.
14. Directors charged ESP 100 per session, which amounted to ESP 10,000 per annum. The President, however, earned just ESP 250 extra per annum. Fundación Ferrocarriles Archives, MZA, Secretary, S-0012-1029. Likewise other big foreign and national companies also included prestigious Spanish politicians on their boards (see Cabrera & Del Rey, Citation2002).
15. José Canalejas senior had been Managing Director of the Badajoz Company, and his eldest son, José, the Secretary.
16. In Spanish political history, caciquismo is defined as the institutionalised system through which the political forces of the Restoration period (1874–1923) established power networks in agreement with the local caciques (generally people of renowned prestige and economic power). Their normal course of behaviour was the encasillado, through which the Parliament's poll results were decided beforehand in each and every constituency.
17. In nineteenth-century agency letters it was usual to write the client's names or confidential matters in Judendeutsh (German in Hebrew characters). In the twentieth century the first completely numerically coded letters started to appear.
18. Letter from the Paris to London head office dated 1 Sept. 1871, ARL XI/109/107.
19. Letter from Weisweiller and Bauer dated 15 March 1872 (ARL 000/374/1).
20. In a letter dated 1 Aug. 1895, Gustavo Bauer recognised that Bauer's company received ESP 51,000 a year from Deutsch ete Cie, ARP 132AQ24.
21. The Board of Peñarroya accepted Weil being given the supervision of the financial services part of the company in Spain in exchange for FF1500 per annum. Metaleurop Archive, PYA-Juridique. no. 257. Procès-Verbaux des Séances du Conseil d'Administration. Book 1, session 14 Nov. 1881.
22. Anuario de los Ferrocarriles (Railway Annals) and Memories of MZA.
23. Say became related by marriage to Bazile Parent (his son-in-law), although the date of the wedding is not known. Hence it is not possible to infer whether or not it was related to the creation of Peñarroya or the merging with Badajoz, of which he was a shareholder and founder.
24. Letter to Bauer, dated 27 June 1870, RAL, XI/109/102. Bauer had originally suggested offering a large loan to secure the Almadén business but immediately received a letter from Daniel Weisweiller ‘where he told us that in order to ensure the mercury business you should offer a substantial bribe (written in Judendeutsch)’. Letter from Bauer, 20 March 1870, RAL XI/109/101.
25. This was the case of Salaverría, who, on his entering into government, was asked to resign from the MZA board.
26. See legislative changes: 11 July 1860, 29 Jan. 1862, 4 July 1865 and 24 April 1866.
27. From 1906 a new agreement institutionalised a joint commission between MZA and Norte which was responsible for revolving the combined general transport policy and to reach an agreement on the transportation of specific merchandise, Fundación Ferrocarriles Archives, Minutes of the MZA-Norte Mixed Commission (1906–1918), L/0454-0458.
28. In total, the company had to pay £1,122,000, equivalent to ESP 32,908,260, which resulted in the Rothschilds lending it £500,000; RAP 132AQ 104 and 106. See also Avery, 1974, pp. 324–327, 341; Harvey, 1981, pp. 140–141, 256.
29. Metaleurop Archive, PYA-Juridique. no. 257. Procès-Verbaux des Séances du Conseil d'Administration. Book 2, session dated 18 March 1891.
30. Ibid., Book 2, session dated 19 Oct. 1892.