APPENDIX 2
Exchange Rates and Selected Financial
Statistics
The exchange rates between currencies in
late-eighteenth- and early-nineteenth-century Europe varied
according to the metal content of coins, and conversion of one
currency into another is not always easy. In Frankfurt, the gulden
was the denomination most frequently used, though sometimes figures
were given in terms of the imperial thaler (Reichsthaler). One
Reichsthaler was equal to around 1.79-1.89 gulden. A British pound
sterling was equal to 10.2-11.2 gulden. After the return of the
pound to gold convertibility, it strengthened against the gulden
and for the rest of the century the exchange rate was 12 gulden to
the pound (see table a).
However, simple conversion of gulden into pounds
can be misleading, as it takes no account of differences in
purchasing power. The cost of living was generally thought to be
higher in England, and especially in London, than on the continent,
but the benefits of colonisation and industrialisation meant that
around this time certain commodities (for example cotton goods)
were becoming much cheaper in England. For this reason, I have
converted gulden figures into pounds in the text only where some
sort of comparison seems helpful.
Table a: The sterling exchange rate of the
Frankfurt gulden, 1798-1836.
Source: Rothschild correspondence.
A private partnership of the sort formed by the
five Rothschild houses was under no obligation in the period
covered by these statistics to produce balance sheets or profit and
loss accounts. The profit and loss accounts for N. M. Rothschild
& Sons are based on summaries (the purpose of which is not
known) which begin in 1829. The accounts are simple: on one side
all the year’s sales of commodities, stocks and shares are listed;
on the other, all the year’s purchases and other costs; the
difference is recorded as the annual profit or loss. Table b gives
the “bottom line” data and also figures for net appropriations
(withdrawals and new capital) by partners.
Nineteenth-century banks did not draw up balance
sheets or profit and loss accounts in a standardised way, so
comparisons with other banks for which figures are available must
be made with extreme caution.
Table b: N. M. Rothschild & Sons: profit
and loss accounts, 1829-1848 (£).
Sources: RAL, RFamFD/13F; RFamFD/13E.