Networks of International Jewish Bankers.

Königswarter and Bischoffsheim in Amsterdam, 1817-18621

Huibert Schijf

Abstract

The paper explores the connections of two German-jewish banker families who as economic
migrants stayed in Amstedam in the 1850s. The emphasis in much research on trading
Diasporas and financial minorities lies on the strong ties within the group, usually created
through (arranged) marriages. On the other hand, research has paid little attention to the
existence of ties bridging several tightly knitted groups that provide all kinds of information
and hence offer new business opportunities. To investigate the various links of the two
families the time-honoured concepts weak ties and strong ties introduced by Granovetter are
used. Belonging to a banking family and choosing co-religionaries as partners are universal
principles, and today these strategies are as important as ever for migrants starting their own
business in a favourable niche. The European bankers in the past were dealers of abstract
commodities: money and information while using their global and local social capital. In this
respect, they initiated as nineteenth-century representatives aspects of the modern global
world economy. The conclusion should be that Jewish bankers followed the same principles
that many other ethnic minority groups have followed before and afterwards.

1
Paper presented at the XVth World Economic History Congress, Utrecht, 3-7 August 2009, Session
Entrepreneurial Minorities and the Modern Economic Growth, XIX-early XX centuries. I would like to thank
Mr. S. de Koenigswarter for the information he provided about his family. I also like to thank Cyril Grange,
Ghislaine Lydon, Francesca Trivellato and Sikko Visscher for their instructive comments.
1. INTRODUCTION

‘For centuries, financial services in countries all over the world were disproportionately
provided by members of ethnic or religious minorities, who had been excluded from land
ownership or public offices but enjoyed success in finance because of their own tight-knit
networks of kinship and trust.’2 For historical reasons members of Jewish minorities formed a
substantial group among the European providers of financial services over many centuries.
One explanation for the prominent position of Jews in finance might be the intrinsic values of
the Jewish religion and its ethic. Explanation might then be found in Max Weber’s thesis of
the Protestant ethics or in the contested elaboration by Werner Sombart in his Die Juden und
das Wirtschaftsleben published in 1911. Sombart’s argument is that without the Jewish
contribution modern capitalism could not have developed. This is an empirical unsound
argument although Jews without doubt offered important contributions to the several
economies in the nineteenth century.3 This approach will not be pursued, as the paper
elaborates a different ankle by looking at Jewish bankers as a trading minority.
In fact, financial services were never exclusively executed by Jews, although that is the
dominant stereotype. Mennonites in Amsterdam or Quakers in London were among the many
religious groups who provided financial services in the nineteenth century. In South-east
Asian businessmen belonging to Chinese Diasporas operated in the same fashion by lending
money to local sovereigns and businessmen. All these groups were essential outsiders.4 This
paper purports therefore to argue that Jewish economic history should be studied as a specific
case of the economic history of religious entrepreneurial minorities in general.5
It focuses on the question how international Jewish bankers operated in the nineteenth century
by using the case studies of two banking families who as economic migrants migrated from
Germany to Amsterdam and ultimately moved to Paris. By studying their strategies to create
trust and international networks I will use concepts from social network analysis making a

2
N. Ferguson, The Ascent of Money. A financial History of the World, (Penguin Books, 2009), p. 3.
3
For one of the best critics of the Sombart’s thesis see J. Guttmann, ‘Die Juden und das Wirtschaftleben,’ Archiv
für Sozialwissenschaft und Sozialpolitiek, 36 (1913), pp.149-212.
4
This argument is pursued by D. Chirot. & A. Reid (eds.), Essential Outsiders. Chinese and Jews in the modern
Transformation of Southeast Asia and Central Europe (University of Washington Press 1997); see also I. B.
McCabe, G. Harlaftis and I. Pepelasis Minoglou (eds.), Diaspora Entrepreneurial Networks. Four Centuries of
History (Oxford, 2005).
5
See for a very helpful discussion Nachun T. Gross, ‘Entrepreneurial of religious and ethnic minorities.’ In
Werner E. Mosse and Hans Pohl (Hrsg.), Jüdische Unternehmer in Deutschland im 19. Und 20. Jahrhundert,
(Stuttgart 1992), pp 11-23.

2
distinction between two types of connections, weak ties and strong ties. Furthermore, the
paper will focus on the position of bankers as members of extended families who, with far-
reaching European contacts, were able to create and sustain extensive financial networks. In
the nineteenth century, many of the Jewish bankers who operated at the European level were
of German descent and they played an important and innovative role in banking, the
foundation of new industries and railway companies.6 It this way they contributed to the
economic development in several European countries. The two families discussed did the
same in the Netherlands, Belgium and to a lesser extent France.

2. GERMAN IMMIGRANTS TO AMSTERDAM

Julius Königswarter, the founder of the Amsterdam branch of the Königswarter banking
house, was born in Fürth in 1781, a small town nearby Nürnberg in Bavaria. Around 1800, the
town counted 13,000 inhabitants, among them 2,400 Jews. According to the Address Book of
1819, there operated eleven money exchange houses in Fürth including the one owned by
Jonas Hirsch Königswarter (1740-1805), Julius’ father. Two of Julius’ brothers settled as
banker in Vienna (Moritz Jonas) and Frankfurt am Main (Marcus Jonas), while his brother
Simon Jonas briefly stayed in Amsterdam where he prepared the migration of his younger
brother Julius to the city around 1817. Soon thereafter, Simon would return to Fürth to take
control over his father’s exchange house.
The Königswarters and the Bischoffsheims were German families of internationally
performing Jewish bankers. Many nineteenth German banking dynasties were no
stranger to the financial world because ancestors had operated as traders or financial
operators, so-called Hofjuden, for Sovereigns in the past.7 But the Königswarters and
the Bischoffsheims were of rather modest descent8 and not connected to that remarkable
group of Finanzadel like the famous Rothschild’s brothers. The father of Julius
Königswarter was a modest money-dealer. Raphael Nathan from Mainz, the father of
the two Bischoffsheim brothers, Louis-Raphael and Jonathan-Raphael, started as a
modest merchant who earned his fortune with supplying the French armies. “Banking
(…) was for aspiring young Jews from modest background a most promising avenue of
upward social mobility,” as Mosse concludes.9

6
H. Schijf, Netwerken van een Financieel-economische Elite. Personele Verbindingen in het Nederlandse
Bedrijfsleven aan het Einde van Negentiende Eeuw (Amsterdam, 1993).
7
Carsten, F.L. ‘The Court Jews. A Prelude to Emancipation.’ Leo Baeck Institute Year Book, 3 (1958), pp. 140-
56.
8
Personal communication by Shaun Baron de Koenigswarter, d.d. 3-2-2004.
9
Mosse, W.E. Jews in the German Economy. The German-Jewish Economic Elite. (Oxford, 1987), p. 382.

3
Some families remained successful bankers over several generations, other families declined
into relative obscurity after one or two generations. It is also worthwhile to look at the religion
of the bankers because as members of Jewish Diasporas they experienced exclusion from
many sectors of social and economic life over a long period. Financial dealings became one of
their specialities and that had already started in the Middle Ages.10 Without doubt, the best-
known example is the Rothschild family who in 1820s was already able to use a wide-ranging
business network of weak ties all over Western Europe, which provided them with a constant
stream of information.11
The Emancipation of the Jews, due to new legislation enacted around 1800 and the ensuing
decennia in many Western-European countries, gave Jews equal rights as other citizens.12
However, they did not immediately opt for these new opportunities as many a family
preferred to continue their long-standing economic activities. Others became even more
specialized by focusing exclusively on banking. In 1871, a new German emancipation law
finally abolished all restrictions based on religious differences, civil and political rights. The
new legislation also opened more and other economic and academic opportunities for Jews.
This article purports to discuss the various networks used by Jewish bankers in the nineteenth
century to create cooperation and trust between partners and to minimise transaction costs in
their global and local financial relations, where the global links are restricted mainly to the
political, economic and cultural space of Europe. Apart from international dealings, the
bankers also participated in local economic life, social society and various kinds of
institutions, as they dwelled locally, entertained local friends and developed local business
contacts. Their international networks therefore never operated in isolation from local society.
The Königswarter and Bischoffsheims provide examples for making comparisons with other
Jewish bankers in the city of Amsterdam and elsewhere in Europe.
Both the Encyclopedia Judaica and the Jewish Encyclopedia contain entries on the families
and individual members, but the information supplied is limited and not always accurate. The
paper will focus on the Dutch branch of the Königswarter banking dynasty during its forty
years stay in Amsterdam. Both Julius and his son Henri contributed in several ways to the
economy of Amsterdam, but the family left no permanent legacy and nowadays its name is
only known among specialists of the financial history of early nineteenth century

10
J.I. Israel, European Jewry in the Age of Mercantilism, 1550-1750. (Oxford, 1985).
11
N. Ferguson, The World’s Banker. The History of the House of Rothschild (London, 1998); see also Rainer
Liedtke, N.M. Rothschild & Sons. Kommunikationswege im europäischen Bankenwesen im 19. Jahrhundert,
(Köln, 2006).
12
W. Grab, Der deutsche Weg der Judenemanzipation 1789-1938 (München, 1991), pp. 296-304.

4
Amsterdam.13 In Amsterdam, documents, especially detailed records of financial activities, or
correspondence related to the family Königswarter hardly exist and in France most family
documents were lost during the Second World War. Nevertheless, the material cited below
offers glimpses of the family’s local life in Amsterdam and, by circumstantial evidence, of
some of its business activities. Two time-honoured concepts ‘strong ties’ and ‘weak ties,’ will
be applied to examine the connections of this Jewish banking family.

3. NETWORKS AND SOCIAL CAPITAL

In his seminal The Strength of Weak Ties, Granovetter divides a personal network in two
types of links with other people, strong ties and weak ties.14 Strong ties are the close links
with friends and family and they represent multi-faceted connections, i.e. they fulfil more than
one single purpose. In the case of banking families, kinship networks are the most
conspicuous example of strong ties as was already the case in early modern times.15 Marriages
within the family contributed to maintaining these strong ties, as genealogical information
shows. It will be argued that these ties are of the utmost importance for keeping capital within
the family, for maintaining trust among business partners and therefore keeping transactions
at low cost. However, if a person’s strong ties are those in which there is a strong investment
of time and affect, then this creates a paradox. The disadvantage of these particular links is
that they can create inward looking clusters where receiving new information or perceiving
new business opportunities is limited. On the other hand, weak ties are usually single-purpose
links between acquaintances, in this case business partners. In his study on the spread of new
information through a network, Granovetter argues that the strength of these weak ties lies in
bridging closely-knit groups with other closely-knit groups. In addition, by bridging these
clusters new information and hence new business opportunities might emerge.16
Through networks, people can acquire social capital.17 According to the classic definition by
Bourdieu, social capital refers to ‘actual or potential resources which are linked to possession
of a durable network of more or less institutionalized relationships of mutual acquaintance or

13
J. Jonker, Merchants, Bankers, Middlemen. The Amsterdam Money Market during the first Half of the 19th
Century (Amsterdam1996).
14
M. Granovetter, ‘The Strengh of weak Ties’, American Journal of Sociology, 78 (1973) pp. 1360-80; M.
Granovetter, ‘The Strengh of weak Ties: a Network Theory revisited’, Sociological Theory, 1 (1983) pp. 201-
233.
15
F. Trivellato, ‘Juifs de Livourne, italiens de Lisbonne, hindous de Goa: Réseaux marchands et échanges
interculturels à l’ époque moderne’, Annales, économies, sociétés, civilisations, 48 (2003) pp. 581-603.
16
M. Granovetter, ‘Network Theory revisited’, Sociological Theory, 1 (1983), p. 217
17
A. Portes, ‘Social Capital: Its Origins and Applications in Modern Sociology’, Annual Review of Sociology, 24
(1998) pp. 1-24.

5
recognition’.18 However, maintaining such a network successfully also implies mutual trust
and cooperation among the members, and, of course, the ability to sanction misbehaviour by
partners. As most people, the Königswarters and Bischoffsheims were part of multiple
networks covering several aspects: kinship, friendship and business.
Henri Königswarter was also instrumental in the financial training of A.C. Wertheim who
started his apprenticeship with J. Königswarter & Co. at the age of seventeen. The wife of
Wertheim’s uncle was a distant relative of the Königswarter family. In the second half of the
nineteenth century, Wertheim would become an innovative Jewish banker in Amsterdam.19 To
enlarge our understanding of the position of both father and son Königswarter they will be
compared with some other Amsterdam Jewish bankers as well. The first is Louis-Raphaël
Bischoffsheim who arrived in Amsterdam some years after Julius Königswarter and the
second is the above-mentioned A.C. Wertheim who was born in Amsterdam in a well-
established Dutch Jewish family of small merchants.20

Figure 1 about here

Figure 1 shows the two financial networks of the Rothschild and Königswarter families
around 1820. The home base for the Rothschilds was Frankfurt am Mainz. Five Rothschild
brothers coordinated their businesses between five European capitals; the starting point for the
Königswarters was Fürth and this family had a network of five cities, although the links were
less international than the ones of the Rothschilds. Both families had an office in the capital of
the Habsburg Empire and representatives of both families in Vienna were involved in the
foundation of the famous Austrian K.K. Priv. Oesterreichische Creditanstalt für Handel und
Gewerbe in 1855.21 When the Königswarters founded another bank in Paris, the French
capital became the second meeting place between the two families. It is unknown whether
Marcus Königswarter as a banker experienced competition from the settled Jewish bankers in
Frankfurt, but his marriage to a daughter from the wealthy and highly esteemed Wertheimer
family almost certainly helped him to level social barriers with the Jewish elite of the city.

18
Cited in A. Portes, ‘Social Capital’, p. 3.
19
A.S. Rijxman, A.C. Wertheim 1832-1897. Een Bijdrage tot zijn Levensgeschiedenis (Amsterdam, 1961).
20
Rijxman, A.C. Wertheim, p. 14-15.
21
H. Schijf, 2005, ‘Jewish Bankers 1850-1914. Internationalization along ethnic Lines.’ in I. G. McCabe
Baghdiantz, G. Harlaftis and I. Pepelasis Minoglou (eds.), Diaspora Entrepreneurial Networks. Four Centuries
of History (Oxford, 2005), pp. 199-200.

6
Many of the cities where the families settled were Capitals of Capital, to use Cassis’ phase for
these international financial centres.22

4. TWO GERMAN-JEWISH BANKERS: KÖNIGSWARTER AND BISCHOFFSHEIM

Soon after the French occupation of the Netherlands ended in 1813, a handful of German-
Jewish bankers arrived in Amsterdam, a city then very much in decline. They were not the
first group of Jewish immigrants who came to the city, but the successful Sephardic bankers
and merchants from the seventeenth and eighteenth century had almost all retired from their
business in the early nineteenth century. Jewish businessmen continued in the same economic
sectors as their ancestors had done: finance, the trade of diamonds and the garment industry.
None of these sectors showed much dynamics before the German immigrants arrived.
Although economically speaking the capital was in bad shape in that period, several factors
made Amsterdam an attractive financial place for newcomers. The end of the British blockade
during the French occupation opened up the economy based on international trade again,
although the economy as a whole remained in a very poor condition for several decades.
Important for the stability of the economy was the foundation of a central bank, the
Nederlandsche Bank. The vast colony in the East Indies offered many business opportunities
again after the British state returned them to the Netherlands in 1816. In this period of a new
economic take-off, the foreign bankers brought a cosmopolitan culture and international
financial contacts to Amsterdam.23 The bankers adapted to the local circumstances, but they
remained also part of internationally oriented kinship networks, especially towards Germany
where at least some sedentary siblings lived.
When Julius Königswarter exactly arrived in Amsterdam is unknown, but according to a
notary act, his elder brother Simon transferred his broker license at the stock exchange to his
brother in 1817.24 Simon also bought an appealing house, but not extremely large, along one
of the main canals, Keizersgracht 387, for his brother where the family would live for the next
four decades. Simon would remain the owner of the house until the death of Julius,
whereupon Henri bought the house from his uncle.25 In that period wealthy Amsterdam Jews
22
Y. Cassis, Capitals of Capital. A History of International Financial Centres, 1780-2005 (Cambridge, 2006).
23
J. Jonker, ‘In het Middelpunt en toch aan de Rand. Joodse Bankiers en Effectenhandelaren 1815-1940.’ in
Venter, Fabriqueur, Fabrikant. Joodse Ondernemers en Ondernemingen in Nederland 1796-1940, (Amsterdam,
1994), pp. 92-113; J. Jonker, Merchants, Bankers and Middlemen, pp. 249-53; N.P. Van den Berg, ‘Een
Geschenk aan de Stad Amsterdam. Achtergronden van de Bibliotheca Rosenthaliana’, Jaarboek Amstelodanum,
84 (1992) pp. 135-41.
24
Notary Bernard van Praag, 27 March 1817, nr 153. Notarial Archives, GA, Amsterdam.
25
Keizersgracht 387 still exists and is well-documented. I want to thank Paul Rosenberg of the Hendrick de
Keijzerstichting for allowing me to see some important deeds of sale concerning the house and the family
Königswarter.

7
started to occupy houses along the main canals taking a distance to the traditional Jewish
neighbourhood that never had the status of an enforced Ghetto. But the Königswarters and
Bischoffheims never lived in the traditional Jewish quarter.
In 1820, another young man, named Louis-Raphael Bischoffsheim, also arrived in
Amsterdam. He was twenty years old at that time and came from Frankfurt am Mainz where
he had learnt the business of banking from Hayum Salomon Goldschmidt while he had an
internship at Goldschmidt’s bank. This procedure was quite common at that time among
bankers and entrepreneurs in general. Bischoffsheim would become a friend of Goldschmidt’s
son Benedict Hayum and he married one of the daughters in 1822. Eventually Bischoffsheim
would buy a splendid canal house, Herengracht 500, where he lived among the Gentile
bourgeoisie of Amsterdam. His younger brother Jonathan-Raphael, who was then only
thirteen years old, joined Bischoffsheim in 1821. In 1827, a branch of the bank was opened in
Antwerp, then still part of the Netherlands, soon to be directed by Jonathan-Raphael. The
bank profited to the exchange rate of the two currencies in use in the Netherlands. Jonathan
would also marry a daughter of Hayum Salomon Goldschmidt in 1832 creating another strong
tie with the Goldschmidt bank in Frankfurt am Mainz.26 After Belgium became officially
independent in 1839, Jonathan-Raphaël decided to found a semi-independent investment-
banking house called Bischoffsheim & Goldschmidt in Brussels. He earned a very high
esteem in Belgium.27 Through his marriage and the one by his brother, a new kinship network
of strong ties had emerged that would prove to be of great importance for the banking
business of this generation.
The Amsterdam Königswarter family opened another banking house in Paris in 1838. The
Bischoffheims were also busy founding new banks and eventually had offices in Frankfurt,
Amsterdam, Antwerp, Brussels and Paris and in London from 1846 on. They thus kept up
widespread and manifold business connections.28 The scale of their financial operations was
on par with that of the Rothschild family in that period.
The international bankers in Amsterdam operated in an economic niche as they ‘concentrated
on bill brokering and securities trading. The prevailing interest rate differentials created
opportunities for a booming arbitrage trade. The gap between short and long rates within the
Netherlands and the low short rates in Amsterdam compared to various other European cities
26
C. Grange, ‘Les réseaux matrimoniaux intra-confessionnels de la haute bourgeoisie juive à Paris à la fin du
XIXe siècle’, Annales de Démographie Historique, (2005) p. 150.
27
S. De Schaepdrijver, Elites for the capital? Foreign Migration to mid-nineteenth century Brussels
(Amsterdam, 1990), pp. 82-83.
28
B.S. Chlepner, ‘L’ étranger dans l’histoire économique de la Belgique’, Revue de l’Institut de Sociologie, 11
(1931) p.725; A. Allfrey, The Goldschmidts (Frome, Somerset, 1996).

8
was wide enough to generate substantial profits for international financial specialists. Having
a branch in Amsterdam enabled these international houses to use the cheap and easy lombards
and the comparatively low discount rates there for underpinning their network operations’.29
For these activities, they were able to borrow money from the Nederlandsche Bank. However,
this comparative advantage did not last, as from 1850 on European interest rates converged
and therefore profit margins almost diminished.30 On the other hand, it is likely that the
business relations and activities of both Julius and Henri were much wider. Julius
Königswarter was an active member of a stockbroker’s club with Bischoffsheim as president.
The club was successful in opening up the security trade and functioned as a meeting place
for Amsterdam financial brokers of which both Jews and Gentiles were members.31 When
railways became a booming business in the first half of the nineteenth century, Jewish bankers
played an active role with their participation in the foundation of many railway companies all
over Europe.32 The Jewish bankers in Amsterdam showed interest as well. For instance,
Bischoffsheim and Königswarter were among the largest buyers of stock when the
Hollandsche IJzeren Spoorweg Maatschappij begun its business in 1837.33 Bischoffsheim was
involved in a railway company and a textile factory run by Jewish entrepreneurs and personal
friends in the eastern part of the Netherlands where a large part of the Dutch textile industry
was located.34

5. FOUR SONS AND A DAUGHTER, AND LOCAL FRIENDS

29
J. Jonker, Merchants, Bankers, Middlemen, p. 250.
30
ibid, p. 251.
31
ibid, p. 250.
32
K. Grunwald, ‘Europe’s Railways and Jewish Enterprise’, Leo Baeck Institute Year Book, 12 (1967) pp. 163-
209.
33
W. van den Broeke, Financiën en financiers van de Nederlandse spoorwegen 1837-1890. (Zwolle, 1985), pp.
188-190.
34
R.A. Burgers, 100 jaar G. en H. Salomson. Kooplieden-Entrepreneurs, Fabrikanten en Directeuren van de
Koninklijke Stoomweverij te Nijverdlal
, (Groningen 1954).

9
When the family arrived in Amsterdam, three sons had already been born: Louis, Maximilian
and Wilhelm; Henri (Heinrich or Hendrik) and his younger sister Therese were born in
Amsterdam. Louis studied law and became part of a small group of Jewish students in
Amsterdam. Both Louis (in 1835) and Maximilian (1843) would leave for Paris. In the French
capital, Louis lived as a prosperous private person (but sometimes acted as a stockbroker) and
would become a legal historian, whereas Maximilian started to work at the French branch of
the family bank.35 At the same time, he also fostered political ambitions and in 1851, he won a
seat in the French Parliament where he became a strong defender of Napoleon III for a time.
Both Henri and Therese would ensure the continuation of the banking house in Amsterdam.
Henri followed his father’s footsteps; Therese would marry Abraham Jacob Machiels, the son
of a wealthy local Jewish stockbroker, and her husband would become co-director of the
bank.
The family befriended several members of the local Jewish high society. The Jewish Assers, a
family of lawyers, became good friends, so did members of the Machiels family. The gossipy
diaries of the young Jetje Asser and the one by her more restraint elder brother Eduard offer
glimpses of domestic life of the Jewish elite in Amsterdam at that time.36 It must have been a
very small world indeed, as the names Jetje mentioned in her diaries always belong to the
same small circle. For instance, the diaries tell that Eduard Asser unhappily and
unsuccessfully fell in love with Julie Machiels, a sister of Abraham Jacob, the future husband
of Therese Königswarter. Jetje’s descriptions of the Königswarters at home paints a picture of
a wealthy cosmopolitan family, already travelling to and from Paris, who held well-organised
dinners and parties, and hosted occasional music evenings. This picture of family life did not
change much with the next generation of Henri and his wife Frederike in the early 1850s.37
In 1796, the Emancipation enactment gave Jews the same legal status as non-Jews in the
Netherlands. This equal legal status as citizens, however, did not always imply that
established clubs and societies admitted Jews as member. The Königswarter had the same
experience. After long deliberations, a fraternity club of law students decided not to accept
Louis as member because he was a Jew.38 The society Felix Meritis held the most important
music performances at that time. However, it did not allow Jews to become a member and
therefore Henri Königswarter invited the foreign musicians and opera singers to perform in
Frederike´s salon for guests and friends. The scarce information available suggests that the

35
L. Bamberger, Erinnerungen (Berlin, 1899), p. 285.
36
I.H. van Eeghen, Uit Amsterdamse dagboeken, de jeugd van Netje en Eduard Asser (Amsterdam, 1964).
37
H.G.P. Quack, Uit den kring der gemeenschap (Amsterdam,1899), pp. 254-256.
38
I.H. van Eeghen, Uit Amsterdamse dagboeken, p. 202.

10
family took an active part in the small world of Jewish high society in Amsterdam. According
to Jonker: ‘The international bankers in Amsterdam were respected by the mercantile-
financial community, but socialising between Jews and Gentiles went as far as business
requested it to go’.39 This social exclusion lasted at least until the end of the nineteenth
century. As modern immigrants inevitable do, the family adapted to local circumstances but
not in every aspect of their lives. Jetje Asser informs us, for instance, about a German private
teacher as educator of the young Königswarter children.40 A telling detail is the presence of
female domestics of German origin during the period when Henri and his wife inhabited the
canal house. We might assume that Henri spoke Dutch well enough, but his wife migrated
directly from Germany when she married him and she might have experienced difficulties
ordering Dutch servants and therefore preferred German domestics instead.

6. CREATING NETWORKS

In the nineteenth century, private banking houses were usually rather small, except may be the
offices of the Rothschilds and some others. The firm J. Königswarter & Co. was located in the
same house as where the family lived. Apart from competence, sheer hard work and, of
course, good fortune as knowing the right information at the right time, above all having a
network of fellow bankers and entrepreneurs, was the key element to success. The personal
contacts maintained by the bankers were thus of eminent importance and an apprenticeship in
a banking house, sometimes abroad, was often a first step to create them.
The value of these relations also depended on the content of information passed, the quality of
the goods and services delivered and, perhaps above all, on the mutual expectations leading to
trustful connections of the actors involved.41 Speaking of merchants in English ports and
abroad in the early nineteenth century, Chapman formulates these problems as follows: ‘So
long as communication between trading centres continued to be slow and uncertain, the only
way in which merchants could repose confidence in their correspondents’ discretionary
decision-making was to employ members of their families, or, failing that, the ‘extended
family’ or co-religionists’.42 To put it in economic terms: co-operation between members of
one’s own family increases trust and therefore lowers the transaction costs. To translate

39
J. Jonker, Merchants, Bankers, Middlemen, pp. 250-51.
40
I.H. van Eeghen, Uit Amsterdamse dagboeken, p. 67.
41
H. Aldrich and C. Zimmer, ‘Entrepreneurship through social Networks’, in D.L. Sexton and R.W. Smilor
(eds.), The Art and Science of Entrepreneurship (Cambridge, Mass., 1986), p. 11.
42
S. Chapman, Merchant Enterprise in Britain. From the Industrial Revolution to World War I (Cambridge,
1992), p. 93.

11
Chapman’s formulation, the strong ties are central. However, he does not pay attention to the
weak ties.
Early nineteenth-century bankers faced the same difficulties as the English merchants
Chapman described. Cooperation within such a network of weak ties functioned at its best
with participants who had the same religious background and people who had at least one
language in common. Almost all German-Jewish bankers spoke either German or French or
both and both languages functioned as a lingua franca in this period. J. Königswarter & Co.
used the same languages and when Wertheim stayed there, he had to deal with large amounts
of both French and German correspondence.43 Another benefit of participating in a network of
weak ties is the opportunity for gathering useful information. The fortune of the Rothschilds
was at least partly due to their early excellent network of foreign correspondents that gave
them an advantage over later arrivals on the financial markets, using their weak ties to great
benefit. Others bankers presumably copied these information networks and later on the
telegraph became an important instrument for long-distance communication. As railway lines
expanded travel became easier. From several biographical studies of bankers, we can infer
how much business travel was going on in the 1850s, helping to widen international contacts
while old relations were renewed.
However, the great advantage of the information network of the Rothschilds over other
bankers might have been only temporarily. ‘It appears,’ James Rothschild already complained
in 1851, ‘that yesterday a great many German scoundrels sold [French] railway shares in
London with the telegraph. Since the telegraph became available, people work much more.
Every day at noon they send a despatch, even for trivial deals, and realise [their profit] before
the bourse closes the same day’.44 Another strategy was the founding of new banks or creating
international syndicates for loans, which was an instrument of sharing the financial risks. In
this respect, the Rothschilds were extremely successful by creating satellite banks with
employees who learnt their business in one of the Rothschild offices and whose loyalty to the
banking business of the family remained solid. In Amsterdam, Becker & Fuld became such a
satellite bank house.

7. ALL IN THE FAMILY

Intermarriage within the group of already strongly intertwined international bankers was
another strategy to guarantee cooperation and trust, and these marriages made it possible not

43
H.P.G. Quack, Uit den kring, p. 255.
44
cited in N. Ferguson, The World’s Banker, pp. 573-574.

12
only to keep capital within the family but also to keep their financial partners abroad in line.
Together with apprenticeships, the marriages created a network of strong ties. Such extensive
kinship network was usually the starting point of the foundation of new banking houses
abroad. However, they were no guarantee for the avoidance of any misfortune. A family
member and business partner could turn out be untrustworthy or the sudden death of an
important linker might weaken or even put a total end to such a cooperative network.
Referring to a non- European context Lydon shows that the unforeseen death of four central
Tikna traders in a Trans-Saharan network in the 1850s caused the falling apart of that
particular trader network.45
Cassis makes a helpful tripartite classification of the marriages of the Jewish bankers in
London in the period 1890-1914.46 At the firm’s level, there were the marriages to a daughter
of a partner; secondly, there were marriages between English-Jewish families not necessarily
engaged in banking or finance; and at the third level, there were international marriages with
the possibility of staying within the same family. Among the Rothschilds, the percentage of
marriages between cousins was relatively high. But it seems likely that the Rothschilds were
the only banking family who had such an explicit strategy of endogamy and these marriages
always followed the male line of the descendants and hence the continuation of the separate
banking houses was guaranteed.47 Cassis points to another group in the City, bankers with a
Quaker background who through marriages were even more closely-knit.48 So were the
successful Amsterdam Mennonites, another group who had experienced exclusion from
public positions for centuries. They became involved in banking at the end of the nineteenth
century. Intermarriage within a group of entrepreneurs was a widespread phenomenon in
nineteenth century Europe and the Jewish bankers formed no exception in this respect.
The Königswarters in Amsterdam also married several partners within the family. Louis and
Maximilian married a first cousin, while Henri would marry a granddaughter of Simon.49
Only Wilhelm married an outsider as he took a daughter of the banker Meyer in Hanover as
his wife. Little information about him is available, but he seems to have been quite wealthy as
he was able to buy the glamorous country house Middeloo outside Amsterdam.50 In the Public
Records of Amsterdam, he always registered himself as a person of independent means. These

45
G. Lydon, On Trans-Saharan Trails. Islamic Law, Tradenetworks, and cross-cultural exchange in nineteenth-
century Western Africa (Cambridge 2009), pp. 160-205.
46
Y. Cassis, City Bankers 1890-1914 (Cambridge, 1994), pp. 214-17.
47
A. Kuper, ‘Fraternity and Endogamy. The House of Rothschild’, SocialAnthropology, 9 (2001) pp. 279-280.
48
Y. Cassis, City Bankers, p. 210.
49
C. Grange, ‘Les réseaux’, p. 141.
50
J. Morren, and J.J. Dhondt, ‘De buitenplaats Middeloo in Driehuis’, Velisena, 11 (2002) pp. 17-30.

13
marriages followed the patterns of traditional Jewish marriages between cousins, uncles and
nieces. Multiple marriages between two families where pairs of brothers married pairs of
sisters were no rarity either, as was already shown with the two Bischoffsheim brothers.51 The
marriage of Therese probably followed the strategy of strengthening an existing business
relation by a marriage of the children of two business partners. In 1844, Therese would marry
the son of a wealthy local stockbroker Abraham Jacob Machiels and her husband would
become deputy manager in January 1845.52 Without doubt, these two events are correlated,
but no evidence has been discovered how transactions between the two families went or
whether the nomination as co-banker was part of the dowry negotiations.
Success in financial operations is also depended strongly on the personality of the banker, his
entrepreneurial skills and his social capital obtained in the course of his career. In the 1880s
and 1890s, A.C. Wertheim became the leading personality of the banking house Wertheim &
Gompertz in Amsterdam.53 Wertheim’s uncle Abraham Wertheim together with Leon
Gompertz, a German cousin of Abraham Wertheim, founded the banking house. Originally,
the two men operated mainly as stockbrokers with good financial connections to the
internationally operating banking house J. Königswarter & Co., where Wertheim had spent
his own apprenticeship in the 1840s. As financial broker, he made many contributions to the
Dutch economy and the Amsterdam economy in particular crossing in his business life the
ethnic divide, but less so in his social and cultural life. Because of his directorships in joint-
stock companies, he had also multiple connections with Dutch business life as a whole.54
However, his son and successor did not reproduce A.C. Wertheim’s reputation as a creative
banker and Wertheim & Gompertz declined into a decent but hardly influential banking
house.
In the end, success of these banks remained precarious because solving the problem of
continuity was far from easy, as is the case with all family businesses, past and present, and
there are no conclusive strategies to guarantee success over several generations. Competent
sons, sons-in-law or cousins were sometimes in short supply, as even the Rothschilds
occasionally experienced, and many private banks went broke after one or two generations.
For instance, the firm Markus Königswarter vanished in 1877, as there was no successor in
the family. Others lost their international prestige because of the disappointing performances
of a successor. Successful banking dynasties like the (Berlin), the Rothschilds (London, Paris
51
W.E. Mosse, The German-Jewish economic elite 1820-1935. A socio-cultural profile (Oxford, 1989), pp. 164-
181.
52
Notary Fabius, 23 Jan. 1845, nr 25. Notarial Archives, GA, Amsterdam.
53
A.C Rijxman, A.C. Wertheim.
54
H. Schijf, Netwerken, p. 112.

14
and Vienna) and the Warburgs (Hamburg) were, in this respect, very lucky families, whereas
the Bleichröder family in Berlin was not as fortunate with its successors.55 Jonathan Raphael
Bisschoffsheim’s son Ferdinand was ‘more gifted as a bon viveur than a banker’.56 In most
family banks, primogeniture was the rule. However, Julius Königswarter allowed his eldest
son to study law and it is unlikely that Louis ever took part in the banking house, although he
operated as private stockbroker for several years in Paris. It was the youngest son Henri who
would become his successor.
Apart from internal complications with succession, there was a decisive external factor. In the
second half of the nineteenth century, capital became more concentrated because new larger
joint-stock banks took over many of the financial activities, particularly in Germany.57
Because of this profound change within the financial world, only a few of the private banking
houses kept their prominence, while others became modest local banks and quite a number
merged with the new large joint-stock banks. This explains why a relatively large number of
Jewish bankers were members of the Boards of Directors of these banks in Germany in the
1910s and 1920s. The consequence of this new form of banking was that a new kind of
network, created through interlocking directorships, replaced the network of strong ties based
on kinship networks.58 In The Netherlands, somewhat later than in Germany, joint-stock bank
started to dominate the financial world as well.

8. LEAVING AMSTERDAM

When Henri Königswarter left for Paris in 1858, Abraham Jacob Machiels and his family
stayed behind, but eventually, after dissolving the Amsterdam bank, they too would leave for
Paris in 1862. In 1848, Machiels had bought his beautiful house Herengracht 388, just around
the corner of where the Königswarter’s residence was located, and sold it in 1862 and left
with his family for Paris in the same year. In 1861, the Bischoffheims left Amsterdam for
good; he already started to live in Paris around 1845, although he still kept an office in
Amsterdam. In Paris he became a co-founder of the still existing bank Paribas (Banque de
Paris et de Pays-Bas). The reasons for leaving Amsterdam were obvious: Brussels and Paris
offered a more attractive life-style and better opportunities for financial success than
Amsterdam that was no longer a dynamic financial market, as competition from other and

55
D. Landes, ‘Bleichröders and Rothschilds: The Problem of Continuity in the Family Firm,’ in C.E. Rosenberg
(eds.), The Family in History, (Philadelphia, 1975) pp. @@.
56
A. Allfrey, The Goldschmidts, p. 101
57
H. Berghoff and I. Köhler, ‘Redesigning a class of its own: social and human capital formation in the German
banking elite, 1870-1990’, Financial History Review 14 (2007), pp. 63-87.
58
H. Schijf, Netwerken.

15
newer financial centres, Berlin, London and Paris, increased and started to dominate European
financial markets. However, for Henri Königswarter there might have been an important
additional reason. In 1856, he and his partners made a request for the founding of a new bank
based on the principles of the Crédit Mobilier. According to these principles, industrial
enterprises financed their founding and investments by selling shares. The bank required an
enormous capital according to the standards of Dutch economic life at that time. Advised by
the president-director of the Nederlandsche Bank, the Minister of Finance rejected the
request.59 According to the memo, the proposed bank looked very similar to French Crédit
Mobilier banks and these had a very bad reputation indeed. A second objection was that
foreigners outside The Netherlands would control the bank. This second point shows that the
president-director was fully aware how the international Jewish bankers operated. Henri
might have been so disappointed with the rejection that he decided to leave Amsterdam. The
newly arrived Königswarters became part of Jewish High Society in Paris, but Henri did not
continue in the banking business, as he became Envoy of the Duke of Sachsen-Coburg-Gotha;
a position he already held in Amsterdam.60 There he and his brother-in-law held several
positions as Representative or consulships (‘gezant’ is the Dutch word) for German
Sovereigns in Amsterdam. In Paris, the reunion of the family did not create a new sense of
bonding between family members and relations remained strained, as Maximilian´s will
suggests.61
On 16 April 1845, the banker and stockbroker Julius Jonas Königswarter died at the age of 61
years. His family buried him at the German-Jewish cemetery in Muiderberg, a small town
nearby Amsterdam, alongside the tomb of his wife, buried there twenty-three years earlier
after dying from childbirth at the age of twenty-nine. The still existing Ashkenazi cemetery
dates back to 1642. In that time, the city authorities did not allow Jews to bury their deaths
within the border of the City of Amsterdam. The graves of the couple’s four sons and
daughter, however, are located at the Jewish section of the Paris cemetery of Montmartre. The
fact that members of the family buried their death at two different locations is an indication of
the European orientation of this German Jewish banking family.

9. CONCLUSIONS

59
The full text of the advice has been published in H.M. Hirschfeld, Het ontstaan van het moderne bankwezen in
Nederland (Rotterdam,1922), pp.118-124.
60
Ernst II, Aus meinem Leben und meiner Zeit, Volume III, (1899), p. 270, 412.
61
Personal communication by Cyril Grange, 19 Jan. 2004.

16
Julius Königswarter and his brothers acted as elite migrants and their migration patterns were
like other nineteenth-century banking dynasties, merchants and industrialists. Many followed
the principle of chain migration as the case of the two Königswarter brothers in Amsterdam
shows. New opportunities and the aspiration to expand their business abroad were principle
pull factors for their departure from Germany. With going abroad, the family also to spread
their business risks by creating an international kinship network and to profit from the
comparative advantages. With other Jewish bankers of German descent, they shared history,
identity and language, as was the case with several other bankers in Amsterdam.
The rise of the national state and new legislation improved the educational standards and
requirements of schooling and it became easier for Jews to pursue an academic study,
although for a long period after the Emancipation they focused on their traditional businesses.
From the 1880s onward, we see a steady increase in the number of Jews who opted for
professions like doctors and lawyers all across Europe. For bankers’ sons the necessity and
pressure to follow their father’s example lessened, and with the outbreak of World War I,
many of the international networks of Jewish bankers disappeared for good, although not
abruptly.
The German-Jewish bankers who started in Amsterdam with their specialization in exchange
business did more or less the same. The margin of profit in these dealings might have been
small, it required international contacts and up-to-date information and the Jewish bankers
possessed both. As Diaspora bankers, they were successful financial operators but they were
not unique in this respect. Throughout history, many trading minorities have existed who
acted in much the same way. In the early nineteenth century, for instance, Greek Diaspora
bankers of Constantinople dominated Ottoman finance because they were familiar both with
local financial practices - institutionalised bribery - and with the more Western formal
banking rules. After 1863, their dominance as financial intermediaries gradually eroded by the
rise of Western banking and Constantinople became part of the expanding nexus of
international finance.62
In the nineteenth century, Jewish bankers created international networks in ways that
resemble those of seventeenth century Jewish diasporas as the Sephardic Jewry in Amsterdam
shows: through closely-knit kinship networks, international marriages and the choice of
business partners abroad with whom they at least shared the same religious and cultural

62
I. Pepelasis Minoglou, ‘Ethnic minority Groups in international Banking: Greek diaspora bankers of
Constantinople and Ottoman state finances, c. 1840-81’, Financial History Review, 9 (2002) p. 126

17
background.63 The Jewish bankers transplanted parts of their networks, meaning that networks
already in existence in the homeland moved with them to the host country, helping and
restraining the new immigrants at the same time. International marriages, which, in fact, were
to a large extent marriages between families back in Germany, strengthened the networks
further. In a way, local and regional networks transformed into international ones and
therefore intertwined at all levels.
An outline of the strong and weak ties of the Königswarter family in Amsterdam can be
sketched that. However, the sketched network is far from complete due to a lack of data as
was explained in the introduction. For Julius his brothers abroad were the strongest ties in his
personal and business network (see Figure 1) and that was also the case with his sons, as three
of them married within the family. Locally, with the marriage of his daughter and a local
stockbroker a new strong tie came into existence. Amsterdam friends, as the Asser family,
introduced the family in Jewish high society and it is likely they provided new local
information, clients and social capital. Nethertheless, most of their social life was confined to
the Jewish world. Through business associations, Julius Königswarter stood also in contact
with the Bischoffsheim bank. In the associations both Jewish and Gentile stockbrokers
participated, an example that business life was certainly not restricted to a Jewish clientele
alone. Both Henri and his brother-in-law represented several German Sovereigns in
Amsterdam. These honorary posts at least suggest that the next generation was known and
valued abroad. Of course, these posts contributed to their social capital as well.
It is very hard to say how successfully the Königswarter banking house acted, compared to
other Jewish and Gentile banking houses, but failure was certainly not a reason to leave
Amsterdam. Henri’s plan for a modern Crédit Mobilier might have been overambitious; it
also shows his eagerness to engage in modern developments within the banking business. It
took another decade before new bankers introduced comparable plans again, with their
founding of several joint-stock banks.
The emphasis in much research on trading Diasporas and financial minorities lies on the
strong ties within the group, usually created through (arranged) marriages. This article offers
examples of these marriage patterns among Jewish bankers. At a time when merchant and
banking houses were almost exclusively family firms these marriage patterns can, however,
also be found in many other groups, as the Mennonites in Amsterdam or the Quakers in
London show. ‘But the existence of networks of special relationships, in which professional

63
D.M. Swetschinski, ‘Kinship and Commerce: the Foundation of Portuguese Jewish Life in Seventeenth-
century Holland’, Studia Rosenthaliana 15 (1981) pp. 2-74.

18
and family ties intermingled to varying degrees, was far from limited to the religious
minorities,’ as Cassis puts it.64
On the other hand, research has usually paid little attention to the existence of weak ties
bridging several tightly knitted groups that provide all kinds of information and hence offer
new business opportunities. This lack of attention is partly due to a lack of detailed records
concerning financial transaction, as is the case with the Königswarter’s banking houses in
Europe. However, underexposing these weak ties might lead to overemphasising the
importance of kinship networks in running a business. The global strong ties within the family
had multiple functions and represented both personal and business functions. Because of their
spatial arrangements, they undoubtedly provided information from the various financial
centres where family members dwelled as well. Throughout the article the term ‘Jewish
bankers’ has been used, but does Jewishness explain their practices as bankers? Two aspects
are of importance: their position as Jews in a society, both as seen by themselves and defined
by others and the Jewish religion as such. Jewish bankers had a different past from Gentile
bankers - which certainly explains the origin of many Jewish bankers - but it is unlikely that
they differed in their use of networks or their overall business strategies from bankers with
other denominations in the nineteenth century. Trust, information and social capital have
always been key elements in the relationship between a banker and his clients. However,
compared to local Gentile bankers they had a better and more expansive international network
at their disposal, which explains at least part of their success. The Jewish bankers almost
never had an exclusive Jewish clientele and numerous examples indicate that they co-operated
with non-Jewish bankers in the financing of railways, the foundation of industrial enterprises
or new banks. It also would be wrong to think that belonging to the same religious group
implies that there is no competition or animosity at the individual level. Commercial
communities are, of course, never fully homogeneous in every respect.
The meaning of the Jewish religion for the bankers other than at the individual level is
difficult to discuss. Some were pious Jews, some were less so, some were not religious at all,
and still others converted to Christianity. The conclusion might be that it was not necessarily
intrinsic Jewish values that mattered, but social circumstances, exclusion from certain
professions among others, that interacted with the economic experiences that were part of the
past of Jewish Diasporas in several European countries. In their strategies, however, they
hardly differed from other trading minorities in other social circumstances. Trading
minorities, as economic agents, actively react to the situation in which they live, while
64
Cassis, Capitals of Capital, p. 39

19
creating global and local connections to make a profit. As immigrants with a specific
profession, Jewish bankers preferred the capitals of capital. In Amsterdam, the Königswarters
and Bischoffsheims were in a position to leave when they thought there were better social and
financial opportunities in Paris, a rising capital of capital.
Referring to nineteenth century Islamic Trans-Saharan traders Lydon states: ‘Cooperative
behaviour between members of a trade network was enhanced by a sense of belonging to a
trading family and to a community of co-religionaries.’65 Belonging to a banking family and
choosing co-religionaries as partners is a phenomenon we have also seen with the Jewish
bankers. Indeed, these principles are universal and today these strategies are still as important
as ever for migrants starting their own business in a favourable niche within the new
economy. The European bankers were no long-distance traders of cargo, but dealers of
abstract commodities: money and information while using their global and local social capital.
In this respect, they initiated as nineteenth-century representative aspects of the modern global
world economy. The conclusion should be that Jewish bankers followed the same principles
that many other ethnic minority groups have followed before and afterwards.

65
G. Lydon, On Trans-Saharan trails, pp. 342-348.

20
Figure 1 Networks of strong ties of two first generations in the 1820s: Rothschild (thick
lines) and Königswarter (thin lines)

21