Isidor Gerstenberg (1821-1876) 1 Founder of the Council of Foreign Bondholders
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Isidor Gerstenberg (1821-1876) 1 Founder of the Council of Foreign Bondholders By Alexander Behr ISIDOR GERSTENBERG was the Founder and firstPresident of the Council of Foreign Bondholders whose principal object is the protection of the interests of holders of foreign Government, State orMunicipal obligations issued in this country. This organisation developed greatly after his death and has become an institution of national importance. The vast field of its activities and undertakings, and the scope of its achievements can be gauged from the fact that the Council has been concerned in the settlement of debts aggregating over ?1,000,000,000. Similar institutions have been set up in Belgium, France, the Netherlands, Sweden, Switzerland and in the United States of America under Government auspices. Before the formation of the Council defaults were dealt with by ad hoc committees of the Stock Exchange, but their efforts ?fter proved inadequate and they were not sufficiently influential to bring pressure to bear on foreign governments which had failed to meet their obligations to pay capital or interest. The formation of the Council was therefore a turning point in the history of finance in this country. Isidor Gerstenberg has been practically forgotten and his name does not appear in encyclopaedias or other books of reference. The omission has been partly repaired by Mr. Emden in his volume of biographies,2 by Mr. A. M. Hyamson in the list of Anglo-Jewish notabilities3 and, by Lucien Wolf who mentioned him in his listof Worthies,4 merely stating that he was a financier, and byMr. David Footman in his recent biography of Ferdinand Lassalle,5 in which there is a passing reference to Gerstenberg. My own interest dates from 1913 when I found that he was a school-friend of Ferdinand Lassalle and I linked them up in an article.6 I am now relating the story of his life for the first time. Isidor Gerstenberg was born in Breslau, Germany, on the 18th October, 1821, the fourth child of Abraham Gerstenberg who came from Piontek, a townlet in Russian Poland, where his father was a teacher in a Jewish elementary school and whose birth is traced to 1767. Abraham Gerstenberg appears to have made a comfortable livelihood from the sale of lottery tickets and managed to maintain his large family consisting of five children and supported his step-brother Louis as well as his step-sisters of his father's second marriage. We are indebted for much of the information concerning the Gerstenberg family to Louis Gerstenberg who wrote the story of his life,7 in order, as he points out, to acquaint his children with their origin. In this he pays a handsome tribute to his step-brother Abraham whom he describes as a man of noble character, pious in his religion and endowed with a generous heart, qualities which Isidor appears 1 Paper read before the JewishHistorical Society of England on 7th February, 1951. 2 Paul H. 3 Jews ofBritain, by Emden, (1944). "Plan of a Dictionary of Anglo-Jewish Biography, by Albert M. Hyamson, in Anglo Jewish Notabilities (1949). 4 Lucien Wolf 5 JewishWorthies, by (1888). The PrimrosePath. A life of Ferdinand Lassalle, by David Footman (Cresset Press) (1946). 8 and Alexander 7Gerstenberg Lassalle, by Behr; JewishWorld, August 6th, 1913). Autobiographyof Louis Gerstenberg(not printed) inpossession of thelate Max Andrews (Aufrichtig) his great-grandson. t 207 Jewish Historical Society of England is collaborating with JSTOR to digitize, preserve, and extend access to Transactions Jewish Historical Society of England ® www.jstor.org 208 ISIDORE GERSTENBERG (1821-1876) to have inherited. Abraham's business in lottery tickets may also have influenced the son's subsequent career in speculative finance. An interesting chapter in the fife of Isidor Gerstenberg is his friendship with Ferdinand Lasalle. Gerstenberg was then eighteen years of age and his friend three years his junior, but already possessed of the remarkable qualities which made him later the leader of German Socialism. Much of the knowledge of Lassalle's early fife we owe to his diary1 which he kept from 1840 to 1841. In this he recorded his thoughts and activities. Side by side with entries about games, boys' pranks and other triviliaties there are passages in which lofty ideas and noble thoughts are expressed which seem incredible for a mere boy of fifteen. There are entries which deal with home life as well as questions of race and religion.2 Isidor figures prominently in the diary, his "real friend" towhom Ferdinand turned in the hour of trouble, and there is a reference to him in the very first entry. The two a warm youths oftenmet, played games together, bought lottery tickets and genuine and friendship developed. Isidor was attracted by the precocious and clever Lassalle (he was then called Lassal) who appreciated his friend's character, cleverness and wit. In a rhetorical outburst Ferdinand speaks of his dream, which he says, he hardly dares to put to paper, to fight for light against the forces of darkness and for intelligence against stupidity. "Isidor should link his fate with that of his friend and with him fight and conquer," but these hopes were not realized for owing to Isidor's love affair, his uncle was career. procured for him a post inManchester, which the turning point in his When the two youths separated they took differentpaths leading into opposite directions. Gerstenberg took up finance and ended by protecting the interests of Capital whilst his friend Lassalle became a Socialist leader and championed the cause of the workers. The friendship of their youth is recalled several years afterwards, when Gerstenberg had already become a financier in London and Lassalle was making a name for himself as orator, agitator, author and Socialist leader. In a letter3which Lassalle wrote to Karl Marx, then residing in London, which, incidentally, he sent through someone as proceeding to the Exhibition of 1851, he refers to Gerstenberg whom he describes a school-friend who can be found on the Exchange. There is also a reference toGersten? berg in a letter which Marx's wife sent to Engels describing her desperate financial position in which she wrote : "My husband is approaching Gerstenberg in the City and you can imagine what thismeans to him." Karl Marx himself afterwards referred to his visit with Freiligrath, the poet, then also living in London, to Gerstenberg who handed him a sealed letter of recommendation to Adam Spielmann, the father of Sir Isidore, Sir Meyer and Marion Spielman, in Lombard Street. There are further references to Gerstenberg in a letter fromMarx to Lassalle, from 9 Grafton Terrace, Haverstock Hill, in 1859, in which Marx speaks of his desperate need of money. Lassalle replied that he too had no ready cash available and suggested Marx should draw a bill on him and negotiate it through Gerstenberg, referring to him as a broker and a school-friend of Breslau, but Marx in a sarcastic reference to Gerstenberg declined to approach him. After this digression we return toManchester where Isidor Gerstenberg arrived in 1841, following his uncle Louis, who had preceded him six years earlier, to represent 1 Lassalle's Diary. Edited by Paul Lindau (1891) (in German). 2 "The Judaism of Ferdinand Lassalle, by Alexander Behr. Jewish Review. Vol. Ill, No. 15,) September, 1912. 3 Lassalle's nachgelassene Briefe. Edited by Gustav Mayer (1921) (in German). ISIDORE GERSTENBERG (1821-1876) 209 Abraham Bauer, a textilemerchant ofHamburg, who also came to England and became a banker and merchant. Isidor was barely twenty years of age, but did not find sufficient scope for his abilities inManchester and only after a few months Bauer appointed him his resident representative in London, showing great confidence in his abilities. Fellow clerks with him in the London office, first at 40 Kings Street, Cheapside, and later at 2 Copthall Chambers, were Philip Gowa and Ellis Abraham FrankHn. The latter joined the firm as junior clerk in 1842 at ?60 per annum, on the recommendation of his fatherwho was a friend of Bauer, and afterwards became one of the original partners of Samuel Montagu and Co. He died in 1909. His youngest daughter is the present Viscountess Samuel. In 1845 Gerstenberg established himself on his own account as a general merchant atNo. 3 Copthall Buildings, Throgmorton Street, afterwards carrying on the business of merchant and exchange broker at the same address, with a private residence at 36 Noel Street, Islington. Both Gowa and Gerstenberg married daughters of their former principal Bauer. Gerstenberg was then thirty-eight years of age and resided at 2 Hercules Passage, Old Broad Street, while his bride, Bauer's younger daughter Fanny Alice, aged twenty-three, resided in Dalston, London. The marriage was registered at the Hackney Register Office in 1860, among the witnesses being Philip Gowa and his wife Juliette. The Bridegroom's father, Abraham Gerstenberg (then deceased) is described as a merchant, and the bride's father, Abraham Bauer (also deceased), as a banker. By this time Gerstenberg had already become a well known figure in the City and had been a member of the Stock Exchange since 1852. He became affluent and moved to Stockely House, Regents Park. He was particularly popular in theLondon German colonywhose charities he supported. He was aGovernor of theGerman Hospital from 1852 to 1875. He cultivated the friendship of intellectuals and was on friendly termswith the political refugees who resided in London at the time, including the poet, Ferdinand Freiligrath (1810-1876), who was employed by Huth and Co., bankers in the City, and Lothar Bucher, the publicist. Gerstenberg became a naturalized British subject in 1847.1 The formation of the Council of Foreign Bondholders, with which Gerstenberg's name is associated was beginning to take shape.