The assertion that Nathan Mayer Rothschild, the founder of the English branch of the Rothschild family, made a fortune in the British capital markets in the days preceding the British victory at the Battle of Waterloo in 1815 is either a myth or historical fact. The various stories usually allege that the Rothschild family had carrier pigeons fly news of the victory to them in London even before the British government had any information on the battle. That timely information was supposed to have enabled N.M. Rothschild to make a lot of money in the British market.

Murray Stahl's Tales of the Greatest Investors: The Rothschilds

In fact, there weren’t any stocks trading in Britain at the time; ergo one would have had to make the money in the bond market. The facts are that the Battle of Waterloo was fought on June 18, 1815, which was a Sunday. The story, which is possibly apocryphal, is that the Rothschilds bought a kind of security called a consol, which was a British government bond that had no maturity date, meaning it was a perpetuity. They would have bought the consols in the days preceding the battle and sold them in the days subsequent to the battle to make a great deal of money. The consol with a 3% coupon was first issued in 1857, and was the only security one could have bought at the time.

The Rothschild family, for reasons that should be obvious, always disputed that story and regarded it as a legend. One of N.M. Rothschild’s descendants, Lord Victor Rothschild, published a book entitled Random Variables1, which is partly autobiographical. In this book, Lord Rothschild includes the limited data available on the prices of consols in the days preceding and following the Battle of Waterloo. He obtained the prices from a publication of the time known as the a (bonds were referred to as stocks at that time). The following table appears in the book.

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