Monday, May 19, 2014

Great American Fortunes - August Belmont: The Grand Sachem of New York City


PHOTO by Kurz & Allison circa 1871
In 1877, Charles Dana’s New York Sun reported: “He taught New Yorkers how to eat, how to drink, how to dress, how to drive four-in-hands, how to furnish their houses, how to live generally according to the rules of the possibly somewhat effete, but unquestionably refined, society of the Old World.

August Belmont, the subject of Dana’s story, was a man who ended up in the U. S. by accident, not by design, fell in love with the country, amassed a great fortune, and changed New York forever.

 Born in Germany, Belmont attended a Jewish school, where he was considered untidy, ungovernable, rowdy, and as bullheaded as he was bright. When his father stopped paying for his tuition, Belmont landed a job with the Rothschilds, sweeping floors and polishing furniture. At night he studied French, English, and honed his writing and math skills. Ultimately Belmont became Amschel von Rothschild’s private secretary.

The Rothschilds had major interests in Cuba and sent Belmont to Havana in 1837 to analyze the impact of the Spanish civil war on the island’s economy and on their investments. En route, Belmont stopped in New York City which was in the grip of the Panic of 1837. Belmont decided to visit Rothschilds’ American agents, but discovered they had ceased to exist.

Without consulting the Rothschilds, Belmont remained in New York and took over their American interests. He began to acquire banks and bank notes at depressed prices and made a fortune for the Rothschilds. They rewarded him with a bonus, a $10,000-a-year salary, and a permanent position in the U.S.

Hot tempered, aloof, and at times disdainful, Belmont fought a duel over an insult, the bullet shattering his hip bone. The newspapers accused him of being a roué, but since duels were only fought by gentlemen, Belmont became a “gentleman” in the eyes of Knickerbocker society. The bluebloods began to crave invitations to his extravagant soirées.

 In 1844 he became a naturalized American citizen and five years later married Commodore Matthew Perry’s daughter. Having accumulated a fortune, he turned to politics, working for James K. Polk’s presidential campaign and developing strong ties with the Democratic Party. Subsequently he ran Buchanan’s campaign in New York for the Democratic presidential nomination, but supported Franklin Pierce after he won the nomination. A grateful President Pierce reciprocated by naming Belmont chargé d’affaires at The Hague.

Belmont’s rapid rise to power—by 1860 he was the chairman of the Democratic National Committee—brought about insulting attacks from the Republican press, especially Horace Greeley’s Tribune. Carl Sandburg applauded Belmont’s “anger and courage” in the face of such caustic assaults.

During the Civil War Belmont raised millions for the Union and became an adviser to President Lincoln.

Belmont sponsored a new horse race, the Belmont Stakes. The first running took place in 1867, making it the oldest of the three Triple Crown events. Belmont Park is named after him and his imprint is intertwined with the history of the Kentucky Derby. Belmont died in 1890, leaving a fortune in excess of $50 million.

 © 2008 by Daniel Alef, syndicated columnist and award-winning author of “Pale Truth,” an American historical novel. Mr. Alef can be reached at dalef@titansoffortune.com.
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