August Belmont

From 1837 to 1842, Belmont experienced instantaneous success, serving as disbursing agent, dividend collector, and newsgatherer for the Rothschilds and their customers. The new financial house also invested in foreign exchange markets, commercial and private loans, commercial paper, and handled deposits. Belmont's European connections attracted private investment from corporations, railroads, and state and local governments.[7] In the wake of the Panic of 1837, Belmont was able to use Rothschild credit to buy up wildcat bank notes, securities, commodities, and property at severely depressed rates, sometimes as low as ten cents to the dollar. Using early modern securitization techniques, he was a pioneer on Wall Street, rapidly shifting money and commodities in complex international spirals of credit New York City had not seen before.[8] He was also considered a skilled arbitrageur, earning him the nickname "King of the Money Changers." Within three years of his arrival in the city, he had amassed a personal fortune of $100,000 ($2,684,127 in 2021), making him one of the richest men in New York and one of the three most important private bankers in the United States. He was still only twenty-six.[9]

In the later half of the 1840s, Belmont's autonomy from the Rothschilds grew, and their relationship declined somewhat. In 1847, the United States government granted Belmont & Co. the right to transfer $3 million to Mexico as part of an indemnity paid for land seized in the Mexican-American War. He handled the transaction without taking a commission, hoping to generate goodwill with the government. However, when the government sought a $5 million loan soon after, Belmont won only half the amount he had bid in syndication with Corcoran & Riggs. When he further lent the new California Territory 5 million pesos, the Rothschilds hinted they might publicly dissociate the transaction and discredit Belmont, but ultimately did not.[10] When Belmont was tasked with mentoring Alphonse James de Rothschild on a visit to America in 1849, he privately told his sister he feared he was training his replacement; Alphonse ultimately returned to Europe to lead the family's Parisian holdings.[10]

During Belmont's time abroad as a diplomat in the Netherlands, the business was operated by Charles Christmas and Erhard A. Matthiessen under the name Christmas, Matthiessen & Company.[11]

Belmont entered politics as a leading supporter of James Buchanan for president in 1852 and 1856.

Around 1849, Belmont met John Slidell, a leading member of the Democratic Party in Louisiana, through the Union Club of the City of New York.[14] By 1850, Slidell encouraged Belmont to enter politics. Belmont had voted for Democratic candidates since his naturalization in 1844, although most of his business acquaintances were nominal or active Whigs.[15]

With Slidell, Belmont backed the nomination of former United States Secretary of State James Buchanan for president in 1852, hoping to unite New York in a coalition with the South. To avoid the appearance of Southern interference, Slidell chose Belmont to manage the New York campaign.[15] At the time, New York Democrats were deeply divided into various factions over slavery, with anti-slavery "Barnburners" having bolted in 1848 to support the Free Soil Party candidacy of Martin Van Buren.[15] Throughout 1851 and the spring of 1852, Belmont and Slidell worked to rally the factions to Buchanan, including by the purchase of the New York Morning Star newspaper, but they failed to overcome favorite son William L. Marcy or Lewis Cass in the New York delegation. Efforts to unite behind Marcy or Stephen A. Douglas at the 1852 Democratic National Convention also failed; Franklin Pierce was nominated as an unexpected dark horse.[15] Belmont lent financial and political support to Pierce's campaign, bringing sustained attack from the city's Whig newspapers, which accused Belmont of using "Jew gold" from abroad to buy votes and maintaining "dual allegiance" to the Habsburg and Rothschild families.[15] Belmont demanded a retraction of at least one Tribune story, but after he was rebuffed by Horace Greeley, he enlisted the Democratic Herald and Evening Post in his defense. The journalistic war of words became known within New York City as the "Belmont affair."[15]

Pierce won the 1852 election easily and appointed Buchanan and Belmont to diplomatic posts in the United Kingdom and the Netherlands, respectively. Belmont held the title of Charges d'Affairs at The Hague from October 11, 1853, until September 26, 1854, when the position's title was changed to Minister Resident. He continued as Minister Resident until September 22, 1857.

In this role, Belmont successfully negotiated two treaties with the Dutch government: a new commercial treaty permitting American access to the Dutch East Indies in 1855 and an extradition treaty in 1857.[16]

Shortly after Pierce's election, Belmont proposed to Buchanan a plan to purchase and annex Cuba through military and diplomatic pressure on the unstable Kingdom of Spain, along with financial pressure from the Rothschilds and other European banking houses which held Spanish government bonds and could threaten the government with bankruptcy. In the letter, Belmont proposed that President-elect Pierce could, through his ministers to London and the Bourbon monarchies in Paris and Naples, create a diplomatic climate favorable to Spanish capitulation. For Naples, he recommended himself; Buchanan endorsed the plan and proposed it to Pierce, omitting Belmont's name.[17] Belmont proposed the plan again to William Marcy upon learning that Marcy would become Secretary of State, adding that he was on good terms with the lover of Maria Christina of the Two Sicilies.[17] He continued to lobby Buchanan, Marcy, and Pierce, directly and through friends, for the appointment to Naples, but it was ultimately given to Robert Dale Owen, and Belmont reluctantly accepted appointment to The Hague.

Belmont was an aggressive advocate for the annexation of Cuba, proposing a plan to pressure Spain into giving up the island which included diplomatic pressure, financial leverage, and bribery. His lobbying eventually led to the Ostend Manifesto.

En route to The Hague, Belmont visited Buchanan and Lionel de Rothschild in London and "several gentlemen of influence" in Madrid. He reported to Washington that Spain was unstable and desperate for financial relief, but also proposed rebellion in Cuba as an alternative to a direct sale, if blocked by "Castilian pride."[18] In October 1853, Belmont requested from Marcy a "secret fund of $40,000 to $50,000"[18] to bribe Spanish officials to support Cuban independence, and he opened backchannel negotiations with the Spanish Minister to The Netherlands, a personal friend who favored the sale. However, Spain–United States relations soured quickly, driven by the bellicosity of Pierre Soulé, the United States Minister to Spain, and the Spanish Revolution of 1854, which installed a government less disposed to sell Cuba. Under sustained pressure from Belmont and other expansionists, President Pierce proposed that Buchanan, Soulé, and John Y. Mason (the three leading American diplomats in Europe) deliver a report on the Belmont plan. Though Slidell proposed that Belmont participate "on account of the Rothschild influence at Madrid and Paris,"[18] he was not present at their meeting in Ostend, Belgium on October 9, 1854. Their report to Secretary Marcy, which favored an invasion of Cuba in the even that Spain refused to sell the island, became known as the Ostend Manifesto. The Manifesto was swiftly doomed by its leak to the New York Herald and the victory of Pierce's opponents in the 1854 elections.[18]

As chargé d'affaires, Belmont was tasked with negotiating a trade agreement which would allow American shipping in the Dutch East Indies; his efforts were diverted by an international incident over the arrest of American citizen and adventurer Walter M. Gibson for fomenting rebellion in the East Indies.[19] Gibson had been arrested in 1851 for conspiring with the Sultan of Djambi to overthrow Dutch authority on the island of Sumatra. After he was acquitted on a technicality, the Dutch Minister of Justice overturned the colonial court's decision and sentenced him to twelve years imprisonment. Gibson fled the East Indies for Washington, where he arrived in 1853 and appealed to the Pierce administration for protection. He also sought support in pursuing an indemnity claim against the Dutch government for his arrest and destruction of his ship.[19] Secretary Marcy and American public opinion backed Gibson.[19]

After initial resistance from the Dutch foreign ministry, the affair was inflamed in summer 1854 when Gibson, impatient with the State Department's handling of the case, arrived in The Hague personally to pursue his claims, falsely representing himself to Belmont as a special diplomatic agent appointed by Marcy.[19] Gibson's presence undermined Belmont's negotiating position and riled Dutch public opinion, which demanded he be arrested as a fugitive from justice. Belmont's position was further weakened when he left the city for the mineral baths in Bohemia, citing rheumatism. While Belmont was on leave, Gibson stole his dossier on the case and left for Paris, where he further told American minister John Y. Mason that Belmont had appointed him special attaché. Gibson in turn represented himself around Paris as Mason's first secretary, leaking stories to Horace Greeley's New York Tribune which attacked Pierce's foreign policy by suggesting that Belmont utilized his diplomatic post as a banking house and was underwriting the Russian Empire in the Crimean War.[19]

Though Marcy thereafter dropped the issue and proceeded to ignore Gibson's claims, and both Marcy and President Pierce praised Belmont's handling of the affair, the entire incident did further damage to Belmont's public reputation in the United States. In addition to the Tribune, the Democratic New York Herald (which had turned on the Pierce administration politically, as the result of a patronage dispute) joined in anti-semitic and xenophobic attacks on Belmont for the remainder of his tenure.[19]

While at The Hague, Belmont strengthened his ties to James Buchanan, maintaining an active and flattering correspondence with his fellow diplomat. As President Pierce's domestic popularity waned over his handling of the crisis in Kansas, Belmont expected Buchanan to be the next Democratic nominee and the likely President.[20] Stateside, John Slidell organized members of Congress and bankers behind Buchanan for the 1856 nomination and lobbied Buchanan to resign from his post to openly stand as a candidate. He did in March 1856 and, after a visit to Belmont at The Hague, sailed home, where he was nominated and elected president.[20] Belmont's role in the 1856 campaign was a matter of historical controversy; major accounts inaccurate imply he was in the United States, contributing thousands of dollars and planning campaign strategy. Biographer Irving Katz notes that Belmont did not return from Europe until November 1857 and, though he certainly committed money to the Buchanan campaign, no evidence exists as to an exact sum. Regardless of his exact role, he was again a subject of scrutiny and attack from the domestic press, who sought to tarnish Buchanan's image through connection to Belmont.[20]

Though Belmont hoped to receive a promotion within the diplomatic corps, Buchanan and Lewis Cass, the new Secretary of State, offered him only another four years at The Hague; he declined and resigned his post. When he arrived in the United States, he found his party embroiled in a feud between President Buchanan and Senator Stephen Douglas, who denounced the proslavery Lecompton Constitution for the Kansas Territory, which Buchanan supported. Belmont, who considered Douglas a personal friend and the likely Democratic nominee in 1860,[20] nevertheless publicly endorsed Buchanan's stance in 1858, circulating a petition which urged Congress to admit Kansas into the Union as a slave state and defending the administration against "'Black' Republicans and Know-Nothings" in an Independence Day speech at Tammany Hall.[20]

In 1858, Belmont lobbied to succeed Augustus C. Dodge as Minister to Spain, but his request was ignored by the White House, in part because Buchanan hoped to appoint John Slidell as Minister to France and felt he could not appoint both men to prominent posts. The decision has also been attributed to Belmont's role in the Ostend Manifesto, which made him unsuitable for the sensitive post.[21] The snub agitated Belmont, who broke with the administration permanently, and then broke with his wife's uncle Slidell, after Slidell refused to relay an angry letter from Belmont to the President.[20] Belmont's switch from Buchanan to Douglas drew him into the more moderate "Softshell" faction of the New York party, which favored a pluralist, democratic approach on the issue of slavery. In October 1859, he joined with Samuel J. Tilden and others to organize the Democratic Vigilant Association, a predominantly mercantile group (especially those engaged in trade with the South) to combat "atrocious disunion doctrines," including the abolition of slavery.[22]

Belmont was elected as a delegate to the 1860 Democratic National Convention. As before, Belmont's presence in the Douglas coalition drew criticism, with placards claiming "the Rothschilds have sent countless millions" to buy the presidency.[23] Even some Douglas supporters opposed Belmont, with Fernando Wood claiming that Belmont intended to betray the Senator, given his connections to Buchanan and Slidell. Belmont allayed any fears in a meeting with Douglas allies and ultimately became leader of the Douglas men in the New York delegation, a pivotal position at the convention.[23]

Belmont attended the April convention in Charleston with his family and Salomon James de Rothschild as his guest. The convention descended into chaos over the party's position on slavery, was disbanded, and was rescheduled for Baltimore six weeks later.[23] In the meantime, Belmont advised Douglas on campaign strategy and gained the candidate's support for a resolution to protect the rights of slaveholders in the territories. Belmont also funded Douglas rallies in New York City, aiming to raise funds and keep the Northern party united behind Douglas. Douglas expressed gratitude and invited Belmont to meet in Washington in advance of the Baltimore convention, where Douglas was easily nominated without Southern participation. Belmont was selected as to represent New York on the Democratic National Committee and then elevated as the Committee's chairman; he would serve in the role for over a decade.[23] Douglas biographer George F. Milton wrote, "the Committee hoped [Belmont] could smite the Manhattan rock and cause campaign funds to flow." Belmont biographer Irving Katz additionally cites Belmont's "organizing ability, his immense energy, his unswerving loyalty to the Douglas standard, and his efforts to diminish intraparty friction."[24]

Belmont is attributed with single-handedly transforming the position of party chairman from a previously honorary office to one of great political and electoral importance, creating the modern American political party's national organization.

He energetically supported the Union cause during the Civil War as a "War Democrat" (similar to former Tennessee Senator Andrew Johnson, later installed as war governor of the Union Army-occupied seceded state), conspicuously helping U.S. Representative from Missouri Francis P. Blair raise and equip the Union Army's first predominantly German-American regiment.[25][lower-alpha 2]

According to one version of events,Belmont also used his influence with European business and political leaders to support the Union cause in the Civil War, trying to dissuade the Rothschilds and other French bankers from lending funds or credit for military purchases to the Confederacy and meeting personally in London with the British prime minister, Lord Palmerston, and members of Emperor Napoleon III's French Imperial Government in Paris.[26] However, the evidence compiled by Mira Wilkins, in The History of Foreign Investment in the United States to 1914 (Cambridge, Harvard, 1989) tells another story. She writes: “A Confederacy loan, issued in London in 1863 and marketed in London and Paris, was oversubscribed” (p. 103). Young Salomon de Rothschild was in the United States in 1859–1861 and was captivated by the American South. He wrote home on April 28, 1961, urging the Rothschilds to use their influence to have the Confederacy recognized. He saw the North as totally at fault” (p. 677 n. 90). The Confederacy loan “was also taken up in Liverpool, Amsterdam, and Frankfurt. Stanley Chapman calls the loan to the Confederacy ‘perhaps the most audaciously successful loan of the century.’... John Slidell (the uncle of August Belmont's wife) arranged the Confederacy loan. John Slidell's daughter, Mathilde, married Baron Frederic Emile d’Erlanger who was involved in that loan; their son, Baron Emile Beaumont d’Erlanger would become the senior partner in Emile Erlanger & Co., London (based on a family tree in the Belmont Family Papers, Columbia University)” (677 n. 94). In New York, Belmont helped organize the Democratic Vigilant Association, which sought to promote unity by promising Southerners that New York businessmen would protect the rights of the South and keep free-soil members out of office.[27]

Remaining chairman of the Democratic National Committee after the War, Belmont presided over what he called "the most disastrous epoch in the annals of the Democratic Party".[28] As early as 1862, Belmont and Samuel Tilden bought stock in the New York World in order to mold it into a major Democratic press organ with the help of Manton M. Marble, its editor-in-chief.[29]

According to the Chicago Tribune in 1864, Belmont was buying up Southern bonds on behalf of the Rothschilds as their agent in New York because he backed the Southern cause. Seeking to capitalize on divisions in the Republican Party at the War's end, Belmont organized new party gatherings and promoted Salmon Chase (the former United States Secretary of the Treasury since 1861, and later Chief Justice of the United States in 1864) for president in 1868, the candidate he viewed least vulnerable to charges of disloyalty to the Party during the Republican/Unionists Lincoln-Johnson Administrations, (1861–69).[30]

September 1868 Thomas Nast cartoon "This is a White Man's Government!" showing left to right a stereotyped Irishman (perhaps representing the Democratic Party), an ex-Confederate soldier (Nathan B. Forrest), and a capitalist (Belmont) "triumphing" over a prostrate USCT soldier on the ground.

Horatio Seymour's electoral defeat in the 1868 election paled in comparison to the later nomination of Liberal Republican Horace Greeley's disastrous 1872 presidential campaign. In 1870, the Democratic Party faced a crisis when the Committee of Seventy emerged to cleanse the government of corruption. A riot at Tammany Hall led to the campaign to topple William M. Tweed. Belmont stood by his party.[31]

While the party chairman had originally promoted Charles Francis Adams for the nomination, Greeley's nomination implied Democratic endorsement of a candidate who as publisher of the famous nationally dominant newspaper, the New York Tribune, had often earlier referred to Democrats before, during and after the War as "slaveholders", "slave-whippers", "traitors", and "Copperheads" and accused them of "thievery, debauchery, corruption, and sin".[32]

Although the election of 1872 prompted Belmont to resign his chairmanship of the Democratic National Committee, he nevertheless continued to dabble in politics as a champion of U.S. Senator Thomas F. Bayard of Delaware for the presidency, as a fierce critic of the process granting Rutherford B. Hayes the presidency in the 1876 election, and as an advocate of "hard money" financial policies.[33]

He was an avid sportsman, and the famed Belmont Stakes thoroughbred horse race is named in his honor. It debuted at Jerome Park Racetrack, owned by Belmont's friend, Leonard Jerome (the maternal grandfather of Winston Churchill). The Belmont Stakes is part of thoroughbred horse racing's Triple Crown and takes place at Belmont Park racetrack, just outside New York City. Belmont was heavily involved in Thoroughbred horse racing. He served as the president of the National Jockey Club from 1866 to 1887 and owned the Nursery Stud (a horse-breeding farm near Babylon, New York, on Long Island), which in 1885 was replaced by a stud farm of the same name near Lexington, Kentucky.[1]