American agent for the Rothschilds , he was not only a leading banker but played a larger civic role . He helped bail out the United States government when it was on the verge of default in 1895 ; he financed , built and ran New York City ’ s first subway ; and he constructed the Cape Cod Canal . He was a power broker in New York Democratic politics and his every move was chronicled in the press — the boardroom fights , his political string-pulling , his travels , his race horses , his yachts . He was a Master of the Universe , to use the term Tom Wolfe coined eight decades later .
But Belmont ’ s life ultimately followed a downward arc . By the time he died in 1924 at age 71 , he was struggling to keep his ventures afloat , undone by unexpected inflation and an ambitious infrastructure project that went off course . He ended up a footnote to the financial history of the Gilded Age , known best for his role as a horseman .
August Belmont , Jr .
The Forgotten Financier of the Gilded Age
By John E . Morris
The profound transformation of the American economy at the turn of the 20th century is preserved for history in family names : Carnegie , Mellon , Morgan , Rockefeller , Vanderbilt , Whitney . Industrialization and urbanization accelerated , as waves of new immigrants built
Portrait of August Belmont , Jr ., 1904 . roads and bridges and staffed factories . Railway tracks were being laid , railroads were being merged and fought over , and great monopolies were being formed in industries as diverse as oil and steel , sugar and meatpacking . Libraries , museums and universities bear witness to the family fortunes amassed in the process .
Yet the name of one the most powerful and influential figures of that age , the financier August Belmont , Jr ., is missing , and he is now largely forgotten . At the peak of his career in the 1890s and 1900s , as the
New York Public Library
Born to Banking
Belmont learned the banking trade at the knee of his immigrant father and namesake , a German Jew whose family arranged an apprenticeship for him with the Rothschilds in Frankfurt when he was a teenager in the 1820s . ( The original family name , Schönberg , meaning “ beautiful mountain ,” was changed at some point to its French equivalent .) He excelled , and the Rothschild bankers thought highly enough of him to dispatch him to Cuba in 1837 to check up on their sugar interests , which were imperiled by a civil war in Spain . When the 23-year-old changed ships in New York that May , he changed plans . The city was in the grips of a financial crisis that caused hundreds of banks and other financial firms to fail , including the Rothschilds ’ affiliate . Credit had dried up .
Sensing opportunity , Belmont sent word back to his bosses and won their approval to stay in New York and set up shop . Soon he was snapping up stocks , bonds , commodities and real estate on the cheap using the Rothschilds ’ credit , which was still honored . Within three years , he made a $ 100,000 fortune , becoming one of New York ’ s richest men . He married a daughter of Commodore Matthew Perry ( whose gunboats later forced Japan to open up to foreign trade ), giving him entrée to the upper crust of the Protestant establishment . Soon , he was attending Episcopal church .
18 FINANCIAL HISTORY | Winter 2021 | www . MoAF . org