With his accent and European manners , a limp from a dueling injury and his growing collection of Old World art , the first August Belmont was a colorful fixture in elite circles . His lavish dinner balls , which stretched into the wee hours , cemented his social position , even if some in the old guard thought him a bit ostentatious . ( He is believed to be the model for Julian Beaufort , the unsympathetic , nouveau riche Jewish character in Edith Wharton ’ s The Age of Innocence .) His financial clout and social position made him influential in the Democratic Party , and he was elected the first chairman of the Democratic National Committee .
The younger August , born in 1853 , had all the markings of spoiled rich boy . He was such a rowdy and inconsistent student at Harvard that the dean repeatedly wrote his father . August Jr .’ s chief accomplishment in college appears to have been the introduction to America of spiked track shoes . When his father died in 1890 , The New York Times dismissively described August Jr . as residing primarily in the country , devoting himself to fox hunting and amateur sports .
That was an underestimation . Upon his graduation in 1875 , he joined his father ’ s investment bank , August Belmont & Company , and there he found his footing . By the time August Sr . died , the son had largely taken the reins , advising the Rothschilds on investments and raising capital from others .
He was prominent enough on Wall Street that , during the financial crisis in 1893 , The New York Times solicited his views for a front-page interview . The real measure of his power came two years later , as the crisis dragged out . By 1895 , the United States Treasury ’ s gold reserves were nearly drained by investors redeeming paper bills for gold . J . Pierpont Morgan , the nation ’ s most powerful banker , laid out a plan to President Grover Cleveland to prop up the Treasury . Morgan insisted that Belmont be part of the agreement in order to enlist the Rothschilds ’ support , and Belmont joined Morgan in the White House talks .
Together , Morgan , Belmont and the Rothschilds arranged to sell US government bonds that were used to buy gold — in effect , lending to the government so it could satisfy redemptions . That stabilized the dollar and the government and , not incidentally , yielded a tidy underwriting profit for the bankers . In this period , Belmont and Morgan were also frequent
August Belmont , Jr .’ s stables bred Man o ’ War , perhaps the most famous American Thoroughbred racehorse .
Mineola , Belmont ’ s 70-foot racing sloop , was commissioned in 1899 .
allies in fights for control of various railroads , including the Louisville & National and Northern Pacific .
Belmont lent his support to several proposed schemes to build new rail and transit lines in New York City in the late 1800s , and he held stakes in elevated transit lines in Brooklyn . But the proposed subway offered the greatest opportunity to capitalize on demand for better public transportation . Belmont seized it . In 1900 , after decades of squabbling , the city finalized a plan for the first line and put it out for bids . The city would loan the money for construction and award a 50-year franchise to the winner to operate the line .
New York Public Library Library of Congress www . MoAF . org | Winter 2021 | FINANCIAL HISTORY 19