Friday, June 7, 2013

Why the Belmont Is Named for a Rothschild Banking Agent

Tomorrow's race is the 40th anniversary of Secretariat's 31-length, world record time mile-and-a-half.
From Bloomberg Echoes:
On Saturday, many Americans will tune in for the 145th running of the Belmont Stakes, the final and most grueling leg of the Triple Crown. Few of us, however, know that the namesake of the race, August Belmont, was a dominant financial figure of the 19th century.

Belmont began his career as an agent for the Rothschild banking house. He was first assigned the Cuban portfolio. As he left Europe off for his posting in 1837, he stopped in the U.S., which was in the midst of a major financial panic and where the Rothschilds’ operations were in disarray. He quickly declared the U.S. his new base of operations.

Belmont (and the Rothschild banking house with him) made a killing in the subsequent recovery, particularly in the cotton and tobacco booms, and he consistently aligned himself with the Democrats, who backed the interests of cotton producers in the South. In 1860, Belmont managed the unsuccessful presidential campaign of the Democratic candidate, Stephen Douglas, who seemed to offer the best chance of preventing the Civil War and thus keep profits flowing.

Still, once war was declared, Belmont saw that the Confederacy, or the “cotton states” as he described them, was a bad bet. Cotton was valuable, and the Confederacy could win, but the rebels’ financial infrastructure was so undeveloped and untrustworthy that even victory would be bad for business. Belmont rebuffed a request from the Confederate President Jefferson Davis for a $50 million loan. Four Southern states had repudiated their debts to the Rothschild banking house in the antebellum period.

Reckless Politicians
“Under the leadership of the most reckless and unprincipled set of politicians,” Belmont said in 1863, on the eve of the battle of Gettysburg, “the new Confederacy has no principle of vitality in her and is sure to fall to pieces again.”

Belmont was more bullish on the Union. “The knowledge that the war is to be prosecuted with energy and vigor has inspired confidence and stocks have improved,” he said. In the summer of 1861, Belmont traveled to Europe as an unofficial representative of the U.S. government at the behest of President Abraham Lincoln and Secretary of State William Seward. Belmont couldn’t convince the Rothschilds to buy Union bonds, but he was able to convince them that the Confederacy would be a bad investment....MORE 
There have been four faster 1 1/2's, all on the turf, with two of them coming this year. Secretariat's run in the dirt will probably stand for another forty years.