The Jews in America Trilogy

by Birmingham, Stephen;

  New York City in 1837 seems in many ways to have been waiting for a man with August Belmont’s talents and tastes to come along. Certainly it was an auspicious moment for a young man eager to make his fortune in banking to descend upon the city, and Belmont arrived with the tremendous influence and backing of the House of Rothschild behind him. The city’s mood was up; it was the beginning of the so-called Golden Era, which would see New York change from a provincial port into a giant metropolis. The War of 1812 had given the country confidence in itself, had strengthened its credit abroad (up to then the Rothschilds had considered the United States too unprofitable an enterprise to merit an American agent), and the great age of railroads had begun. The railroads opened up outlying land and carried people there. Railroads carried products back to port cities like New York where, in turn, they were traded to pay for the European imports the newly opened country needed.

  New York, by 1837, though it still resembled a steepled and gabled Dutch village sprouting from the Battery at the tip of Manhattan Island, had become the chief financial center of the nation and its major port, through which passed commerce to be financed, goods to be auctioned, and the inland producers’ bills of exchange, drawn on British merchant banks, which, to provide cash, had to be discounted. New York, until then, had stood a poor third to Boston and Philadelphia. It had remained under the influence of the Dutch, whose chief economic interests had been limited to up-Hudson furs and their own vast estates outside the city. New York had not developed the tightly knit commercial and financial power groups of the older Eastern cities. There were not, as there were in Boston, such family complexes as the Cabot-Lowell-Lawrence group, which controlled and financed textile companies, or the Lee-Higginson-Jackson alliance, which dominated the money market. New York had not assumed the rigidity of Philadelphia, with its position as the seat of the only national banks the country had ever known. New York, in other words, was ready for the private banker—Pennsylvania in 1814 had passed a law outlawing private banking—it was a city for the entrepreneur, a city flexing its muscles and feeling young and big and strong. All this August Belmont was quick to sense.

  New York was a merchant’s city. It had become the chief wheat and flour market of the nation, shipping over a billion sacks of flour a year to Europe, and dispatching the major share of the country’s cotton. It was also a gambler’s city, and the young arriving immigrants—immigration itself was one of the biggest gambles of the day—only heightened the feeling of risk and speculation that was in the air. In the modern age of consumer goods, it is hard to imagine New York as a place where, though there was a great deal of money about, there was really very little to buy. But such was the case. In the absence of goods and luxuries in shops, New Yorkers spent their money gambling—buying and selling mortgages, bonds, IOU’s and promissory notes. In 1792 the New York Stock Exchange—older even than London’s—was formed under the famous buttonwood tree at the corner of Wall Street, and in 1817 it had been formally incorporated with a set of rules which, by today’s standards, were delightfully lax, but which did require a listing of companies whose shares were being offered for trading. All over the country, people who wanted to gamble were turning to Wall Street. By the time of August Belmont’s arrival, this casual bazaar was doing a volume of hundreds of millions of dollars a year. Farmers in the new Western lands were selling mortgages to buy stocks and bonds. Small manufacturers were both investing and offering then own shares for sale. Banking, though it had never had much order or logic or even rules, had had a certain predictability. Suddenly—almost overnight, it seemed—it became fast, frantic, and speculative.

  The great pendulum pattern of boom followed by bust, which would dominate financial history for the next hundred years, had begun. The Panic of 1837, which would be followed by many more, was blamed on “the habit which all classes seem within the last few years to have contracted, of speculating beyond their means, of living beyond their income, of spending money before it was acquired, and of keeping up the appearance of men who had realized large fortunes while they were only in the act of accumulating them,” according to the Herald. Before the panic, a speculating American public had invested over a hundred million dollars in canal bonds alone. In this competitive, win-or-lose business, a new kind of bank—and a new kind of banker—was needed. August Belmont saw this. He noticed that the old names which had dominated the early note-issuing commercial banks—names such as Hamilton, Morris, and Willing—were not moving rapidly enough, or skillfully enough, into the new field.

  In the Panic of 1837 Belmont was able to perform a service which he would repeat in subsequent panics, and which helped make him a friend to bankers and to the United States Government. By negotiating large loans from the Rothschilds, he was able to shore up United States debtor banks. In other words, he was able, thanks to the hugeness of the Rothschild reservoir of capital, to start out in America operating his own Federal Reserve System.

  Socially, New York was not at all the city in 1837 that Boston, Philadelphia, or Charleston was, and here again August Belmont found a niche waiting to be filled. New York society, according to members of the Morris family, consisted only of the Morrises, of Morrisania, their enormous estate north of the city in what is now one of the dreariest sections of the East Bronx. Colonel Lewis Morris once wrote of his city: “As New England, excepting some Families, was ye scum of ye old, so the greatest part of the English in the Province [New York] is ye scum of ye New.” The Morrises were, in fact, the only New York family not “in trade.” As for the other prosperous families of the city, they were all required to work for a living. The Roosevelts, Bayards, Van Cortlandts, and Rhinelanders were in the sugar-refining business. The Rhinelanders also sold crockery, and the Schuylers were importers. The Verplancks were traders, and Clarksons and Beekmans and Van Zandts were in the retail dry-goods business. Brevoorts and Goelets were ironmongers, and the Schermerhorns were ship chandlers.

  Small, wistful newspaper advertisements of the period reveal how humbly the founding fathers of the great old New York families urged the public to buy their wares: Peter Goelet, from his shop in Hanover Street, begs customers to buy his saddles and pewter spoons and announces that he has received “a consignment of playing cards.” Jacob Astor—before he became John Jacob—offers “guitars, fifes and pianofortes” from his shop in Queen Street, while Isaac Roosevelt extols the virtues of his “loaf, lump, and strained sugar and sugar-house treacle.”

  Such social life as existed among these folk depended largely on the weather, and when it was balmy and fair, New York society sat outside their front doors on wooden benches and nodded and chatted with their neighbors across the way. Picnics in the wooded hills of mid-town Manhattan were also popular, as were boating jaunts to Brooklyn. There were hunting and fishing parties for well-connected young men on the banks of the Harlem River and, in winter, frequent skating parties for both sexes on a Hudson which, in those naïve days before pollutants, often froze from Manhattan to the New Jersey shore. When society entertained, it did so with seriousness. As Washington Irving humorously commented, “These fashionable parties were generally confined to the higher classes, or noblesse, that is to say, such as kept their own cows, and drove their own wagons. The company commonly assembled at three o’clock, and went away about six, unless it was in winter time, when the fashionable hours were a little earlier, that the ladies might get home before dark.” Social life certainly seems to have been a barren and bleak affair. As Frederika Bremer wrote, “Here, where almost every person works for a living, one cannot properly speak of a working class, but quite correctly of people of small means and somewhat limited environment and circumstances—a class which has not yet worked itself up.”

  To the people living in New York, it was something else again. Many New Yorkers actually considered themselves quite racy. In fusty Boston and austere Charleston, for instance, society never dined in public. But in New York society had discovered the restaurant, and the f
ashionable gathered at Niblo’s and Delmonico’s for dinners and even floor shows. The daring drank wine, and the less daring mixed a little wine with their milk.

  In upstate New York such old patroon families as the Van Rensselaers—Stephen Van Rensselaer in 1838 was said to have an income of a million dollars a year—made periodic excursions to their city houses, leaving their stamp on social life. The Van Rensselaers, said James Silk Buckingham, “give a great gravity and decorum to the general tone of society here. There is less of show in houses, carriages, and horses; less of ceremony and etiquette in visiting; very early hours for meals; seven for breakfast, two for dinner, and six for tea; plainer and more simple fare.” The plainness and the decorum, however, did not delight an English visitor of the period, Margaret Hunter, who wrote home after a dinner party at Mrs. Van Rensselaer’s that she found all the guests “exceedingly commonplace,” and was “amused with the motley company we meet here, Senators, lawyers, actors, editors of newspapers, one of them a Jew, all placed indiscriminately at table and all joining equally in the conversation.” Still, such as it was, it was New York society, and August Belmont determined to join it and to help it “work itself up.”

  Though there was no explicit anti-Semitism in New York at the time, it was generally considered “better”—among such families as the Roosevelts, Van Rensselaers, Goelets, and Morrises—not to be Jewish. Yet there was, at the same time, a distinct Jewish upper class, composed of families who had been in the city even longer than some of the leading gentiles.

  The first recorded Jewish settler in Manhattan was a man named Jacob Barsimson who arrived early in 1654. He was an Ashkenazic, or German, Jew. No one knows what happened to Mr. Barsimson, and his importance to history has been eclipsed by the arrival, somewhat later that same year, of twenty-three Jewish immigrants aboard the bark St. Charles, often called “the Jewish Mayflower.” The St. Charles had carried its passengers from Recife, Brazil, but actually the little band’s journey had begun thousands of miles farther away and years before in fifteenth-century Spain and Portugal. There, after the violence of the Inquisition—and, by a prophetic coincidence, in the same year that Columbus discovered the New World—the Catholic monarchs had ordered all Jews to adopt Christianity or depart the Iberian Peninsula. Those who would not convert had fled and scattered—to Italy, Turkey, Hamburg, and to various Baltic ports. Many had been drawn to the tolerant atmosphere of the Netherlands, and when the Dutch conquered Recife in 1630 and urged settlers to go to the new possession and form colonies, many Jews had migrated to South America, where they found a few years’ peace. But in 1654 Recife had been reconquered by the Portuguese, and Brazil was no longer safe for Jews. They fled once more. The St. Charles passengers were on the last stage of an exodus of the ancient Sephardic culture from medieval Spain.

  In the unwritten hierarchy of world Jewry, the Sephardim are considered, and consider themselves, the most noble of all Jews because, as a culture, they claim the longest unbroken history of unity and suffering. The arrival of twenty-three Sephardim in New Amsterdam was not auspicious. When he discovered they were penniless, Governor Peter Stuyvesant threw the lot of them in prison. There they might have stayed, but, fortunately for them, many stockholders of the Dutch West India Company were Jewish and so Stuyvesant was persuaded to release the twenty-three on the condition that “the poor among them” be no burden and “be supported by their own nation.” Within a year most had established themselves as merchants, trading in tobacco, fish, and furs, though they were not admitted as freemen until the next century. As a group, the Sephardim were proud, diligent, but an aloof and somewhat crusty people, and they were once labeled “the obstinate and immovable Jews.”

  The great Sephardic families of New York, many of them descended from the St. Charles arrivals, include the Hendrickses, the Cardozos, the Baruchs, the Lazaruses, the Nathans, the Solises, the Gomezes, the Lopezes, the Lindos, the Lombrosos, and the Seixases. By the beginning of the nineteenth century a number of the Sephardim had become quite wealthy. Old Harmon Hendricks, for instance, had a copper store in Mill Street (now South William Street) and a factory in New Jersey which was the first copper-rolling mill in the country. He died in the 1840’s, according to one report, “immensely rich, leaving over three millions of dollars” and a great deal of valuable real estate. His daughter was married to Benjamin Nathan, a stockbroker in Wall Street, and, in fact, Hendricks copper shares were considered among the blue chips of the era. In The Old Merchants of New York City, published in the 1860’s, Joseph A. Scoville reported that

  With all the revulsions [sic] in trade, the credit of the [Hendricks] house has never been questioned, either in this country or in Europe, and today in Wall Street, their obligations would sell quite as readily as government securities bearing the same rates of interest. No man stood higher in this community while he lived, and no man has left a memory more revered than Harmon Hendricks. When he died, the synagogue which he attended lost one of its best friends, and the rising generation of that numerous family could not have a better example.

  Elsewhere the Jews were regarded with a similar admiration and respect and, because they were still relatively few in number,* with curious interest. In 1817, when a watchmaker named Joseph Jonas became the first Jew to settle in Cincinnati, one report says:

  He was a curiosity at first, as many in that part of the country had never seen a Jew before. Numbers of people came from the country round about to see him, and he related in his old age of an old Quakeress who said to him, “Art thou a Jew? Thou art one of God’s chosen people. Wilt thou let me examine thee?” She turned him round and round, and at last exclaimed: “Well, thou art no different to other people.”

  In New York the Sephardic families and their temple, Shearith Israel, had a distinct and special status. Many of their men had fought on the side of the colonists in the American Revolution, and as merchants and bankers they had helped finance the war and provision and outfit its armies. Haym Solomon, who had come from Poland, worked closely with William Morris and the Continental Congress as a broker, and helped raise a particularly large sum for the Revolution. For his services he was given the official title of “Broker to the Office of Finance.” Even earlier, Jewish bankers had lent money to Lord Bellamont, a particularly improvident eighteenth-century colonial Governor of New York, helping to keep the colony financially on its feet, and New York’s first Lutheran church was built with money advanced by Jewish bankers—among them Isaac Moses, who helped establish the Bank of North America in 1781.

  But by the beginning of the nineteenth century the complexion of the Jewish community in New York had begun to change. German Jews had begun to trickle in. At first, the Germans were taken into the established Sephardic congregation, intermarried with the Sephardim, and adopted the Sephardic ritual, which had already become quite Americanized. But, as the German migration grew, it became increasingly difficult for the Sephardim to accept the Germans. As Charles Bernheimer has said, “The small Sephardic communities, in defence of their own individuality, could not, and, by reason of their hidalgo pride would not, continue to absorb the new element. On the other hand, the prominent, useful individuals of the German section felt the propriety of devoting themselves to the needs of their countrymen.” This was part of it. There was also a matter of “native American” versus “foreigner” and, more than anything, a matter of class. The Sephardim had become successful businessmen and—to their way of thinking, certainly—sophisticated and cultivated city dwellers. The Germans, on the other hand, particularly after the fall of Napoleon in 1815 and the beginning of European reaction, were for the most part poor, soiled-looking, and underfed. Most of them were arriving, like Joseph Seligman, in steerage. When they could manage the language at all, they spoke English with heavy and guttural accents. Most had had little education. They seemed uncultivated, and—because they were poor-aggressive. They were an embarrassment. The Sephardim were merchants and bankers; the Germans were goi
ng off as foot peddlers. And so by 1837 the doors of the Sephardim—and of Temple Shearith Israel—were closing to Germans. August Belmont, né Schönberg, may, with his usual acuity, have realized this also. His quick and complete apostasy—and his determination to climb into the gentile society of the Morrises and Mrs. Van Rensselaer—may be explained by the fact that the best class of Jews in New York would not have asked him to their picnics, hunts, and parties.

  The first thing New York society noticed about August Belmont was that he had lots of money. It was Rothschild money, to be sure, but he used it lavishly. As a financier with the funds of the world’s largest private bank at his fingertips, he was immediately important not only to American companies but to the United States Government, which was always running out of cash and whose credit needed constant infusions from bankers. August Belmont became a figure, both as a host and as a guest, at New York parties. He spoke some Italian, a little Spanish, a little French, and all three languages with an atrocious accent, but nobody in New York knew the difference. It was exciting to hear him drop phrases in foreign tongues, and he was admired for his handkissing “Continental manner.” (New York society regarded anything European as synonymous with elegance.) August Belmont could by no means have been considered handsome. He was short and rather stout, with iron-colored side whiskers. His features were round and Germanic, but his eyes were arresting—small, but astonishingly black and bright. Yet they were evasive eyes, which never looked directly at a person and seemed forever focused on some object in the middle distance.*

  For all this, there was something about him that caused women to have impure thoughts—a hard-to-define but vaguely titillating vulgarity. Meeting a woman, those jet-black eyes would, fall to rest upon that curve below her throat and appear to be defrocking her, crinoline by crinoline, from that point downward. At the same time, his cynical manner and harsh, bitter tongue, along with his clear reluctance to reveal his past, made him a figure of mystery and glamour. It was whispered that he had insatiable sexual appetites, and was a cruel and demanding lover. It began to be rumored that the Rothschilds “had a reason” for wanting Belmont out of Europe. To what hideous Rothschild secret was he privy? There had to be something. Why, if he was their “representative,” was his new banking house not called N. M. Rothschild & Sons rather than August Belmont & Company? The unfounded rumor started—and is still heard today—that Belmont was actually an illegitimate Rothschild son.