Industrial Capitalist: Jay Gould

Jay Gould was an American railroad developer and  financier,  and is recorded as the ninth richest businessman in U.S history.  Gould’s  manipulative business practices and  partnerships with Tweed, Sweeney and associations with Tammany Hall made him the  archetypal “robber baron” in his era. Gould started off as a stockbroker on Wall Street , buying stock in railways and engaging in speculative investing practices in 1859.  In 1868, Gould was elected President of Erie railroad, and during this period  formed partnerships with financiers  Daniel Drew and Jim Fisk. Gould made Drew and Fisk his allies, so that they could keep control of the Erie railroad  out of railroad tycoon, Cornelius Vanderbilt’s hands. The  struggle between these financiers,  over time would be known as the “Erie War” in which  Gould conspired with Drew and Fisk to issue fraudulent shares of Erie railroad, watering down the stock  in hopes of trapping Vanderbilt into purchasing large quantities. He issued one hundred thousand  shares of  Erie stock illegally, and attempted to bribe New York legislators to legalize his actions. Boss Tweed of Tammany Hall was made the director of Erie railroad, and in return would manipulate legislation to favor  Gould and his company. In 1869, Gould and Fisk  attempted to ” corner the gold  market” hoping that the increase in the price of gold would increase the price of wheat, causing a large amount of bread shipping to be used on his railroad lines. Gould also attempted to bribe federal government officials,  including the brother-in law of President Ulysses S. Grant in hopes of getting him to influence the President  and Secretary of State in his favor. On September 24, 1869 as a result of Gould’s gold scheme, panic ensued on Wall Street  as the price of gold began to rise drastically.  The United States Treasury  figured out Gould’s scheme by the afternoon and as a result began to sell gold on the market, driving the price back down. Gould and Fisk were able to carefully cover their tracks carefully and walk away without any criminal charges against them.  Debt  of the Erie railroad increased  as a result of Gould expanding it, and he was eventually forced out of the company. He focused his attention on the West, and used his his wealth to gain control of the Union Pacific and smaller lines in the Southwest.  By the end of his career, Gould would have control of  the Missouri Pacific Railroad, Western Union Telegraph  Company and would assist in elevated trains across New York City.  Gould died in 1882, being worth an estimated  $77 million.  He willed his remaining fortune in its entirety to his family.  To many late 19th century Americans, Gould embodied unscrupulous greed and corruption, and manipulated money and people to his own advantage.

Cartoon illustration printed  in satirical newspaper Puck, by  Keppler & Schwarzmann  portraying Jay Gould using Wall Street as a bowling alley.

Cartoon Illustration printed in satirical newspaper in 1882 by Keppler & Schwarzmann portraying Jay Gould using Wall Street as a bowling alley.

 

“That saturnine little man, concerning whom, in the opinion of the New York Herald, whatever Providence it is watches over him, it is certain that his strokes of good luck always come in when least expected and are to the great detriment of other people.  Its always other persons’ ill winds that do Mr. Gould the most good”(137).

-Meade Minnigerode– Certain Rich Men (1927)