Jay Gould

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(born May 27, 1836, Roxbury, N.Y., U.S. — died Dec. 2, 1892, New York, N.Y.) U.S. railroad executive, speculator, and robber baron. Educated in local schools, he worked as a surveyor and then operated a tannery. By 1859 he was speculating in the stocks of small railways. In 1867 he became a director of the Erie Railroad; in the following year he joined with Daniel Drew and James Fisk to prevent Cornelius Vanderbilt from buying control of the company. To this end he engaged in outrageous financial manipulations, including the issue of fraudulent stock and the payment of lavish bribes to New York state legislators to legalize the stock's sale. He and Fisk then joined forces with William Magear Tweed to profit from further stock manipulations. In 1869 they attempted to corner the gold market, causing the Black Friday panic. In 1872 public outcry forced Gould to cede control of the Erie Railroad. With a fortune of $25 million, he began buying large blocks of stock in Union Pacific Railroad Company and acquired control of that company by 1874. By 1881 he owned 15% of all U.S. rail mileage. Having made large profits by manipulating the company's stock, he pulled out of the company in 1882 and began building a new rail system southwest of St. Louis that by 1890 included half the region's rail mileage. In 1881 he gained control of Western Union Corp., and he owned the New York World newspaper from 1879 to 1883. He remained ruthless, unscrupulous, and friendless to the end.

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American financier and railroad builder Jay Gould (1836-1892) began as an unprincipled stock manipulator and became one of the most acute businessmen in America's age of industrial capitalism. He operated in an era when speculative capital could play a constructive role.

Jay Gould, christened Jayson, was born in Roxbury, N.Y., on May 27, 1836, a farmer's son. He obtained some education in a local academy and also learned surveying. Between the ages of 18 and 21 he helped prepare maps of New York's southern counties. By 21, with a stake of $5,000, he and a partner opened a leather tannery in northern Pennsylvania.

Gould then moved to New York City, where he set up as a leather merchant in 1860. Before long, however, he found his forte in Wall Street, ostensibly as a stockbroker but really as a speculator. In that period of unregulated finance Gould quickly mastered the intricacies of corporate management and of security trading and manipulation. He traded in the securities of his own companies, manipulating banks he was associated with to finance his speculations and corrupting legislators and judges. From 1867 to 1872 he was a power and a terror in Wall Street.

Erie War

In 1867 Gould was already on the board of directors of the Erie Railroad, which was in financial difficulties. He set out to control it, push its expansion westward as far as Chicago, and defeat Cornelius Vanderbilt's efforts to acquire this potential competitor. Gould was the behind-the-scenes strategist (using Daniel Drew and James Fisk as his fronts) in the "Erie war" with Vanderbilt in 1868. To check Vanderbilt, Gould issued 100,000 shares of new Erie stock by illegally converting debentures and then went to Albany, where, with the Erie's money, he bribed legislators to legalize the conversion. Vanderbilt discovered he had met his match and settled with Gould, receiving $1 million as a sweetener and leaving the Erie to Gould.

Gould launched the Erie on an expansion campaign that vastly increased its capital debt. Meanwhile, he traded in Erie stock, sold it short, and made a killing before the road went bankrupt in 1875.

Buying Gold to Sell Wheat

As part of the Erie's move westward, Gould obtained control of the Wabash, a wheat-carrying railroad. To improve the fortunes of the Wabash, Gould hit on the scheme of pushing up the price of gold, thus weakening the dollar, and thereby encouraging foreign merchants to buy more wheat.

Using Fisk's brokerage house as a cover, in the summer of 1869 Gould began buying gold secretly in the free market - hoping the U.S. Treasury would not sell - and ran the price up from 135 to 160, where it was on the "Black Friday" of Sept. 24, 1869. By that time Gould had created a short interest in gold of $200 million with only a fraction of that amount available to the short sellers. Then the U.S. Treasury, realizing it had been duped by Gould, sold gold, and the price dropped to 140 and then to 133. A panic hit Wall Street, depressing all stocks. Gould had speculated not only in gold but in stocks and lost a fortune. However, in 1871-1872 he made another.

Well-heeled again, Gould moved his operations westward into the Wabash, the Texas and Pacific, the Missouri Pacific, and the Union Pacific railroads. His operations in the last two exemplify his methods. He bought their securities when they were low during the depression of 1873, obtaining control of both; he also acquired securities of independent lines and feeder lines he wished to add the two trunk systems. Then he forced up the prices of the two amplified major companies. When the stock market recovered during 1879-1884, he sold, making a large fortune out of capital gains.

Manipulator Turned Businessman

Gould was pushed out of the Wabash and the Union Pacific in the early 1880s. He then turned his complete attention to the Missouri Pacific (of which he had gained control in 1879) and built it into a great power. He acquired feeder lines and independent companies; he used stock market profits and capital gains for financing; and he waged a relentless war on competitors, breaking up traffic pools and forcing rates down sharply. His biographer Julius Grodinsky wrote that Gould was "transformed from a trader into a business leader of national proportions." From 1879 to 1882 Gould added 2,500 miles to the road, making a capital addition of about $50 million. And between 1885 and 1889 he reentered the Wabash and the Texas and Pacific railroads, reorganized them, and tied them into his Missouri Pacific system.

At the same time Gould strengthened the other two elements in the triad that constituted his estate. One was the Manhattan Elevated Railroad of New York, which he created as a monopoly of Manhattan's rapid transit system. The second was the Western Union Telegraph Company. Gould had bought the unimportant American Union Telegraph in 1879, consolidated it with the Western Union in 1881, and 7 years later added the influential telegraph network of the Baltimore and Ohio Railroad. By the end of the 1880s Western Union, now the parent company, had no real competitor in the two important businesses of railroad telegraphy and the transmission of Associated Press stories to member newspapers. It was one of the most profitable companies in the country. Gould died in New York on Dec. 2, 1892, leaving the management of his properties to his son George Jay Gould.

Further Reading

An excellent biography and railroad history of the period is Julius Grodinsky, Jay Gould: His Business Career, 1867-1892 (1957). A lively study of the family is Edwin P. Hoyt, The Goulds: A Social History (1969). The story of the "Erie war" is in Charles F. Adams, Jr., and Henry Adams, Chapters of Erie (1871). For a broad understanding of the era that made the emergence of industrial capitalists like Gould possible, see Louis M. Hacker, The World of Andrew Carnegie, 1865-1901 (1968). Gustavus Meyers, History of the Great American Fortunes (1907), portrays Gould as the "robber baron" par excellence.

(1836-1892), railroad financier. Christened Jason, Jay Gould was born on a farm near Roxbury, New York. He taught himself the rudiments of surveying, and by the age of twenty-one, the undersized, quick-witted youth had prepared several county maps, written a local history, and saved five thousand dollars. Between 1856 and 1860 Gould operated a tannery but gave it up to join a Wall Street brokerage house. Following the panic of 1857 he had made modest and profitable investments in several short railroads.

In 1867 Daniel Drew, treasurer and longtime director of the Erie Railroad, added Gould and James Fisk to the Erie board of directors. When Cornelius Vanderbilt, of the New York Central, sought to buy control of the Erie a spectacular battle ensued. Gould, Fisk, and Drew promptly issued thousands of shares of new, watered stock. When the angry Vanderbilt obtained an arrest warrant for the three, they ferried company headquarters to Jersey City, and Gould rushed to Albany where a pliable New York legislature authorized the stock issue. Eventually peace was made with Vanderbilt, but that gentleman was reported to have muttered that his trouble with the Erie "has learned me it never pays to kick a skunk." Later in the fall of 1869 Gould and Fisk conspired with the brother-in-law of President Ulysses S. Grant to corner the gold market, causing the panic of "Black Friday," September 24, 1869. Gould continued to loot the Erie until his departure in 1872. His role in the Erie War and the attempted gold corner gave him a reputation as the prime financial predator of the age.

Possessing a fortune, Gould turned to western railroads. In the twenty years after 1872 he was a director of seventeen major lines and the president of five. He purchased much Union Pacific stock and controlled that road until 1878. At first Gould improved the management of the Union Pacific but later blackmailed the company by threatening to have the Gould-controlled Kansas Pacific build a nuisance line to Utah. During the 1880s Gould controlled about half the mileage southwest of St. Louis and Kansas City and tried unsuccessfully to expand his western holdings into a transcontinental rail empire to the Atlantic Coast. He also owned the New York World for a time and held major investments in New York City's elevated railways and several large telegraph companies, including Western Union. In his last years Gould suffered from tuberculosis and died of that disease at the age of fifty-seven, leaving a fortune of $77 million to his six children.

Gould was a man of many faults and virtues. He was cold and unscrupulous but courteous and unassuming, and in his private life, devoted to his family, flowers, and books. He could not be trusted but nonetheless helped build more efficient regional rail systems. He was a wrecker of values but a railway leader who helped achieve major rate reductions. Gould remains the prototype robber baron of the late nineteenth century, although his defects probably have been exaggerated because he was never comfortable with the press.

Bibliography:

Robert L. Frey, ed., Railroads in the Nineteenth Century (1988); Maury Klein, The Life and Legend of Jay Gould (1988).

Author:

John F. Stover

See also Railroads; Robber Barons.

You might be looking for Stephen Jay Gould, the American biologist and author, or Jay M. Gould the statistician.

Jay Gould
Born	Jason Gould May 27, 1836(1836-05-27) Roxbury, New York, U.S.
Died	December 2, 1892 (aged 56) Manhattan, New York, U.S.
Occupation	Financier
Spouse(s)	Helen Day Miller (1838-1889) (m. 1863–1889) «start: (1863)–end+1: (1890)»"Marriage: Helen Day Miller (1838-1889) to Jay Gould" Location: (linkback:http://en.wikipedia.org/wiki/Jay_Gould)
Children	George Jay Gould I Edwin Gould I Helen Gould Anna Gould Frank Jay Gould
Parents	John Burr Gould (1792-1866) Mary More Gould (1798-1841)

Jason "Jay" Gould (May 27, 1836 – December 2, 1892) was an American financier who became a leading American railroad developer and speculator. Although he has long been vilified as an archetypal robber baron, whose successes made him the ninth richest American in history,^[1] some modern historians working from primary sources have discounted various myths about him.^[2][3]

Contents 1 Birth and early career 2 Marriage 3 The Tweed Ring 4 Black Friday 5 Lord Gordon-Gordon 6 Late career 7 Death 8 Legacy 9 References 10 Timeline 11 See also 12 Further reading 13 External links

Birth and early career

Jason Gould was born in Roxbury, New York, the son of John Burr Gould (1792-1866) and Mary Moore Gould (1798-1841). He was born into a poor family, with his mother and father, as well as his dog. Gould's father was of British colonial ancestry, and his mother of Scottish ancestry. He studied at the Hobart Academy, but left at age 16 to work for his father in the hardware business. He continued to devote himself to private study, emphasizing surveying and mathematics. In 1856 he published History of Delaware County, and Border Wars of New York which he had spent several years writing.^[4]

Gould later went to work in the lumber and tanning business in western New York and then became involved with banking in Stroudsburg, Pennsylvania.

Marriage

He married Helen Day Miller (1838-1889) in 1863 and had six children:

• George Jay Gould I (1864–1923), married Edith M. Kingdon (1864–1921)^[5]
• Edwin Gould I (1866–1933), married Sarah Cantine Shrady^[6]
• Helen Gould (1868–1938), married Finlay Johnson Shepard (1867–1942)^[7]
• Howard Gould (1871–1959), married Viola Katherine Clemmons on October 12, 1898; and later married actress Grete Mosheim in 1937^[8]
• Anna Gould (1875–1961), married Paul Ernest Boniface, Comte de Castellane (1867-1932); and after a divorce married Helie de Talleyrand-Perigord, 5th duc de Talleyrand, 5th duc de Dino, 4th Herzog von Sagan, and Prince de Sagan (1858–1937)^[9]
• Frank Jay Gould (1877–1956), married Helen Kelley; then Edith Kelly; and then Florence La Caze (1895–1983)^[10]

The Tweed Ring

It was during the same period that Gould and James Fisk became involved with Tammany Hall. They made Boss Tweed a director of the Erie Railroad, and Tweed, in return, arranged favorable legislation for them. Tweed and Gould became the subjects of political cartoons by Thomas Nast in 1869. In October 1871, when Tweed was held on $1 million bail, Gould was the chief bondsman.

Black Friday

Jay Gould in 1855

Main article: Black Friday (1869)

In August 1869, Gould and Fisk began to buy gold in an attempt to corner the market, hoping that the increase in the price of gold would increase the price of wheat such that western farmers would sell, causing a great amount of shipping of bread stuffs eastward, increasing freight business for the Erie railroad. During this time, Gould used contacts with President Ulysses S. Grant's brother-in-law, Abel Corbin, to try to influence the president and his Secretary General Horace Porter. These speculations in gold culminated in the panic of Black Friday, on September 24, 1869, when the premium over face value on a gold Double Eagle fell from 62% to 35%. Gould made a nominal profit from this operation, but lost it in the subsequent lawsuits.

The gold corner established Gould's reputation in the press as an all-powerful figure who could drive the market up and down at will. For the rest of his life, newspaper writers would attribute to Gould almost any market development they could not explain otherwise.^{[citation needed]}

Lord Gordon-Gordon

Lord Gordon-Gordon

In 1873 Gould attempted to take control of the Erie Railroad by getting foreign investments from Lord Gordon-Gordon, a cousin of the Campbells looking to buy land for immigrants, Gould bribed Gordon-Gordon with $1 Million in stock. However, Gordon-Gordon turned out to be a fraud, cashing the stock immediately. Gould sued Gordon-Gordon, with Gordon-Gordon put on trial in March 1873. Gordon-Gordon gave the names of his European personages in court, whom he claimed to represent, and was granted bail while the references were checked. Gordon-Gordon took this opportunity to flee to Canada, where he convinced authorities that the allegations brought against him were false.^[11][12]

After failing to convince or force Canadian authorities to hand over Gordon-Gordon, Gould and his associates, which included two future Governors of Minnesota and three future Members of Congress, attempted to kidnap him. The group was successful, but were stopped and arrested by the Northwest Mounted Police before they could return to the United States. The kidnappers were put in prison and refused bail.^[11][12] This led to an international incident between the United States and Canada. Upon learning that the kidnappers were not given bail, Governor Horace Austin of Minnesota demanded their return and put the local militia on a state of full readiness. Thousands of Minnesotans volunteered for a full military invasion of Canada. However, after negotiations, the Canadian authorities released the kidnappers on bail.^[11][12]

The whole incident resulted in Gould losing any possibility of taking control of Erie Railroad.

Late career

Jay Gould's Pullman Company rail car "Atalanta" now in Jefferson, TX

After being forced out of the Erie Railroad, Gould started, in 1879, to build up a system of railroads in the Midwest by gaining control of four western railroads, including the Union Pacific and the Missouri Pacific Railroad. In 1880, he was in control of 10,000 miles (16,000 km) of railway, about one-ninth of the length of rail in the United States at that time, and, by 1882, he had controlling interest in 15% of the country's tracks. Gould withdrew from management of the UP in 1883 amidst political controversy over its debts to the federal government, realizing a large profit for himself.

Gould also obtained a controlling interest in the Western Union telegraph company, and, after 1881, in the elevated railways in New York City. Ultimately, he was connected with many of the largest railway financial operations in the United States from 1868-1888. During the Great Southwest Railroad Strike of 1886 he hired strikebreakers; according to labor unionists, he said at the time, "I can hire one-half of the working class to kill the other half."^{[citation needed]}

Death

The mausoleum of Jay Gould

Gould died of tuberculosis on December 2, 1892 and was interred in the Woodlawn Cemetery in The Bronx, New York. His fortune was conservatively estimated to be $72 million for tax purposes. Although a donor to charity from the 1870s onward, he willed all of his fortune to his family. At the time of his death, Gould was a benefactor in the reconstruction of the Reformed Church of Roxbury, now the Jay Gould Memorial Reformed Church.[1] The family mausoleum was designed by Francis O'Hara (1830-1900) of Ireland. Gould's mausoleum contains no external identification.

Legacy

A Duke Tobacco cigarette card depicting Gould's involvement in railroads, stock, and telegraph

In his lifetime and for a century after, Gould had a firm reputation as the most unscrupulous of the 19th century American businessmen known as robber barons. Many times he allowed his rivals to believe that he was beaten, then sprang some legal or contractual loophole on them that completely reversed the situation and gave him the advantage. He had no scruples about using stock manipulation and insider trading (which were then legal but frowned upon) to build capital and to execute or prevent hostile takeovers. As a result, many contemporary businessmen could not compete, did not trust Gould and often expressed contempt for his approach to business. John D. Rockefeller named him as the most skilled businessman he ever encountered.

The New York City press published many rumors about Gould that biographers passed on as fact. For example, they alleged that Gould's dealings in the tanning business drove his partner Charles Leupp to suicide. In fact, Leupp had episodes of mania and depression that psychiatrists would now recognize as indications of bipolar disorder, and his family knew that this, not his business dealings, caused his death. These biographers portrayed Gould as a parasite who extracted money from businesses and took no interest in improving them. He was often suspected of being Jewish due to his name and business acumen as well as his large nose, and was depicted in anti-semitic caricatures, even though he was born a Presbyterian and married an Episcopalian.

More recent biographers, including Maury Klein and Edward Renehan, have reexamined Gould's career with more attention to primary sources. They have concluded that fiction often overwhelmed fact in previous accounts, and that despite his methods, Gould's objectives were usually constructive to him.

References

1. '^ In Fortune Magazines "richest Americans, with an estimated wealth at death of $77,000,000 Gould's Wealth/GDP ratio equalled 1/185.
2. ^ Klein, Maury (1997). The Life and Legend of Jay Gould. 
3. ^ Rennehan, Edward J., Jr. (2005). Dark Genius of Wall Street. 
4. ^ Gould, Jay (1856P). History of Delaware County. Philadelphia, PA?: Keeny & Gould. 
5. ^ "George J. Gould Dies in Villa in France. Leaves $30,000,000. With His Second Wife and Her Children Near, He Yearned for His Sons. Last Malady a Secret. Death Holds Up Litigation With Family Over His Father's Estate. First Became Ill in March. Had Apparently Regained Health When He Suffered a Relapse.". New York Times. May 17, 1923. http://select.nytimes.com/gst/abstract.html?res=F00911FC3B5516738DDDAE0994DD405B838EF1D3. Retrieved 2008-05-23. "George Jay Gould died this morning at 3:30 o'clock at the Villa Zoralde, Cap Martin, where he had been living for some months with his wife and her two children. His death, it was stated at the villa, came quietly and was expected, as he had never rallied from the illness from which he had been suffering all Winter." 
6. ^ "Edwin Gould Dies Suddenly at 67. Son of Railroad Financier and Builder Was Noted for Benefactions to Children. Left School of Finance. Made $1,000,000 Profit Operating Alone in Wall Street Before Father Forgave Him.". New York Times. July 13, 1933. http://select.nytimes.com/gst/abstract.html?res=F40B14FD385C16738DDDAA0994DF405B838FF1D3. Retrieved 2008-08-06. "Edwin Gould, second son of the late Jay Gould, financier and railroad builder, died suddenly of a heart attack shortly after ..." 
7. ^ "Mrs. F. J. Shepard Dies of a Stroke. Former Helen Gould, Famous for Philanthropy, Stricken at Her Summer Home Gave Away Much of Fortune. Mrs. Finley J. Shepard Is Stricken at 70. Philanthropist and Daughter of Jay Gould Got Permission to Marry. Wed at Lyndhurst. Benefactions in War With Spain. Descendant of Pioneers.". New York Times. December 21, 1938, Wednesday. http://select.nytimes.com/gst/abstract.html?res=F60F12FE3F5F1B7A93C3AB1789D95F4C8385F9. Retrieved 2007-06-18. "Mrs. Finley J. Shepard of New York, the former Helen Gould, who was famous for her philanthropies in many fields, died at her Summer home here at 12:15 this morning, after being in a coma for more than 24 hours. She had suffered an apoplectic stroke ten days ago, and had been ill for two months. Her age was 70 years." 
8. ^ "Howard Gould dies here at 88. last surviving son of Jay Gould, rail financier, yachtsman, auto racer.". New York Times. September 15, 1959. http://select.nytimes.com/gst/abstract.html?res=F10E16FF3F551B7B93C7A81782D85F4D8585F9. Retrieved 2007-06-21. "Howard Gould, last surviving son of Jay Gould, the railroad financier, died Sunday in Doctors Hospital. He was 88 years old. Although Mr. Gould's res idence ..." 
9. ^ "Duchesse de Talleyrand Is Dead. Youngest daughter of Jay Gould". New York Times. November 30, 1961. http://select.nytimes.com/gst/abstract.html?res=FB0A14F6355912738DDDA90B94D9415B818AF1D3. Retrieved 2008-08-06. "The Duchesse de Talleyrand-Perigord, daughter of the late Jay Gould, American railroad financier, died today in Paris where she passed most of her life." 
10. ^ "Frank Jay Gould Dead on Riviera. Youngest Son of Rail Empire Maker was 78. Built Up Resort of Juan-les-Pins Heir to $10,000,000 N.Y.U. Graduate of 1899.". Associated Press in New York Times. April 1, 1956. http://select.nytimes.com/gst/abstract.html?res=F50F16F93F5F157A93C3A9178FD85F428585F9&scp=1&sq=Frank+Jay+Gould&st=p. Retrieved 2008-04-06. "Frank Jay Gould died today at his apartment at Juanles-Pins on the French Riviera. He was 78 years old." 
11. ^ ^{a b c} Donaldson, William (2004-09-02). Brewer's Rogues, Villains and Eccentrics. London: Phoenix. pp. 299–300. ISBN 0-75381-791-8. 
12. ^ ^{a b c} Johnson, J. L.. "Lord Gordon Gordon". The Manitoba Historical Society. http://www.mhs.mb.ca/docs/transactions/3/lordgordongordon.shtml. Retrieved 2008-08-22. 

Timeline

• 1836 Birth of Jay Gould as Jason Gould
• 1841 Death of Mary Moore Gould, mother
• 1850 US Census with Jay Gould in Roxbury, New York
• 1856 Publication of History of Delaware County
• 1863 Marriage to Helen Day Miller (1838-1889)
• 1864 Birth of George Jay Gould I, his son
• 1866 Death of John Burr Gould, his father
• 1866 Birth of Edwin Gould, his son
• 1868 Birth of Helen Gould, his daughter
• 1869 Black Friday
• 1870 US Census in first Manhattan home
• 1870 US Census in second Manhattan home
• 1871 Birth of Howard Gould, his son
• 1875 Birth of Anna Gould, his daughter
• 1877 Birth of Frank Gould, his son
• 1880 Purchase of Lyndehurst from the widow of George Merritt, shortening name to Lyndhurst
• 1880 US Census with Jay Gould in Greenburgh, New York
• 1889 Death of Helen Day Miller, his wife
• 1892 Death of Jay Gould

See also

• List of personalities associated with Wall Street
• Lord Gordon-Gordon, who swindled $1million from Gould.
• Lyndhurst, his country estate on the Hudson River
• Death of Jay Gould in the Brooklyn Eagle
• Paragould

Further reading

• Renehan, Edward J. (2005). The Dark Genius Of Wall Street: The Misunderstood Life of Jay Gould, King of the Robber Barons. New York: BasicBooks. ISBN 0465068855. 
• Morris, Charles R. (2005). The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J.P. Morgan Invented the American Supereconomy. New York: Holt. ISBN 0805075992. 
• "George Gould marries". New York Times. 1886-09-15. 
• "Howard Gould marries". New York Times. 1898-10-13. 
• "Howard Gould dies here at 88; last surviving son of Jay Gould, rail financier — yachtsman, auto racer". New York Times. 1959-09-15. 

External links

Wikiquote has a collection of quotations related to: Jay Gould

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• Obituary by the Iowa City Daily Citizen
• Findagrave: Jay Gould
• Photo from the Library of Congress's George Grantham Bain Collectionrem
• History of Delaware County and Border Wars of New York
• From Maps to Riches – The mapping career of Jay Gould

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