Gould, Jayson "Jay"

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GOULD, JAYSON "JAY"

Jayson Gould (1836–1892), known as Jay, was born in Roxbury, New York, on May 27, 1836. A farmer's son, he attended a local academy for schooling and also learned surveying skills. From ages 18 to 21, Gould helped to prepare maps of New York's southern counties; he later worked as a clerk and a blacksmith. When he and a partner were able to put together a stake of $5,000, he went into the leather-tanning business in northern Pennsylvania.

Gould eventually moved to New York City, where he sold leather goods and, in 1859 and 1860, began speculating in the stock market. Ruthless in his stock market dealings, Gould made great profits from Pennsylvania, New York, and Ohio railroad stocks. Financial markets were unregulated at that time, and Gould became a master at maneuvering stocks for his own gain.

Trading in the securities of his own companies, exploiting banks, and corrupting legislators and judges were all strategies employed by Gould. He became a power on Wall Street as he learned to manipulate the intricacies of corporate management and security trading. Gould was not above savaging companies and driving investors to ruin if it would make him a profit. The first financing he obtained was from a man who committed suicide after being wiped out. Gould himself was to earn and lose millions of dollars several times in his career.

Gould obtained a position on the board of directors of the Erie Railroad in 1867. He planned to control the railroad, and wanted to expand it to Chicago. His opponent in this scheme was famed industrialist Cornelius Vanderbilt (1794–1877). Gould schemed behind the scenes, using front persons in what became known as the Erie War with Vanderbilt. Illegally converting debentures to stock, Gould bribed legislators in Albany to legalize his actions. Eventually, Vanderbilt left the Erie to Gould, who then sought to expand the railroad. At the same time, he increased the company's debt as he traded in Erie stocks, making a fortune before driving the railroad into bankruptcy in 1875.

While working on the expansion of the Erie, Gould bought controlling shares of the Wabash Railroad, which was principally a carrier of wheat. Gould hatched a scheme to increase wheat purchases—and therefore Wabash freight revenues—by manipulating the price of gold to make American wheat more attractive to foreign purchasers. His plan involved pushing the price of gold up by secretly buying the metal on the market. But on September 24, 1869, the date known as Black Friday, the U.S. Treasury dumped gold on the market to bring the price back down, and the sudden drop in gold prices created a panic on Wall Street. Gould lost a fortune in the panic, as all stock prices came tumbling down. However, continued successful speculation brought Gould back to the ranks of the rich by 1872, and he set out on another scheme to manipulate railroad stocks. In the meantime, one of his partners, James Fisk, was murdered by his mistress's pimp.

Although Gould had lost the Erie, he added the Texas and Pacific, Missouri Pacific, and Union Pacific railroads to his interest in the Wabash. He followed the time-honored practice of buying up large amounts of shares when the prices are low. In another shrewd move, he purchased independent lines and feeder lines that added to the larger railroads' clout. The railroad companies then saw great increases in their stock prices, and Gould sold out his interests during the strong market of the early 1880s, making another fortune. Gould's tenure as the business leader of railroads was not solely self-serving, however: He added 2,500 miles of track to the Missouri Pacific from 1879 to 1882, and he forced shipping rates down by waging relentless war on his competitors. Between 1885 and 1889, he reacquired and reorganized the Wabash and the Texas and Pacific railroads, then merged them with his Missouri Pacific system.

Two more of Gould's interests would eventually add much to his estate. He used the Manhattan Elevated Railroad of New York to establish a monopoly on Manhattan's rapid transit system. He also purchased the American Union Telegraph company in 1879 and consolidated with Western Union in 1881. In 1888 he added the telegraph network of the Baltimore and Ohio Railroad; by the end of the 1880s Western Union had no real competition in railroad telegraphy and the transmission of wire stories to newspapers via the Associated Press.

Biographers have described Gould as somber, joyless, diabolical, and fiendishly clever at making money through stock manipulations; many refer to him as a "robber baron" who liked only money, books, and gardening. In 1863 he married Helen Day Miller and the couple had six children. At his death in New York on December 2, 1892, his estate was worth $77 million. His children, having inherited great wealth, lost or squandered a good deal of the money, although some philanthropic activities did take place in later years.

See also: Railroad Industry, Robber Barons