JAY GOULD, financier, gained during his remarkable life a fortune, unique in that it was one of the largest ever acquired by a single individual in the United States by his own exertions. It owed no part of its origin to inheritance. Engaged in many speculative operations, Mr. Gould was probably not a gainer, to any great extent, by these labors. The bulk of his wealth came mainly from the leaps in value of many of the securities, which he owned in later life, consequent upon the higher appreciation placed upon them, after they had come under his management. The story of his life, deeply interesting, affords encouragement to every man, who possesses patience, perseverance, coolness and acumen, his power of persuasion, analysis and foresight, and his undoubted executive capacity and talent for combinations.
Mr. Gould was slender in build, and not above medium height, but his face was a striking one. Eyes, hair, full moustache and beard were dark and handsome, and his expression, while kindly and pleasing, was firm, intellectual and penetrating. His purity in private life, his generosity, and his fidelity to friends, were proverbial. He won the enthusiastic devotion of many prominent men of sound judgment and great probity, and his death removed from Wall street a figure which had impressed itself ineffaceably upon the financial history of the United States.
It was his lot to have less said in his praise than any other successful financier of this generation. Many of the charges were absolutely unjust. His silence, a remarkable trait, sometimes sprang from pride, which prevented him from combating a misrepresentation when he was the only sufferer, while at other times it grew out of a shrewd knowledge that success would be furthered by concealing his plans. Mr. Gould's answers to many accusations, given years after their utterance, were drawn out only upon the witness stand, coming then too late to change an opinion widely entertained. He sometimes suffered on account of the transgressions of others, but always possessed the belief that, in time, justice would be done to him by a fair minded public. This confidence has been justified since his death, by a generous judgment of his achievements and cordial tributes to his memory.
Mr. Gould was a descendant of two notable families of New England. Major Nathan Gold, the pioneer, was a man of great force of character, who came from St. Edmondsbury, England, to Fairfield, Conn., about 1646. His son, Nathan Gauld, jr., rose from town clerk of Fairfield to become Deputy Governor in 1706 and Chief Justice of the Supreme Court of the State in 1724. Several of the family were soldiers in the American Revolution. The wife of Col. Abraham Gold, Jay Gould's great grandfather, was Elizabeth Burr, whose ancestor was John Burr, an emigrant to America in 1630 with Governor Winthrop, and one of the eight founders of Springfield, Mass. The Burrs included many soldiers, judges, and public officials of good repute. Col. Abraham Gold, the first of his line to spell his name Gould, was killed at the head of his regiment, the 5th Connecticut, at Ridgefield, Conn., while repelling the British raid on Danbury; and his sword, stained with British blood, is to this day in the possession of Abraham Gould Jennings, of Brooklyn, N.Y., one of his descendants. Capt. Abraham Gould, his son, "a grim, earnest, honest man," settled in 1780 in Roxbury, N. Y. John Burr Gould, his son, the first male white child born in Roxbury, was a man of [p.266] sturdy character, and showed his fibre in 1844 by resistance to the fanatics of the anti-rent agitation. While defending his home against the anti-renters, he found an enthusiastic supporter in his boy, Jay. A well read man, noted for public spirit, he helped to found schools and advance the interest of the community. He married Mary More, the grand-daughter of John More, a sturdy Scot, who had come from Ayrshire, in 1772. Prom his excellent mother, Jay Gould inherited that religious instinct, which kept alive, in his later years of battle with the world, the gentleness of manner and the generosity of dealing which repeatedly characterized him when he bargained with other men over millions of dollars worth of property.
Jay Gould, known in childhood as Jason Gould, was born at the homestead in Roxbury, May 27, 1836. He was educated at the district school and Beechwood and Hobart seminaries, and at the age of seventeen learned Latin and Greek in a school in Albany. Application, acute perception and a retentive memory characterized him as a student. He was genial and fond of fun and open air sports but not of rude games.
Not fitted for farm work, Mr. Gould longed for a business career. To gratify this aspiration, his father exchanged the farm for a hardware store in Roxbury, and here the young man received his first business training. He began as a clerk, was a partner at fifteen, and became chief manager of the business. During this time, he learned surveying. Studying his books from 3 to 6 A. M., and practicing with the instruments of Squire Burhans, a prominent resident, the young man became a competent surveyor.
His first professional work, begun in April, 1852, was the survey and mapping of Ulster county, N. Y. He was employed at this task upon a salary first of $20, then of $30, a month. At the outset, he was an assistant in the venture. His partner failed before the survey was completed, and two other young surveyors being admitted to partnership, Mr. Gould sold his interest to them for $500.
For several years, Mr. Gould hoped to realize enough from his ventures to carry him through Yale College. This dream was never realized.
The young civil engineer then surveyed and mapped, 1853-56, the counties of Albany, Delaware and Sullivan, and the town of Cohoes. He also had charge of the mapping of counties in Ohio and Michigan, and the survey of a railroad from Newburg to Syracuse and of The Albany and Niskayuna plank road. Some of the contracts were transferred to a surveyor in Philadelphia before completion and netted Mr. Gould a profit of more than $5,000. The building of the Niskayuna plank road by him in three days and a half was a remarkable achievement. This road yet exists and has always been of great service to the town, even to those who originally opposed it. The enterprise revealed his characteristic traits. He had prepared to make the survey with the common level. "Imagine my surprise," he wrote to a friend, "when one of the directors came bringing up a monstrous theodolite with its complication of screws and what not, the identical one that served an apprenticeship on the Hudson River Railroad, and, for its valuable services there, was afterward promoted to generalship on the Northern Railroad. I could not for a good while even unloosen the needle, much less adjust the instrument. I was completely knocked in the head." But he kept his own counsel. Fortunately, the snow turned to rain, when the men were ready to begin, and during two stormy days Mr. Gould mastered the instrument. Confronted with other unexpected problems, he met them all victoriously by study in the State library and otherwise, without betraying how they had disconcerted him.
While engaged in field work in Delaware county, Mr. Gould gathered the material for his famous history of the county. He wrote the work with great care, toiling over its pages when he should have been asleep, resting four or five hours a day only. When completed, it was sent to Philadelphia to be printed. In April, 1856, the young author learned that his manuscript had been burned. The tenacity of purpose which he revealed so remarkably in later life, served him then in good stead. He rewrote the book. A few proof sheets had been saved, and parts of the history had been printed in Bloomfield Mirror. The greater part he rewrote from memory. He devoted himself to this task by night and day, and saw the book of 400 pages triumphantly issued in September, 1856. This history, written ingenuously, was a remarkable production for a young man of twenty. The story that he afterward sought to buy the copies, which had been sold, and withdraw them, because the printer had spelled his name "Gold," is untrue. Copies of the book, now in existence, show the name spelled "Gould."
Mr. Gould now plunged into a larger enterprise. In Eastern Pennsylvania, he founded the town of Gouldsboro' and established a tannery in partnership with Zadoc Pratt. Fifteen miles from any settlement, he felled the first tree with his own hands, sawed it into boards with a portable saw mill, built a blacksmith shop before sunset, and slept in the improvised cabin the first night. Of the tannery, Mr. Gould proved an enterprising and successful manager. He constructed a plank road, organized a stage route and two churches, built a school house, created a bank of which he was a director, and became postmaster of the place. The settlers became his ardent friends.
Mr. Gould soon bought Mr. Pratt's interest and formed the partnership of Jay Gould & Co., with Charles M. Leupp and D. Williamson Lee, of New York. The tannery transacted a large business and stimulated other local industries. Oct. 5, 1859, Mr. Leupp committed suicide in New York, having for years been gradually losing his mind. His brother in law, Mr. Lee, thereupon, as representative of a two-thirds interest, conceived the plan of forcing Mr. Gould out of the concern. He evaded a settlement, asked Mr. Gould to meet him in New York, Feb. 29, 1860, and, without waiting for him, hastened to Gouldsboro'. Taking possession of the tannery, he threw out the superintendent with bodily violence, barricaded the works, and garrisoned them with about thirty-five armed men. When Mr. Gould learned the situation, he sought advice, ascertained his rights, and repaired to the tannery. Entirely without his solicitation, about 250 residents gathered to support him. Being refused admission to the tannery, he led, unarmed, a squad of twenty-five men to the front door, while a second squad attacked the rear. He was twice repulsed, but the works were stormed on the third attempt, the garrison fleeing in all directions. The only persons wounded were several of the garrison, who were shot by their own mates. Mr. Lee then began legal proceedings, but was completely defeated, and sought refuge, as many another assailant did in later years, in abusing Mr. Gould. Mr. Gould finally sold his interest in the tannery and the mammoth buildings then fell into decay and ruin.
Just before the Civil War, the attention of Mr. Gould was drawn to railroads. He had thought much on the subject from boyhood. In 1860, the young financier met Daniel S. Miller, a great grocer of New York city, who feared failure through being a trustee of the second mortgage bonds of The Rutland & Washington Railway Co., believing that the first mortgage bonds had been cancelled. Mr. Gould offered to assist him, and succeeded in buying up the bonds for 10 cents on the dollar, they being considered worthless. He afterward became president, treasurer and superintendent of this road and obtained a thorough knowledge of railroading. The young surveyor carefully inspected every mile of track in person, examined all the bridges, grades and crossings, and estimated the resources of the country tributary to this road. He then began judicious repairs, developed the local traffic, and, by consolidation with other roads retrieved the fortunes of the companies. The rise in value of the shares of these roads, by his own operations, opened Mr. Gould's eyes to the possibilities of railroad management. This also gave him capital of his own for greater operations.
He then entered the stock brokerage firm of Smith, Gould & Martin in New York city. One step leads to a longer one in the progress of a successful man. The surveyor had become a railroad manager; the manager was now a dealer in railroad shares. Mr. Gould's Wall street career made him profoundly versed in the value of railroad properties; and led to his buying shares in bankrupt roads and engaging, like others of the strongest capitalists of that day, in bold operations at the Stock Exchange.
In speculation, Mr. Gould's genius for combination, his brilliant strategy, and untiring tenacity of purpose, blazed forth with great power. He was often a heavy loser, yet, in several ventures he met with notable success. At times, he was the largest borrower in the United States, perhaps in the world. In obtaining the loans he required, he was aided by a trait, early displayed and characteristic of his whole life. He never broke his promise, but always kept his word.
It is not practicable here to describe in, detail all of the operations in which Mr. Gould was engaged. Only a few of the more striking need be referred to.
While gold was at a premium, Mr. Gould bought and sold this metal for a profit, in common with other operators, sometimes, though not always, with success. In August, 1869, a daring speculation was set on foot by a syndicate, controlled by Mr. Gould, in which James Fisk, jr., was a partner, which sought to "corner" the gold market. All the gold which could be had was bought, the price rising slowly from about 138 in August, to 140, then to 150, and finally, Sept. 24, 1869, to 162. The government having resolved to sell gold, Mr. Gould also began to sell, although giving orders not to sell to Mr. Fisk's brokers. The price fell to 134, and brought on the catastrophe of "Black Friday," Sept. 24, 1869. Mr. Gould lost $4,000,000, and was for some time charged with precipitating the panic. Men of position like Alonzo B. Cornell and others, thoroughly acquainted with the story, acquit Mr. Gould of responsibility for "Black Friday." They place it upon Mr. Fisk. Mr. Fisk repudiated his contracts. Mr. Gould did not.
Mr. Gould became interested in The New York & Erie Railroad, when it was a bankrupt property. He bought about 500 shares, because he believed in the merits of the road. His confidence in the future of Erie led to his election as a director and afterward as president. During his management, he was forced into a struggle with Commodore Vauderbilt and Daniel Drew for the control of the road, but was able, by various adroit moves, all of them legal, but for some of which he was criticised by opponents, to retain the management for years. He built up the Erie Railroad by exactly the same legitimate methods as those employed in Vermont, and made the Erie a great commercial highway and a paying investment. Circumstances associated James Fisk, jr., with Mr. Gould in this enterprise. He had been buying shares and was elected a director at the same time as Mr. Gould. Mr. Fisk was reckless and unscrupulous in methods, fond of extravagant display, and defiant of public opinion. He undoubtedly did more to influence the young men of his day to evil courses, than any other human being in the field of American finance. Mr. Gould strove to restrain Mr. Fisk. Nevertheless, they were associated in the public mind and Mr. Gould incurred blame for acts for which Mr. Fisk alone was responsible.
In November, 1872, proceedings were brought against Mr. Gould for the recovery of Erie property, which, it was declared, he had improperly retained. The management having been changed by the vote of the foreign stockholders, as soon as his successor was elected, Mr. Gould turned over to him these securities, none of which had any market value and all of which had been held by his predecessor as president. Documents were given him, exonerating him from all the charges previously made.
At various times, a number of combinations were made against Mr. Gould in Wall street. To "corner" him was a favorite attempt, but always exciting and dangerous. He was usually a match for antagonists. Nevertheless, in the panic of 1873, he is said to have lost a larger sum than any other capitalist of that time.
In The Cleveland & Pittsburgh Railroad, Mr. Gould showed constructive abilities of high order. Having bought about 25,000 shares of its stock at about $65 and $70 a share to oblige a friend, he reorganized the road, developed its traffic to such an extent that while he was its manager it never passed a dividend, brought the stock up to $120 a share, and leased the road successfully to The Pennsylvania Railroad. He was a large gainer by this proceeding.
As a railroad manager, Mr. Gould was identified most prominently with The Union Pacific, The Texas & Pacific, The Wabash, and The Missouri Pacific Railroads. He took charge of The Union Pacific Railroad, when it was a discredited enterprise. Beginning in 1873, he bought a large amount of its stock when the price ranged between $15 and $30 a share. In February, 1879, he was the owner of 190,000 shares. On the 17th of that month, he sold 100,000 shares for $7,000,000, his profit being about $4,000,000. He built up the road by attention to its requirements, securing proper connections to the eastward, and by consolidation, until it paid large dividends.
The same constructive ability was shown in his management of the other great lines named above. Intelligent, far seeing, and straight forward, he created one of the most wonderful railroad systems of the world. The controlling interest in The Texas & Pacific, he bought from Thomas A. Scott, for $2,400,000. The Missouri Pacific, which he bought from Commodore Garrison, is a living testimony to his skill of combination. The main line of 287 miles from St. Louis to Kansas City has been made the principal factor in a system of about 10,000 miles of road, extending in one direction to Omaha, El Paso, Laredo and Galveston, and to Chicago, Toledo and Detroit in the other.
Mr. Gould was, at times, the president of his various roads, but the care was too great for one man, and while retaining control and direction, he finally placed able managers in charge of many of them, in order to relieve himself from the details of management. An excellent judge of character, he seldom made an unfortunate selection. In the general direction of these great systems, he repeatedly showed his good faith, when once pledged to a definite policy or when his word had once been given. He was in the habit of watching business closely, especially in a crisis, not only for his own sake but for that of stockholders, in order to prevent a failure.
An interesting incident was a step, by which he averted a panic in 1882. The rumor had gone forth that he was financially embarrassed. To avert a crisis, he invited several of the strongest financiers of that day into his office, including Cyrus W. Field and Russell Sage, and laid before them the contents of his safe, displaying to their astonished gaze $53,000,000 in the best securities. This put an end to the crisis.
Mr. Gould having finally attained an impregnable financial position, withdrew gradually from Wall street to devote his attention to a few great properties.
In the development of The Western Union Telegraph Co., he showed both organizing power and tenacity of purpose. In 1875, he came into control of The Atlantic & Pacific Telegraph Co., whose lines were in bad condition, the expenses outrunning the revenue. Thomas T. Eckert was invited to the presidency and the two men entered upon a carefully aggressive policy. After a laborious and anxious commercial fight, Mr. Gould, with great financial skill, consolidated his concern with The Western Union Telegraph Co., making it a special condition that Gen. Eekert should become general manager of the united companies. His disappointment was great when the fulfilment of the promise was evaded. In a letter recently written, Gen. Eckert narrates what followed: "It was necessary for me to decide upon other plans for myself. I accordingly, after mature deliberation, determined to construct a telegraph line between Boston, Mass., and Washington, D.C., via New York, Philadelphia and Baltimore, and to make it the nucleus of a yet larger system of wires designed exclusively for leasing to firms and individuals for commercial uses. When I had worked, out this scheme in my mind, I laid it before Mr. Gould. He listened to me patiently, and then, in half quizzical way, asked if I did not wish to have a partner. I was so absorbed in my ideas that I did not notice the smile with which he put the question; and I blandly answered him "No." He quietly disregarded me and began to write a check for one million dollars, which he said he thought I might find very useful to my credit. Out of this circumstance grew the incorporation of The American Union Telegraph Co., and I became its president." With The American Union, Mr. Gould menaced the older company, displaced its lines from The Baltimore & Ohio, The Union Pacific, and other railroads, and reduced the value of Western Union stock from $116 to $88 a share. This vigorous campaign brought about the consolidation of The American Union with The Western Union Telegraph Co., in 1881, and its preponderance in the ownership of the largest telegraphic system which has ever come into existence. Mr. Gould became a director. His holdings of Western Union stock were then $30,000,000. He reduced them afterwards to about $20,000,000. In 1883, he had absorbed The Mutual Union Telegraph Co., and four years later The Baltimore & Ohio. This made him controller of the telegraphic system of the United States, and he was the entire master of of the field until John W. Mackay and James Gordon Bennett appeared with their rival line. Mr. Gould aimed to make his company the only one in America. In this he did not succeed entirely, but he created a great system, with ocean cables to Europe, the West Indies and South America.
A majority interest in the elevated railroad system of New York city was a possession forced upon Mr. Gould for the rescue of his friend, Cyrus W. Field, from embarrassment. Mr. Gould had purchased largely of the stock of these roads. Mr. Field, also a large stockholder, entered, in 1886, upon a speculation to advance the price of Manhattan shares to $200 or $300, that being the value of the shares of the surface street car lines. Through his operations, Manhattan rose to $175 a share. He bought largely as the price advanced, securing the money for new purchases by pledging his holdings as collateral. Mr. Gould warned Mr. Field more than once against the risk of overloading, but the latter continued to buy. At length, Mr. Field found himself carrying 88,000 shares of Manhattan stock, worth at par $8,800,000, which had risen in nominal value to $15,000,000. The price then suddenly fell. If Mr. Field had been compelled to sell, a panic would have ensued with a complete extinction of Mr. Field's fortune. In this emergency, he appealed to Mr. Gould for aid, through John T. Terry, a mutual friend. Mr. Gould first loaned to Mr. Field $1,000,000, in bonds, without security. He then bought from him 78,000 shares, at $120 a share, paying $9,360,000 therefor, and later, loaned him $300,000 in cash. Mr. Gould did this at inconvenience to himself, while suffering severely from neuralgia, and saw his purchase drop $3,750,000 in value in a few days. Yet this act of unbounded generosity was performed to oblige a friend. The stock fell at one time to $77.
Mr. Gould's wife was Helen Day, the daughter of Daniel S. Miller. She was the descendant of an English family, which had settled on Long Island, at Easthampton, in colonial days. A company of nearly fifty people were present at Mr. Gould's marriage, and four hundred or more attended the reception which followed. This was a happy union. Mr. Gould's home life was a beautiful one. His tastes were refined. He loved books, flowers and pictures, and was surrounded with them. His castle-like country home of Lyndhurst, at Irvington, built of stone, is now owned by Miss Helen M. Gould, but will revert to the estate when the younger member of the family, Frank Jay, attains his majority. It is delightfully situated, commanding an impressive view of the Hudson river. The grounds are beautifully laid out, and a large conservatory supplies the family with flowers and the choicest grapes all the year. At this place Mr. Gould and his family spent many happy days. His marriage brought him six children, George Jay, Edwin, Helen Miller and Howard Gould; Anna, wife of Count Paul Marie Ernest Boniface de Castellane of France; and Frank Jay Gould, all of whom are living. His family were always tenderly devoted to him.
It was not generally known that Mr. Gould was a man of great liberality toward philanthropic objects, but such was the fact. His gifts were mainly made on condition that no publicity should be given to him as a consequence. His charities were silent, and the thousandth part of his beneficence has never become publicly known. For many years, Mr. Gould entertained the purpose of founding a great educational institution for young men of moderate means. Illness and business cares prevented him from elaborating the plan, and his death, Dec. 2, 1892, finally frustrated the purpose. He left equally to his six children his great property, estimated at about $100,000,000, which was invested mainly in The Missouri Pacific Railroad, The Western Union Telegraph Co., The Manhattan Railway, The Wabash, and The Texas & Pacific Companies.