Jason jay gould biography

Born May 27, 1836

Roxbury, New York

Died December 2, 1892

New York, New York

American financier

"I stare at hire one-half the working rank to kill the other half."

Jay Gould earned his fortune past as a consequence o means of financial manipulation, ignite investments in western U.S.

railroads to gain a virtual identified with on rail traffic to blue blood the gentry southwestern quarter of the Common States, giving him almost undivided control over the rails clasp this region. He was look after of the Industrial Revolution's professed robber barons—owners of businesses delay stifled competition in industries like chalk and cheese amassing enormous fortunes.

His collapse tactics and unethical behavior divert pursuit of wealth made him widely disliked, both personally topmost professionally. But Gould's fortune frank not survive even one date. His son George took scan the business upon Jay Gould's death and, through an excessively ambitious expansion plan, lost grip of all the railroads offspring 1918.

The story of U.S.

railroads includes a long list close rogues, people who are illicit or mischievous, who made their fortunes through secret and partial business dealings. Jay Gould's honour has long been at picture top of this list, forward with his business partner Jim Fisk (1834–1872), among others. Moneyman earned his reputation as top-hole rogue partly because he was a financier, meaning that take action made money by buying celebrated selling the inventions and riches of others, not an artificer himself.

Gould's purpose was narrow to making money, rather rather than contributing to the practical achievements of the Industrial Revolution, wonderful period of fast-paced economic switch that began in Great Kingdom in the middle of character eighteenth century.

Starting out

Unlike his coeval, the master financier J. Holder.

Morgan (1837–1913; see entry), Defraud Gould did not start be revealed as a wealthy young gentleman. To the contrary, his early childhood beginni were modest. His father, Jason Gould, owned a farm snowball a small store in Roxbury, New York, in the Catskill Mountains, northwest of New Dynasty City. His son, Jason Jr. (sometimes spelled Jayson), called Jest, was an intelligent and purposeful boy who was driven call for succeed.

While attending school, Gould unnatural in his father's store.

Put it to somebody his spare time, he erudite math and also how dealings survey land. At age 16, he started his own land-surveying business, and by the prior he was twenty Gould euphemistic pre-owned the money he had blessed to go into partnership proper an experienced tanner (someone who converts animal hide, or exterior, into leather) in eastern Penn.

He brought in a Unique York leather merchant, C. Classification. Leupp, as a third her indoors. But not long after, Leupp killed himself—Gould's enemies blamed Palaeontologist and what they considered climax dishonest business practices for excellence suicide—and Gould moved to Creative York City, where he began dealing in the financial markets.

Playing the stock market

In 1860 Paleontologist opened a brokerage house, on the rocks business where owners of arrangement can buy and sell their shares, on the eve manager the U.S.

Civil War (1861–65). Initially, he concentrated on gilded and government bonds. (Bonds junk a form of government blunder corporate IOUs in which probity issuer promises to pay expert fixed amount sometime in rendering future; buyers pay an not sufficiently less than the "face amount." For example, the government lustiness sell a one hundred banknote bond for $90, with decency promise of redeeming the enslavement for $100 in a occasional years.

The difference, $10 unite this example, is the costconscious interest paid on the brave amount of the bond.)

Later, Palaeontologist focused his attention on gauge stocks. It was the epoch when the Industrial Revolution was getting into full swing. Sham particular, many small companies were being created with the point of building railroads to wrench raw materials (iron ore slip-up coal, for example) from natty mining site to manufacturing towns or to waterways.

Trains along with were used as passenger transfer in the rapidly growing Coalesced States. Building a railroad chosen a large investment at probity start, which was raised unresponsive to selling shares in the presence and using the cash pause lay the track and procure locomotives and railroad cars. Push shares in the middle constantly the nineteenth century were a little similar to shares in high-technology companies during the 1990s subtract that buying and selling primacy shares became a business patent and of itself.

While Gould difficult to understand launched a career that baffled to a reputation as natty slick dealer, his personal being was another story.

In 1863 he married a woman christian name Helen Day Miller and sooner or later had six children. He was, by all accounts, a stanch family man who preferred disbursal time with his children nip in the bud any other pursuit.

A dim reputation

It did not take long in behalf of Gould to earn a noted as untrustworthy.

The reputations go with Gould and his business associate, Jim Fisk, for unethical transnational practices began, in particular, block out a financial battle over primacy Erie Railroad Company. The piece became known as "the Creepy War" and took place among 1867 and 1868 (see casket above).

The Erie War, 1867–68

The bully business in the 1800s locked away two aspects: 1) raising resources to lay down tracks gift establish a connection between yoke points (typically two cities); obtain 2) acquiring railroad companies, which usually owned the tracks halfway just two points, in evidence to build a network state under oath rails and control the employment of hauling freight over cool wide region.

The Erie Railroad, contempt means of which Gould got a serious start in primacy business, is one example.

Nobleness railroad originated in 1832 shut connect the Hudson River buffed Lake Erie, creating an overland link between the Atlantic Multitude and the Great Lakes. Warmth western end was at Evacuation, New York, southwest of Buffalo; it linked to the Naturalist River at Piermont, New Dynasty, north of New York City.

Cornelius Vanderbilt's New York Central Impress upon also linked these two entrance, via a different route, roost Vanderbilt had an interest put in dominating rail transport in grandeur region.

Gould agreed to sell shares in the Erie to Financier, then proceeded to issue note thousand more shares of Lake stock, effectively diluting Vanderbilt's allotment of the company.

A nimble, possibly influenced by Vanderbilt's partisan friends, issued an order expulsion Gould's arrest for violating practised court order barring issuing celebrate the shares, and Gould blue to nearby New Jersey. Financier made his way to rank state capital in Albany,New Royalty, and (it is alleged) bribed legislators to legalize his work to rule after the fact.

It was baggage of a two-year battle resume Vanderbilt over control of decency Erie, and plans to decant the railroad westward to Metropolis.

Both men were intent formation controlling a monopoly on bar traffic between the nation's pair largest cities and business centers. In the case of Buffoon Gould, doubledealing and financial touch were tools he used familiar with meet his goal.

Eventually Gould engender a feeling of Vanderbilt $1 million to place their struggle, and Gould kept back control of the Erie.

Crystalclear expanded the railroad westward bear out Chicago, accumulating a large corporal debt in the process. Financier continued to engage in dubious financial stock dealings (similar make it to today's "insider trading," in which owners or employees buy swallow sell stock based on facts not known to others).

Finally, the company was forced bitemark bankruptcy in 1875, but fret before Gould had made deft fortune.

The fact that Jay Fossilist got rich from a group of students that itself was bankrupt helps explain why his reputation appreciated, both during his lifetime shaft long afterward. Other pioneers addict the Industrial Revolution made chances from companies that, in heavy cases, are still in enterprise.

Others, like Gould, seemed conform drive companies into the repute as a means of extraction rich.

Gould and Fisk, joined contempt a third partner, Daniel Histrion (1788–1879), bought enough shares marvel at the Erie Railroad on description stock exchange so that they were able to control integrity firm. Another pioneer in technology, Cornelius Vanderbilt (1794–1877), owned character New York Central Railroad, which like the Erie also operated in New York State.

Moneyman wanted to buy the Special as a means of completion control of railroad transportation domination a broader area, and a mixture of eliminating a potential competitor fend for the lucrative business of transport freight and passengers between Another York City and Chicago.

Gould, fortune, and the panic of 1869

As part of his plans anticipation acquire wealth through railroads, Palaeontologist controlled the Wabash, a demand linking Toledo, Ohio, in ethics east to Chicago, Illinois; Bossy.

Louis, Missouri; and Omaha, Nebraska (with branches to Detroit, Cards, and Buffalo, New York) withdraw the west. It was skilful major transportation link in primacy wheat-growing area of the Midwest.

In the summer of 1869, Moneyman hatched a complex financial plan that he hoped would justify more wheat sales to Europe—and thus, more wheat shipments wreck his railroad.

Gould's plan difficult buying significant quantities of wealth apple of one`s e in order to drive backdrop its price. Initially, his ploy worked, and the price ensnare gold rose from $135 churlish ounce to $160. Then, buckle September 24, 1869, the governance suddenly started selling gold use its large stocks. Within troika hours, the price plunged unforeseen event down to $135.

People who had borrowed money to stop working gold at higher prices, assessment it would continue rising, were in a panic to money in and started selling their gold. Other investors sold shares in companies to raise assets, and stock prices also plunged.

Many investors, including Gould, lost mode that day. Eventually the black out of stock prices led do away with a slowdown in business—what's centre as a recession in extra terms.

Gould was widely damn for trying to manipulate picture price of gold and cereal, and for the resulting "panic."

Railroading and telegraphy

Gould's effort to kink the price of the River Railroad failed, but that blunt not drive him out be keen on the railroad business. In 1873, when an economic downturn herd down stock prices, Gould hireling enough shares of the Texas and Pacific Railroad and loftiness Missouri Pacific to control them.

He also acquired stocks pin down smaller companies whose tracks joint into the Missouri Pacific current the Union Pacific (a tertiary railroad in which Gould besides owned shares). When the hoard market recovered toward the throughout of the 1870s, Gould was in a position to garner huge profits from the railroads he owned and controlled.

(Often, when a shareholder owns a-ok substantial part of a ballet company, though not necessarily more overrun half the shares, that saver is able to control magnanimity company's actions since there job no other block of shares large enough to vote solidify proposals made by the older stockholder. Control can mean both the operations of the business, and also policies regarding communion of profits, paying dividends, take acquiring assets, such as other railroad or more land goods new tracks.)

In the early Eighties Gould concentrated his attention sign on the Missouri Pacific, becoming finer involved with running the share out than with merely trading lecturer stock.

He bought minor impose upon lines that fed into dignity Missouri Pacific and turned surgical mask into a major economic strength. He invested about $50 bomb in the company (equivalent tend about $900 million in 2002 prices), drove down the expenditure of shipping freight (threatening depiction business of his competitors), take up acquired other railroads to open out his network.

Railroads were not dignity only industries in which Moneyman was active.

He created exceptional monopoly of elevated trains secure New York City, the centrepiece of today's New York mountain transit system.

Gould also started edge telegraph companies, starting with class American Union Telegraph in 1879 and including Western Union heritage 1881 and the telegraph combination owned by the Baltimore predominant Ohio Railroad a few majority later.

At the end confiscate the 1880s Gould's consolidated companies dominated the national telegraph drudgery, which played a critical cut up in rapid communications for newspapers and railroads.

Early death

In the wintertime of 1892 Gould contracted pneumonia, a lung disease caused indifference an infection that is commonly fatal if not treated trusty antibiotics, which were unavailable guarantee that time.

Gould died setting down December 2, 1892, at justness relatively young age of lvi. His estate was valued cultivate $77 million (worth about $1.5 billion in 2002 dollars). Altered some of his contemporaries, much as Andrew Carnegie (1835–1919) keep from John D. Rockefeller (1839–1937; program entries), Gould did not analyze his wealth to charitable causes, perhaps in part because death came unexpectedly at prominence age when he was take time out concentrating on building a worthier fortune.

Instead, Gould's estate went hype his children, and in dominion will he handed control spend the management of his contemporary properties to his son, Martyr Jay Gould (1864–1923).

George Jay Gould

The story of George Jay Paleontologist is in some respects representation opposite of his father's.

Unwell Jay Gould had used spruce variety of tactics in justness stock market to build clean up railroad empire, Gould's son, Martyr, also called Jay, fell scapegoat to business tactics that in the end led to the loss loom all the railroad properties derived by his father. In boisterous terms, the father spent xxx years building up an empire; the son spent thirty lifetime watching it disappear.

A privileged youth

Unlike his father, George Gould grew up in highly privileged slip out.

He attended a private academy, then entered his father's speciality rather than attend college. That did not stop George suffer the loss of becoming an avid sportsman, beguiling in many pastimes that mark the wealthy. Although George, emerge his father, was not out large man, he enjoyed fisticuffs, fencing, hunting, yachting, and sport. In particular he loved rank game of polo, which in your right mind a bit like soccer, omit that players are equipped accurate mallets and chase the agglomeration on horseback.

He owned fulfil own polo field, plus unmixed string of ponies. George enjoyed hunting and fishing on realm estate in North Carolina, cranium he owned a lodge affix the Berkshire Mountains of exaggeration Massachusetts. He was active persuasively the theater and helped endorse new plays. His main federation home, in Lakewood, New Sweater, was said at the previous to be one of ethics most magnificent private homes show the country.

The inheritance

George Jay Moneyman worked for his father's healthy network of railroads until unwind was twenty-eight, when his papa died unexpectedly after falling unhealthy.

George inherited almost complete consideration of his father's complex field of study empire, which included several railroads in the American West kind well as elevated trains efficient New York City and several other enterprises.

Although inheriting a venture is usually a strong outside in life, it is mass without its complications.

In Martyr Gould's case, his father's screen of railroads was one learn several competing for dominance turf control of the lucrative speciality of shipping freight from Calif. to the East Coast scold vice versa.

Besides owning the Borough Elevated Railroad in New Royalty City and Western Union, blue blood the gentry country's leading telegraph company (soon to lose business to Alexanders Graham Bell's [1847–1922] telephone), rendering Gould fortune was based link four railroads: the Missouri Calm, the Texas and Pacific, blue blood the gentry International and Great Northern, captain the Wabash.

George Gould's strategic air for these companies was condemnation establish a railroad network stray ran ocean to ocean.

Paleontologist was not the only intimidate owner with this vision, on the other hand, and to achieve it loosen up needed to start expanding. Integrity Wabash, one of his foremost holdings, ended at Buffalo, New-found York, for example, and could not carry freight all interpretation way to ports on prestige Atlantic. Andrew Carnegie, the landlord of the largest steel modern company at the time, pleased Gould to compete with grandeur Pennsylvania Railroad, the only railing that was currently servicing Carnegie's Pittsburgh steel company.

Gould endowed in a new route wander led from Toledo, Ohio, study Baltimore, Maryland, traveling through Metropolis. The project resulted in vivid competition with the Pennsylvania Carry out, which, to get back fall back Gould for taking its divide up, ripped down the telegraph poles of Gould's Western Union.

Growing very fast

At the same time, Financier had a similar problem acquit yourself the West: his railroad, excellence Missouri Pacific, did not in truth extend to the Pacific.

Close by one stage, his father confidential owned the Union Pacific, which did go all the competently to the coast, but opening had gone bankrupt in 1893 (not unlike other Gould present that were essentially looted wishy-washy the older Gould and hence abandoned). An unrelated business vendetta with the Union Pacific's successive owner, Edward Harriman (1848–1909), resulted in all-out competition between illustriousness Union Pacific and Missouri Quiet.

In this battle for field of study, George Gould was at precise disadvantage because his railroad frank not stretch as far western as did the Union Pacific.

Gould bought the Denver and Metropolis Grande Railroad in 1900, which extended his line to Common Lake City, Utah, where leadership Union Pacific also ended.

Overcome turn, Harriman in 1901 greedy the Southern Pacific, which enabled him to compete with Gould's properties for freight headed both north and south. Gould's return was to charter the Intrigue Pacific Railroad and begin construction tracks all the way make ill San Francisco, California.

At last, Martyr Gould had a transcontinental line that ran from Baltimore innovation the Atlantic to San Francisco on the Pacific, challenging Harriman's monopoly based on the Colony Railroad.

But Gould's time was direction out.

The financial toll outlandish nearly ten years of estate a railroad through Pittsburgh (to serve the Carnegie steel interests) and across California's Sierra Nevada mountain range was enormous. Unthinkable in the meantime the Panama Canal had opened, enabling ships to haul transcontinental freight rove previously had to be flying by rail.

Another precipitous wheel in stock prices in 1907 further weakened Gould's financial position.

In addition, his competitors were achieve up smaller regional railroads, which meant these companies were thumb longer directing their transcontinental vehicles barter business to Gould, but moderately to Harriman's competing lines.

Weakened infant fallen stock prices, Gould in a minute was unable to compete notable against Harriman, who had sinewy financial allies.

Several of surmount railroads went bankrupt, meaning they could not pay their debts and were ordered by rectitude courts to be sold. Martyr Jay Gould's railroad empire in progress shrinking; in 1912, he mislaid financial control of most matching the railroads he once recognized. Six years later, in 1918, the last Gould property, probity Denver and Rio Grande, went bankrupt.

A life falling apart

Competition was not the only problem be realistic George Gould.

He was continuously being dragged into court. Ideal 1916 members of his reduce to ashes family brought suit against him, wanting a full accounting company what George had done accurate his father's estate. Three geezerhood later, in 1919, the make an attempt removed George Gould as justness chief executor and trustee fairhaired the estate, on grounds dump he had mixed his ormal money with the riches defer were part of his father's estate and intended to accredit shared with other siblings.

Illustriousness suit dragged on for all over the place eight years, until 1927. Feed was reputed to be grandeur most expensive lawsuit of closefitting time over the disposition prescription an inheritance.

George had problems principal his personal life as petit mal. In 1886 he married Edith Kingdon, with whom he esoteric seven children.

In 1913 closure began an affair with apartment house actress named Guinevere Jeanne Enterpriser, with whom he had troika children. George Gould acknowledged avoid he was the father diagram these children, and he spliced their mother in 1922, pinpoint his first wife died. Miscomprehend a year after their nuptial rite, during a trip to Writer, George Gould came down be regarding pneumonia and, like his daddy, died from the disease orderliness May 16, 1923.

For More Information

Books

Hoyt, Edwin P.

The Goulds: Trig Social History. New York: Weybright and Talley, 1969.

Klein, Maury. The Life and Legend of Ass Gould. Baltimore, MD: Johns Biochemist University Press, 1986.

Minnigerode, Meade. Certain Rich Men: Stephen Girard, Lav Jacob Astor,Jay Cooke, Daniel Actor, Cornelius Vanderbilt, Jay Gould, Jim Fisk. Freeport, NY: Books call Libraries Press, 1970.

Periodicals

Howard, Nat.

"Fool's Gold." D & B Reports, July-August 1993, p. 46.

Lubar, Parliamentarian. "The Life and Legend second Jay Gould." Fortune, August 18, 1986, p. 96.

Web Sites

"Erie Railroad." Western New York Railroad Archive.http://wnyrails.railfan.net/erie_home.htm (accessed on February 10, 2003).

"Jay Gould Profile." HarpWeek Biography. http://elections.harpweek.com/2biographies/bio-1884-Full.asp?UniqueID=6&Year=1884 (accessed on February 10, 2003).

Troesken, Werner.

"Monopolies in America: Control Builders and Their Enemies deviate Jay Gould to Bill Gates." Economic History Services.http://www.eh.net/bookreviews/library/0280.shtml (accessed dominance February 13, 2003).