Mr. Jay Gould is one among many men in the United States who has built up an enormous fortune solely by the force of his own ability. Beginning life in the humblest circumstances, he has hewn his own path up the hill of financial eminence, until to-day he stands among the wealthiest men in this country, and may yet become the first of them all. Every step of his life has been made in spite of obstacles which would have overwhelmed men of less commanding ability. Not a scheme that he has planned has failed to meet with bitter and determined opposition, but he has broken down every bar to his movements by the power of his own unaided genius. He has been called the Napoleon of finance, and fully merits the name. His combinations have been so vast, his plans so gigantic, his reserve forces so astonishing, and his victories so decisive, that he deserves to be classed with the great commander, who astonished Europe by the rapidity and completeness of his victories.
The accumulation of a fortune which is estimated at from $50,000,000 to $100,000,000 is an achievement which may well excite the wonder of all men. People are prone to imagine that results of this kind are due to good fortune, or, as it is commonly called, luck. The simple story of Mr. Gould's life will show that what he has achieved is due to his keen observation, his foresight, his prudence, and his indomitable energy.
Jason, now Jay Gould, was born at Roxbury, Delaware county, New York, on the 27th of May, 1836.
His father's name was John B. Gould, and his mother's Mary. John B. Gould died in 1866, and his wife died when her son was only ten years of age.
Of his life much has been recently learned through his own statements before the Senate Investigation Committee on Labor and Education. On this occasion Mr. Gould, who is a slight, agile man, appeared dressed in a suit of black diagonal; a heavy gold watch-chain hung from his vest; eyeglasses swung from a silk cord around his neck, his cuff-studs were large, and set with diamonds and rubies; his appearance was greeted with a look of revived interest by the wearied members of the committee. In answer to the query if “he would tell something of his early life?” he expressed the opinion that it “was rather silly to talk about such small matters;” but to gratify them he consented to do so.
He said in substance that his father was a small farmer, who kept twenty cows, which it was his duty to drive to pasture and assist in milking, and he added, “I went about barefooted, and often got thistles in my feet.” He very early became dissatisfied with that sort of life, and asked his father to let him go to school; his father raised some objection, but he went, and then, somewhat later, Jay proposed that if his father would “give him his time,” that he would go away and try and make his fortune. “All right,” said his father, “go ahead.” The lad must have been a somewhat precocious youth, with great self-confidence, to think he could at that age, only fourteen, earn his own living. His father probably expected to see him back in a day or two.
But Jay was in earnest.
He started right off to a blacksmith's—not to work at the anvil, but offering to write up his books, receiving board in payment. A year later he procured a clerkship in the country store of Squire Burnham, working from six o'clock in the morning till ten at night, sweeping out in the morning, and making himself generally useful. It has often been a question how Mr. Gould acquired his first knowledge of surveying. In his remarks before the committee he partially explained it. He had a natural taste for mathematics, and while working all day in the store, used to get up at three in the morning and study, and learned through this means all that books could teach him about engineering and surveying. Thus he had the theoretical part to start with, and he learned the practical by going straight to work at it. Hearing of a surveyor in Ulster county who needed an assistant, he engaged with him “for $20 per month and found.” But there was no money to be had in advance, and his employer evidently meant that he should practice the Napoleonic tactics of making the country through which he passed support him. Mr. Gould says that this sharp man, whom he did not name, gave him a small pass-book, and said to him: “As you get along, get trusted for what you eat and your lodgings, and I will follow after you and pay the bills.” Not liking to do this, for the first two days he paid his way; but his money gave out, and gaining some courage by the third day, he tried to get trusted for a meal, valued at two and sixpence, but the farmer declined to accept his indorser, saying that he “paid no one,” and insisting on young Gould paying for what he wanted; but he really had no money, and turned his pockets inside out to prove it. This rebuff had a very depressing effect upon the young surveyor, “and,” says Mr. Gould, “it seemed to me that the world had about come to an end; I doubted whether I should go ahead or give up. I sat down in the woods where no one could see me and had a good cry.” Then he thought of another remedy against disaster, and he knelt down then and there and prayed. After that he felt better. Not only that, but he determined to “go ahead.” Shortly after he met with a woman, who gave him some bread and milk, speaking kindly to him, and making no objection when he said he “would pay her some other time.” After he had gone on a little way, her husband came calling after him, which alarmed him very much, as he supposed he wanted money for what he had eaten; but he found instead that he only wanted him to “make a noonmark, to tell time by.” Fortunately Mr. Gould knew how to do this, and having the proper instruments with him, it was soon done. “How much is it?” asked the farmer. “Oh, that's all right,” he replied. “No, it ain't,” he said; “the regular surveyor charges a dollar for such work.” “Well, then, a dollar is the price,” was the response. “He gave me,” said Mr. Gould, “seven shillings, keeping back one shilling for the bread and milk—that,” he added, “is the first money I ever earned!” which would certainly imply that he had only received board in payment for his work with the blacksmith, and his clerkship also. The person who employed him in surveying failed to pay him.
It was shortly after this time that he determined to improve upon his baptismal name, and substitute the modern “Jay” for the classical “ Jason,” though the latter, as the prototype of the successful seeker of the golden fleece, would have been eminently appropriate. There seems to have been some special intervention of the fickle goddess Fortune by which this man, afterward to be the greatest of American railroad kings, learned, while a boy, the very science by which railroads are built. The first record of his work as a surveyor appeared in 1856, when Collins G. Keeney, of Nos. 17 and 19 Union street, Philadelphia, published a map of Delaware county, bearing the words: “ From Actual Survey by Jay Gould.” We again hear of his surveying in Rensselaer county at the time of the anti-rent disturbance. The anti-rent people, seeing him at work, at once fancied it was some movement of the enemy to drive them from their farms. They attacked Gould and destroyed his instruments, and he saved himself from serious injury by a masterly retreat.
He next went to Prattsville, Pennsylvania, where he was employed in the tannery of Colonel Zadoc Pratt. This gentleman took an interest in the young man, and subsequently started him in the tannery business, at a station on the Delaware & Lackawanna Railroad, near the place now known as Goldsboro, Pennsylvania. Mr. Gould was then at the age of twenty-three. The town of Goldsboro is said to have been named in his honor.
There have been many different versions of Mr. Gould's first appearance in New York. One story, which he tells himself with great glee, and which is undoubtedly the true one, belongs evidently to a date long prior to his entry into Wall street.
This story is to the effect that at an early age he invented a wonderful mouse-trap, intended to completely revolutionize all known methods of catching the wary mouse. With this he went to New York. There he boarded a car and started to ride uptown. Attracted by the activity of the streets and the size of the buildings, something new to the inexperienced country lad, he went upon the platform of the car to look around him, leaving his box containing the mouse-trap on the seat. When he returned the box was gone, and he was informed that it had been taken by a man who had just left the car. He ran after the man, seized him by the collar, and had him arrested. To his own disgust he was also locked up as a witness. He always said afterward, that his first experience in New York, as a prisoner in the House of Detention, almost prevented him from ever returning to that city.
It must have been about this time that Mr. Gould first met the estimable lady who became the partner of his future successes. At any rate he first saw Miss Miller while he was staying at the Everett House, in New York. The bright, handsome girl attracted his admiration in so pronounced a manner that she noticed it. A little flirtation followed and was succeeded by acquaintance. This ripened into mutual affection, and, without consulting the young lady's parents, they were married. Of course Mr. Miller was filled with righteous indignation at first, but he soon became convinced that his daughter had married a young man of great ability, and that he ought to help him instead of frowning upon him. Mr. Miller was largely interested in the Rensselaer & Saratoga Railroad, which connects Troy and Saratoga. Young Gould was accordingly sent to take charge of this road, which was in an almost bankrupt condition, its securities selling for a few cents on the dollar. Mr. Gould's management saved the company from ruin. He improved the service and rolling stock of the road; managed it so that out of the constantly increasing receipts the debts were paid, and finally put the road on a paying basis. And here, for the first time, the instincts of the Wall street man were shown. When the road had been so improved that its securities were worth many times as much as they had previously been, it was found that Jay Gould owned nearly all the stock. He sold out for $750,000, and went to New York with that fortune as a basis for future operations.
It ought to be noted that the method of Mr. Gould's first stock operation is the one which he has pursued ever since. He bought a railroad when it was almost worthless; he made it valuable; then, seeing an opportunity to put his money in a better place, he sold out and realized an immense profit.
Mr. Gould has himself stated that when the Rutland & Washington Road to Troy was offering its first mortgage bonds at ten cents on the dollar, that he bought them all on credit at that figure, and then became the president, treasurer, general superintendent and owner of a road about sixty miles long. He was then learning the railroad business ; he developed this road, and when it became part of the Rensselaer & Saratoga, he sold his stock at $120 and went West.
When Mr. Gould went to New York he was, of course, wholly unknown. So little is known in Wall street, that none of his personal friends can tell how much money he had at that time. It may be remarked, however, that none of them have any definite notion of how much he has now. His first appearance in the street is said to have been as a “ curb-stone broker,” that is, a man who deals in stocks listed on the Stock Exchange without having a seat, or doing business in that building.
Mr. Gould, in his recent statement, related the profitable speculation which he made in Cleveland & Pittsburgh stock, which for a long time was in a very poor condition. He bought it and put his whole energies into the development of the business of the road, which almost immediately revived and earned dividends; the stock went up to 120, when he sold out after his usual fashion, and soon found another good investment, which was no other than the Union Pacific. The incident which Mr. Gould now turned to his advantage was the death of a large stockholder named Clark, which quite unexpectedly threw his shares upon the market. “About this time,” says Mr. Gould, “ the stock went away down to 15, but I continued to buy it up as fast as it was sold; when, to the surprise of everybody, it rose rapidly, and before long was paying dividends.” One secret of this marvellous advance was the narrator's development of the iron interest on the line of the road and its branches, but no sooner did other speculators perceive that Mr. Gould was making money where they had lost, than a great outcry was raised that “ the Union Pacific was Jay Gould's road,” scenting danger of some kind in that fact, though what the exact cause of the panic was it would be difficult to tell. However the excitement abated when the great financier disposed of his great block of stock, which was soon distributed among some thousands of smaller investors.
How much Mr. Gould was worth when he went into Erie can be only a matter of conjecture; but it is a part of the history of that eventful episode that the company soon owed him $4,000,000, and that he afterward got the money. It is not to be supposed that Mr. Gould sold out his Union Pacific to pacify the clamor of the disappointed. It was the result of a keen foresight that induced him on the 17th of February, 1879, to get rid of his 100,000 shares of Union Pacific stock to a syndicate. The stock had been neglected for some weeks, and sales were rare at from 65 to 69. The common talk of the street indicated that there was no real demand for the stock, and that loans could not be effected on it at a higher valuation than $30 per share—the par value being $100. It was currently reported that Mr. Gould held 190,000 shares. The sales opened on the morning mentioned at 69%, a°d by steady advances.rose in a few moments to 78!. The new life so suddenly imparted to Union Pacific stock, and the ready sales made, even at the increased price, created great surprise on the Stock Exchange and in financial circles, and all kinds of rumors were circulated as to the real cause. The true cause, however, was found to be Mr. Gould's large sale previously mentioned.
Mr. Gould's later ventures have been on the same gigantic scale, and with the same uniform success so far as the world knows anything of them. The purchase of several thousands of shares of Wabash at less than 5 was succeeded by the advance of the preferred stock to 80 and the common to 45. He also bought large quantities of Kansas and Texas at about 8 and increased its market value to 48. All through 1876-7-8 he was buying great quantities of low-priced stocks, and subsequently realizing profits which were simply tremendous.
The hobby of Mr. Gould's life is the Western Union Telegraph Company. There is no doubt that l1e has devoted his best energies to the successful management of that great corporation. He acquired control of it by bitterly opposing it.
He went into the American Union Telegraph Company at its very foundation. He extended its wires to every city of note east of the Rocky Mountains and into the provinces, making a complete system as far as he went, and filling the service with men of experience. Before the line had been in working order twelve months it had become a formidable competitor to the Western Union. In the great rise of stocks in 1879 Western Union sold up to 116. Then Mr. Gould menaced that company openly for the first time. He displaced its wires from the Union Pacific to Baltimore and Ohio and other roads, and substituted the wires of his own company. In one month Western Union dropped from 116 to 88. If the story that Mr. Gould was short 30,000 shares is true, he made $840,000 by the operation. Such a movement, however, would not have been in accordance with Mr. Gould's methods. He probably bought as much stock as he could when the price was low, and laid it away as a corner-stone for those increased possessions which afterward gave him the control of the Western Union Company.
Mr. Gould's next move was to predict a war of rates between his line and the Western Union. The stock of the latter then went down to 95. Then he announced that he was to be taken into the Western Union directory and no war was to take place. Western Union went up to 104. When the day for the election of directors arrived no Gould appeared, and the stock went down again on renewed rumors of wars. The stock of Mr. Gould's American Union line was listed on the Stock Exchange and became an active security. The Western Union directory became alarmed. Efforts were made to get Mr. Gould into the board. These were finally successful, and the result was that in January, 1882, the American Union line was bought in by the Western Union. At the present time the capital stock of the latter company amounts to $80,000,000, of which Mr. Gould owns $20,000,000.
These comprise the principal operations in which Mr. Gould has been engaged since his life in Wall street began. In addition to these he is intimately connected with the foundation and building up of the Texas & Pacific, the Missouri Pacific, the Pacific Mail, and the elevated railways of New York. With regard to the latter he has acted the part of a saviour in time of distress. His arrangements of the payment of dividends, and his substitution of Manhattan first and second preferred stock for stocks of the New York and Metropolitan companies, were a masterpiece of financiering.
There is one passage in Mr. Gould's life which must now be taken into consideration, and which is unpleasant because of the comments which have been freely made upon it. There is little doubt that Mr. Gould was once compelled to resort to extraordinary measures to save himself from ruin by the unfaithfulness of a friend. Envy and malice, which are constant attendants at the successful man's side, have found no difficulty in painting those dark hours in far blacker colors than they deserved. The true story of those days is here told with the belief that those who read will be able to judge with some degree of justice as to Mr. Gould's position.
The historic “ Black Friday,” when men were ruined by scores and fortunes mown down as if by the sweep of a scythe, was September 24, 1869. Jay Gould has been accused of being the central mover in the great combination of operations which preceded this daj-, but a brief history of those movements will show that Mr. Gould was fighting to save himself. He fought like Napoleon, it is true, and swept others out of his way, but he fought to win—and he did win. The history of the events which led up to the great panic and which occurred during its existence, as given in one of the leading newspapers a few years ago, are as follows:
“After the great suit of Erie vs. Vanderbilt, Mr. Gould was chosen president of the road, with James Fisk, Jr., as comptroller. During June, July, August and September, 1868, the capital stock had been increased by 235,000 shares, and stood at $57,766,300. The fresh issue was on the market and the price went down to 44. It was determined by Messrs. Fisk, Daniel Drew and Gould to put the price lower. They, therefore, locked up greenbacks to the amount of $1,400,000. Drew, however, betrayed his partners. He was short of 70,000 shares, and to punish him the combination unlocked greenbacks and sent up the stock. Mr. Drew lost $1,500,000 by the movement. The price of the stock went up considerably further, and in order to protect himself Mr. Gould was obliged to get it down. To accomplish this he bought gold in company with the other members of his clique. Abel R. Corbin, acting for the Gould party, sounded the government as to its probable policy, and announced that it would not sell gold. The clique bought millions. In August, 1869, the price was 131. In September the clique bought $9,000,000, at 133^ to 134. On the morning of Wednesday, September 22d, it held several millions more than there were in the city of New York, outside of the sub-treasury. The price was 141. The clique continued its operations, the details of which are not necessary, in order to force the ' shorts' to cover, and the price continued to rise. During 'Black Friday' week gold went up to 165, and the grand crash came which involved the financial affairs of Wall street in confusion and brought ruin upon hundreds of individuals. It is said that while Albert Speyers, a German broker, who was working for the clique in the gold room, was bidding 160 for any number of millions in gold, Mr. Gould was selling out that which he had already bought through a dozen different brokers. Thus he was preparing for the collapse which he knew must come. Perhaps this looks like something different from fair dealing, but it is only the usual method of Wall street. The morals of the Stock Exchange are not those of the Puritans. Mr. Gould was working in Wall street and he had to use the methods of that street. Every man in the street was looking for an opportunity to treat Mr. Gould in precisely the same way; but here, as in other operations, the keenness of his perception, the vastness of his combination, the cool courage with which he ran risks involving scores of millions of dollars, brought him out of the struggle a victor over the many who were striving to crush him. The price had been pushed up too far. Secretary Boutwell sent word that he would sell $4,000,000 to relieve the stringency of the market. The price fell more suddenly than it had risen, and utter confusion prevailed in Wall street. The ruin was hastened and made more complete by private interference. A broker from James Brown had preceded Boutwell's orders by offering to sell millions at 160. When the despatch arrived, bringing real gold into the fight against the phantom gold, the pressure was too great and the 'bujls' were routed—all but the wary man, and one, perhaps two, of his clique.”
“ I'm so sorry you've bought this stuff; my telegraph is the other line,” and he sighed.
“ I bought it because I thought it cheap. Will it be lower, Mr. Gould?”
“Well,” he answered, “we” (looking at his son George) “ have not a share of it. It ought to be a good deal cheaper.”
“ Then I shall sell twice the amount I hold and hedge. Thank you.”
“The next morning,” adds Mr. Miller, “I did sell; sold right and left, for the whole bottom seemed to be dropping out of Western Union. It kept on tumbling, and by noon I was even. By one o'clock I was almost rich—richer than I had ever been before. / remained a rich man about thirty-Jive minutes ! Then the tide began to set against me. Western Union bounded up with a rapidity that dazzled me, and by the time the hammer fell in the Stock Board I literally had not a car-fare left.” Mr. Miller affirms that at the very time described above “ Mr. Gould had about 200 shares, and was picking it up as fast as he could knock it down.” Comment is unnecessary.
One operation of Mr. Gould's, beyond all others, has interested and excited the public mind, and that is the attempt to buy up successive newspapers so as to get control of the Associated Press; previous to this movement the Western Union Telegraph Company, under the instigation of Mr. Gould, had entered into a contract with the four combined trans-Atlantic cable companies, in which was a clause that “ whenever the messages contained anything affecting the Westwn Union Company, in any way, it would be the privilege of that company to inspect them” and as all foreign messages were to be sent direct to the Western Union main office, this was in effect to give the right of inspection of all cable messages to the officers of Jay Gould; for, how could it be known what would affect the Western Union, unless all were examined? This was a tremendous power to be put into the hands of one man. Some months after the conclusion of this contract, Mr. John Fender, M. P., President of the Direct Cable and of the “ Globe Telegraph” and “ Trust Companies,” of London, visited New York to endeavor to procure a modification of the existing contract. Not specially the above clause, but for the right to receive messages from other sources than through the Western Union, to which they were restricted. Of course, he failed in his mission.
In connection with this peculiar arrangement for securing the first perusal of commercial' correspondence through the Atlantic cables, was the effort made to buy up a controlling interest in the Associated Press Company. This association consists of the seven leading newspapers of New York city, namely, the Herald, World, Times, Tribune, Express, Journal of Commerce, and the Sun. For some time it had been generally understood that the Tribune and World had succumbed to the influence of Mr. Gould's millions, and later the Express was bought up without reserve. Consider now the vast influence which this colossal combination was capable of exerting. Four trans-Atlantic cables! a net-work of telegraph lines over the whole country, and the control of three-fourths of the Associated Press! No wonder that some alarm was experienced, when brokers, merchants, and manufacturers reflected, that if this absorption went on a few degrees further, that the whole country would be dependent upon one man for the color and character of the news it should receive. Fortunately there were papers not to be bought, and one of these, at least, rich enough to withstand all the fascinations of the great financier's gold; able also to procure the laying of an independent cable, if its proprietor saw fit. But the very project shows the audacity of the ambitious mind, which grows with what it feeds upon, until no bounds are recognized within the pale of the possible.
The present wealth of Mr. Gould has been variously estimated. It is common to overestimate the wealth of men of moderate fortune, and to underestimate that of the great millionaires, because as great a show can be made by a man who has ten millions as by one who has fifty. It has been said by many newspapers that Mr. William H. Vanderbilt's fortune amounts to $100,000,000, but persons who are more intimately acquainted with his resources place the amount at three times that figure. Mr. Gould's wealth has been estimated at from ten to seventy-five millions. That the first estimate is absurd is at once shown when we remember he was worth that and more in 1873, and his twenty millions of Western Union stock speaks for itself. That the last is probably too small can be easily proved. In the beginning of 1882 Mr. Gould was accused by the rumor-mongers of Wall street with selling out enormous quantities of his stocks. He therefore called together a number of prominent operators, including Russell Sage, Cyrus Field, Judge Dillon, and others, and openly exhibited to them not only the record of his stock possessions, but the certificates of the stocks. To their great astonishment, they found stocks to the amount of $50,000,000 tied up in bundles, the dates of Mr. Gould's purchases showing that they had been in his possession and never out of it for several years. His bonds were not shown, but he offered, if the gentlemen desired it, to produce “a couple of carriage loads.” This exhibition was succeeded by a powerful bull movement which, if Mr. Vanderbilt had adhered to the programme agreed upon by him and Mr. Gould, would have been one of the most remarkable in the history of Wall street. Now, if Mr. Gould owned all those stocks and bonds at that time, he must certainly have had some money in bank; he has been known to draw and have cashed a check for $2,000,000. If he owned fifty millions in stocks, it is probable that his possessions in bonds were as large; and we may reasonably suppose that Mr. Gould's fortune amounts to $100,000,000.