Why Some Succeed While Others Fail: Jay Gould

We have written the lives of journalists, of eminent statesmen, but we are now going to write the life of one of the most powerful men in America. A man who has far greater influence over his fellow-men than many a king or emperor, and a man who has played a most prominent part in the development of our Republic.

Such a man is Jay Gould to-day who has risen to this dizzy height, from a penniless boy on his father’s farm, which he left at the age of only fourteen to seek his fortune. He asked his father’s permission first, which was readily given, he thinking it would cure the boy of his restlessness, and when young Gould left, his father fully expected to see him again within a few days, but even the father was mistaken in calculating the stick-to-it-iveness of the son. He at last found employment in a store where he remained two years when his health compelled outdoor work. He therefore obtained employment carrying chains for some surveyors at $10 a month. These men were making surveys from which an Albany publishing firm expected to issue maps for an atlas they were getting out. Not only did Gould carry the chains but he improved every opportunity for picking up points in surveying. We see one characteristic of the man plainly showing itself at this early age, for when the firm failed, Gould had the maps published himself, and then personally sold enough of them to clear $1,000. With this start he went to Pennsylvania, and was employed in a tannery. As one sees, nearly every successful man owes that success largely to the cultivation of pleasing manners, so it was with Gould. So apparent was his ability, and so well did he please his employer, that the man set Gould up in business at Gouldsborough, where he cleared $6,000 within the next two years. Gould was not satisfied with this moderate success, fine as it seemed to be; he only regarded these enterprises as stepping-stones to something higher. He next enters the metropolis where he buys and sells hides in a small office at No. 49 Gold street.

About this time Gould met a young lady at the Everett House, where he lived, whose acquaintance was destined to have a marked influence over his subsequent career. This bright, handsome girl attracted his attention so unmistakably that Miss Miller noticed it. A little flirtation took place which ripened into a mutual affection, and they were married without waiting for the parents’ approval, probably Gould knew better, as the young lady, at the time was far above his station in life as society would say, hence acted in this matter as he would in any business transaction he entered.

Of course, this aroused Mr. Miller’s righteous indignation, but he soon realized that Mr. Gould was a man of no ordinary calibre and wisely changed his course toward him. Mr. Miller owned a large interest in the Rensselaer & Saratoga Railroad, and young Gould, after visiting the same, concluded that it could be made to pay. He accordingly bought the entire stock his father-in-law owned, notwithstanding the stock was considered all but worthless. He immediately disposed of all other business, and assumed the management of the road by buying up as much of the remaining stock as seemed necessary to give him supreme control. He at once became Manager, Superintendent and Treasurer. When the stock had multiplied upon itself many times, he sold out, receiving in all $750,000, for his interest. This first scheme illustrates his line of procedure in most of those seemingly mysterious movements which have marked his uniform success; namely, to find some road which was almost worthless and, if he thought good management would bring it up, secretly buy the controlling interest in the line, and when it reached a fair figure, sell. The Rutland & Washington was offering stock at ten cents on the dollar; he at once bought it up and managed it so well that he soon was enabled to sell at 120, making, as most people would think, a fortune.

Cleveland & Pittsburg was for a long time in a precarious condition, perceiving which, Mr. Gould bought up all the stock he could find, and threw his whole ability and experience into the development of the same. The stock soon took an upward move, and when it reached 120 he sold his twenty-five thousand shares. We next see him buying Union Pacific at fifteen. This stock kept falling, but while others sold continually at a sacrifice, and seemed glad to unload at any figure, the lower it went the more Gould bought. After securing a controlling interest as desired, he began to develop the iron industries along the line, which of course soon gave the road business. This and other causes soon set Union Pacific “booming,” and the stock began to rise. No sooner, however, did the disappointed capitalists see their mistake in selling than the cry was raised: “That is Gould’s road and if you touch it you will surely be burnt.” But despite all this the stock gradually rose, and in 1879 Mr. Gould sold the whole hundred thousand shares that he owned to a syndicate. It must not be supposed, however, that Mr. Gould sold to satisfy public clamor—Mr. Gould is not that kind of a man.

How much he was worth when he went into Erie no one knows, but it was no inconsiderable amount. After Mr. Drew’s suit with Vanderbilt, whereby the latter lost seven millions, Mr. Gould was made President of Erie, and the capital stock was increased to two hundred and thirty-five thousand shares, which stood about fifty-seven and one-half million. This brought the price down to 44. It was determined to sink Erie still lower, so Gould, Fisk and Drew locked up greenbacks to the amount of one million four hundred thousand. By a false movement on Drew’s part, which his partners considered treacherous, they accordingly lost, and at once unlocked greenbacks, thereby stock advanced and Drew, instead of gaining, lost one million five hundred thousand, as he was seven thousand shares short. The price of the shares continued upward and Gould was obliged to get it down by some means in order to save himself. He therefore inaugurated a “bull” movement on gold. A. R. Corbin, brother-in-law of the President, Mr. Grant, was selected to sound the government, who reported that it was not intended to put any gold on the market for the present, at least. The clique at once bought millions more of gold than was to be had in the city outside of the Sub-Treasury. Up, up, went gold; 130 is reached, and next 133½, then 134; still the order is buy; buy all that is for sale. The price reaches 144, but nothing daunted, the clique still buy in order to force the shorts to cover; yet on up it goes. Black Friday week is upon them, but Jay Gould is now selling while others are still buying right and left. Of course, he still pretends to buy, but is secretly selling at 165. At last the crash came, when the Secretary of the Treasury sold four millions on the street, and Gould is nearly the only one who is safe. This may look crooked—it certainly is not Puritan, but there are features of Jay Gould’s success which are not praiseworthy; however, we claim there are many things that are worthy of imitation, hence it is here given in detail. He next bought Kansas & Texas at 8 and ran it to 48. He purchased Wabash at 5, and this, under his management, rose to 80 preferred.

Where Mr. Gould has shown the greatest skill in his line, is his connection with the transactions with the Western Union. Desiring to secure control of that company, he went into American Union, and within one year it was a formidable rival, which he substituted for the Western Union wires on his roads, and that company’s stock fell from 116 to 88. If it is true, as stated, that Gould was short 30,000, he must have cleared on this one transaction $840,000. This method is so unlike his usual tactics that we are inclined to disbelieve it; however, his dealings all through, it is claimed, seem to prove it. He next caused a war of rates to be announced between his company and Western Union, and of course, the stock of the latter dropped still lower. The story was then circulated that he was to become a director of Western Union, and no war would take place; up that stock went to 104. But when the day came for the election, no Gould was to be seen, and back down it tumbled. It is reasonably supposable that Gould profited by each of these fluctuations. American Union became a fixed thing, and Western Union becoming alarmed at renewed rumors of war, at once caused Mr. Gould to be seen, and he to-day owns twenty millions of Western Union. His Missouri, Pacific and other lines, together with his elevated railroad schemes, are somewhat familiar topics with our readers.

The career of such a man is a type and a proof of the progress of our land and the boundless opportunities that are open to energy and ability. Jay Gould has attained this dizzy height from poverty and obscurity. Unlike many rich men he is not a “fast” man. He is an excellent husband and father; he is never so happy, seemingly, as when at home sharing the family hearth, while others, who are more widely respected, are at their clubs. Jay Gould has been the subject of much abuse; indeed, what great men have not been? He is often described as a heartless oppressor of the poor and an enemy of his country. These accusations can often be traced to jealous rivals. While he has made millions in the new systems he has opened in the West, our territories and new States have been wonderfully developed and enriched billions of dollars. We honestly believe that the wonderful growth of the Western country would have been utterly impossible but for such men as Gould. If there had not been money in it their energy would have been lacking, and without that energy they must have lain dormant until other capitalists had opened the way to progress. That it takes a vast capital to develop the resources in a new country must be plain to every one. Show me a town which is blessed with men of capital and enterprise, and I will show you a town that is prosperous. Show me a town which has little of either, and I will show you a town in which you would hate to live.

Mr. Gould appears to be a man whom nothing would excite; and one of his brokers says of him: “You never can tell from his expression when he reads a telegram whether he has made five millions or lost ten.” Reticence is one secret of Mr. Gould’s success. He absolutely cannot be induced to say anything which he desires kept. He is on the whole the most incomprehensible of New Yorkers. He is an embodiment of the money-making faculty. It would be a hard question to tell what Gould is worth. I know men who believe that he is to-day the richest citizen in New York. I know others who are confident that he is not worth over one million, and others who are certain that he is on the eve of bankruptcy, but this last is preposterous.

His wealth is, of course, subject to fluctuation, and possibly Mr. Gould himself could not tell its exact magnitude; certainly no one knows, unless he does, what the precise amount is; but the writer would say at least seventy-five millions. Indeed, if the truth was known, we would not be surprised if it would amount to nearly one hundred millions.

He is incessantly engaged in great operations, and these cannot be managed without vast sums. He is determined that no one shall be acquainted with his affairs. Despite this outward immobility, the strain of these colossal operations upon his brain and nerves cannot be otherwise than very wearing. It is said that he is troubled with sleeplessness, and that many of his gigantic schemes are worked out while he is lying in bed awake. Occasionally he gets up at night, lights the gas, walks the floor and tears paper into bits. It may be remembered that Fisk testified on his investigation by the Congressional Committee respecting the transactions of Black Friday, that he observed Jay Gould tearing up paper and throwing the pieces into the waste-basket, and thus he knew that his partner had some work on hand. He scarcely ever smiles and never lifts his voice above a conversational tone. He has no friends so far as known, but a host of enemies.

His life is in great speculations. His greatest crime in the eyes of his fellow-speculators is, that he succeeds so well in doing to Wall Street, what Wall Street is perpetually, but vainly trying to do to him.