The Life and Legend of Jay Gould
I remember a daughter of Winthrop Chanler, prominent sportsman and socialite of the early years of this century, telling me of a family breakfast in New York in 1910 when she was describing to her father a debutante dinner she had attended the night before. “Who’d you sit next to?” he growled from behind his newspaper. “Young Jay Gould.” The paper fell. “You didn’t speak to him, I hope?”
Such was the reputation in New York social circles of that young man’s late grandfather. Since one is always pleased to have the opinions—or prejudices—of an earlier and stuffier generation overturned, I approached with interest Maury Klein’s purported vindication of the man who managed to seize control of both Union Pacific and Western Union and who died one of the richest and most hated men in the country. I recalled that the distinction used to be made between him and the other robber barons that whereas some of these helped to build America, he simply preyed on weak businesses, slipping slyly into control, watering their stock and passing the inflated carcasses on to a gullible public while he crept away through the small print with his money bags.
Maury Klein has certainly done his homework. Ninety-five percent of his book is made up of close factual analyses of the detailed financial dealings of Gould, from his early days as a surveyor and farmer in Connecticut, through his debut on the stock market, his battle with Commodore Vanderbilt over control of the Erie railroad, his attempted corner of gold in 1869 and his fusing together the railroads, to his death in 1896 at the age of fifty-six, the “master spirit of Wall Street.” If this may prove a bit dry to the general reader, it should certainly interest the student of business history. And it will do none of us any harm to read so convincing an account of the appalling hit or miss way in which our forebears allowed our nation to be developed. But very little picture of either Jay Gould or his adversaries emerges. They seem lost on the blackboards of their wheeling and dealing and become mere instruments of greed and manipulation.
I learn from Klein that Gould was not Jewish, but I had never thought he was. I learn that he loved his wife, though her dowry came at a most convenient time, and his children, though he let them be spoiled rotten. I learn that in his later years he became an enthusiast of French academic painting and a serious gardener. No one ever seems to have understood what drove him so hard—he was always plotting something—but the few who cared for him suspected that he was more interested in success than in money. (Was there a difference?) Here is one of the rare glimpses that Klein affords us of the man:
At forty-three Gould had already fought the wars of Wall Street for nearly two decades, and his body had begun its retreat toward the hollow shell it would soon become. There seemed barely enough flesh to cover even his frail frame. His thinning black hair had receded to expose a high, cerebral forehead and make his large ears even more prominent. The wiry thicket that masked his lower face contrasted with his complexion, swarthy yet tinged with the pallor of one who seldom saw sunlight. There was about his appearance a quality of abstraction, of intellectuality, as if brain had sucked body dry to fuel its own incessant needs. Even his eyes, those dark pools of mystery, confirmed this impression, whether glowing softly or fixed with laserlike intensity or glazed with preoccupation, as if his mind had gone to dwell on some remote place beyond the reach of ordinary mortals.
One wishes there were more such passages. I found myself, with a sigh, being pushed on to the account of the next deal. What is most curious in this biography is the author’s failure to sustain his thesis about the injustice done Gould by his contemporaries and posterity. Their verdict indeed is damning, and Klein quotes profusely from it, starting each chapter with a clip of harsh denunciations culled from biographies and newspapers. But even the reader who knows no facts other than those supplied by Klein begins to speculate that these indignant observers may have had a point.
Klein is lyrical about his hero’s simple rustic background. Of Gould’s mother he writes: “Every spring she reveled in the beauty of the grass splashed blue with violets and forget-me-nots.” How does he know she didn’t have hay fever? And he tells us how bravely young Jay rose above the disadvantages of weak health and a stubby physique:
Instead of bemoaning his limitations or allowing them to beat him down, he responded to their challenge with a superhuman effort. What he lacked in size or strength he compensated for with intelligence and a fierce desire to succeed.
But Klein drops this note of the Victorian hagiographer when he comes to Jay’s business deals. He makes little effort to defend these. If Gould “avoided drink, ate sparingly, did not use tobacco in any form, shunned games of chance, and was never known to utter a curse,” it may have been to concentrate his powers on duping his adversaries.
Here are some sentences descriptive of Gould’s early deals: “If he grew adept at deceiving others, he was careful never to deceive himself.” “It was not that he lacked principles but rather that he had long since learned the knack of doing what the Romans did. In this instance his set of Romans turned out to be a very tough crowd.”
Of the Civil War years Klein says that Gould “had the good fortune to be in the right place at the right time.” The right place, needless to say, was not the battlefield but Wall Street. Indeed the only mention in the book of fighting men is used to describe Gould’s beard at this period: “Like many Civil War officers, he may have grown [it] to make himself look older.”
When Gould went to Albany during the Erie battle it was with a suitcase full of bills. “For three days he wooed legislators with a liberal supply of food, drink, and greenbacks.” Klein, quoting Charles Francis Adams on this episode, describes Adams as “not in the least amused.” Should he have been?
In his accounts of the attempt by Gould to corner gold, Klein has this to say of Gould’s handling of Abel Corbin, President Grant’s son-in-law: “Already he had offered to put $1.5 million worth in Corbin’s name and carry it for him at no charge.” And here is Klein’s defense of Gould’s selling gold secretly while his partner, Jim Fisk, was still buying:
Later it would be charged that Jay saved himself by ruthlessly betraying his closest partner. This accusation not only misreads Gould’s character but overlooks the ingenuity of his hastily improvised plan. If both men were caught in the crash, it would be difficult to salvage anything. If word about the letter leaked out, even to Fisk, it might weaken the resolve to play out the bull movement so crucial to Jay’s plan. Certainly Jay never regarded his actions as a betrayal of his partner, and neither did Fisk. The most telling evidence on this point is the fact that the episode did not ruffle their friendship in the slightest. Jay was playing a dangerous game, but he could find no better one.
But isn’t it possible that the genial, cynical Fisk expected no other treatment from the pal he knew so well? Klein goes on to say that the dispute over whether Jay made or lost money over his gold transactions will “probably never be resolved. It is in fact the wrong question to ask.”[!] Just what the right question would be remains obscure. When Fisk died, assassinated by his mistress’s lover, Jay sobbed, and Klein tells us sternly: “There is no doubt that his grief was genuine and deeply personal.” So? At the end of the Erie struggle, “Erie’s books were in such miserable shape as to be useless in a court of law.”
It seems to be Klein’s thesis that some time after he took over the Erie railroad and manipulated its stock in the interests of his own group, including Boss Tweed, Gould had a change of heart and resolved to be a more constructive businessman. It was then that he took over Union Pacific.
What drove Jay to undertake this task remains an intriguing mystery. It could not have been simply the desire for gain, for there were quicker, less taxing ways of making money. Perhaps the immensity of the challenge appealed to him. Possibly, too, his tarnished reputation had begun to bother him. Although he would never admit to such a concern, he may have seen in the Union Pacific a chance to erase the stigma attached to his name. Whatever his motives, Jay identified himself with the road in a way that transcended his usual ability to weave corporate and self-interest inextricably together. A new phase in his career had opened. He did not leave the market or cease his speculative forays; nor did he confine his activities to the Union Pacific. But he had taken hold of the road, and he did not mean to let it go.
That Gould, Klein contends, was engaged in erecting a business empire eventually became clear, “although its nature and extent eluded the closest observer.” He goes on to admit that Gould may not have comprehended his own dreams. “Like other men driven by demons, he may well have become prisoner of his own momentum.” I indeed agree that Gould was driven by a demon.
The rest of the book describes deal after deal. Every one of them it seems to me is, on its face, subject to any construction about Gould’s motive that the viewer cares to impose. Klein is careful with his caveats; he makes such comments as: “The facts behind the dispute never emerged clearly.” What I do not see is why he feels impelled to make a case for Gould. Here is the summation:
By any reckoning Gould must be counted among the two or three most important figures in the development of the American industrial economy…. No man did more to make the railway map what it is.
All right, what is it—or at least what was it? The way rails were spread all over the country by financiers in cutthroat competition seems hardly efficient to modern eyes. Almost anywhere that one turns in Klein’s descriptions of Gould’s deals one encounters such passages as the following:
It is the genius of financiers and lawyers alike to transform the simplest of propositions into a labyrinth and profit from the bewildered groping that follows. Himself a master of labyrinths, Gould…
These remarkable figures revealed again Gould’s ability to present acts in the most favorable light. He did not remind stockholders that most of the new mileage lay in undeveloped regions that did not yet (and might never) have the earning capacity of more established routes.
The style and content of these remarks were familiar Gould devices of precisely the sort that infuriated his detractors: a mixture of willful pettiness and virtuous indignation, intended to score points in business dispute.
Most observers had conceded Gould’s domination of bridge and terminal facilities since 1881, when he secured control of the St. Louis Bridge Company by threatening to build a new span forty miles above the city. For five years the other lines reaching St. Louis grumbled about the excessive charges and transfer delays imposed by Gould’s control. In 1884 an ingenious maneuver enabled Jay to thwart plans for a rival bridge.
I suppose it is simply that Klein believes that in an age of scalawags, Gould was no worse than the others. But I suspect that he was worse, a little worse, anyway, and I found nothing in Klein’s book to reverse the presumption created by such unanimity of condemnation among his contemporaries. I believe that had Gould never left Connecticut for Wall Street, it would have been a better thing for American business.