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Jay Gould

THE
Wizard of Wall Street
AND HIS WEALTH,

OR

THE LIFE AND DEEDS OF JAY GOULD

BY
TRUMBULL WHITE.

JOHN C. YORSTON & CO., PHILADELPHIA, PA. 1893.

Copyright, 1892,
By MID-CONTINENT PUBLISHING CO.

PREFACE.

The history of any man who had been able to distinguish himself by acquiring in his lifetime the greatest amount of wealth ever accumulated by one man, would necessarily be of interest, even if his success had been won by the most ordinary of methods or the most marvelous succession of good fortune. But when that man is one whose career was full of the most dramatic incidents; when he won his wealth by feats of financial daring which astounded the world; when, in short, that man is Jay Gould, “The Wizard of Wall Street,” then, indeed, the interest is most absorbing. Jay Gould has been more prominently before the people of the country for the last few years than has any other man whose prominence depended upon the magnitude of his fortune. In his history is much to be learned, both for imitation and avoidance, by every American. This volume contains, not only a complete account of the life and deeds of Jay Gould for the general reader, but also much for the student of financial affairs and Wall street methods. The particular effort of the author has been to secure its absolute accuracy and to make it entirely reliable. The present absorbing interest in the career of the great financier, and the fact that every source of information concerning him is being sought most eagerly, makes the work particularly timely.

TRUMBULL WHITE.

Chicago, December 15, 1892.

CONTENTS.

ILLUSTRATIONS.

CHAPTER I.
JAY GOULD A GREAT MAN.

In every walk of human life, in every imaginable human occupation, that man who stands at the very top, who is superior to all others in that particular occupation, is of necessity a great man. No matter how humble that occupation may be, absolute superiority in it, in itself means greatness. The time once was when commercial eminence was considered to belong rather to the lower classes, and was, indeed, despised by those who thought themselves to be of knightlier blood than their fellows. The Crusades, the Renaissance, the discovery of America, and the impetus these gave to voyage and trade and commerce, were potent factors in changing all of this. For the last few centuries, commercial ability, financial capacity, knowledge of how to manipulate men and measures in a way to increase fortune, and so to secure more of what fortune will buy, have been more and more appreciated, until to-day aristocracy and royalty clip coupons, families whose ancestors trace from the Conqueror invest in stocks and draw dividends, and the bluest blooded of all great families engage with avidity in the struggle for business and wealth.

Since royalty and aristocracy thus deign to enter the lists of business competition, does it not become more true that that man is really great, who excels in money-making capacity every other individual in the world, who wins the prize from all his high competitors, and in his lifetime, by his own acumen and manipulation, creates a greater fortune, adds more to his wealth, than has ever any other person in the world? That is what has been done by Jay Gould, “The Wizard of Wall Street,” who has just been taken from the possession of this enormous wealth, and whose death has awakened such universal interest in his life, his history and his personality.

It is hard to realize what an enormous distinction is in the fact of being the richest man in the world. For Gould not only created his fortune, but he made it greater than is possessed by any other individual in the world. It is true that there are families, the Vanderbilts, the Astors, and the Rothschilds, whose aggregated wealth far exceeds the fortune left by Mr. Gould. But no individual of one of those families possesses an amount nearly equal to that represented by the Gould properties. Mr. Gould has been absolutely unrivaled in his position as a money-maker. Though he has met with reverses at times, and was once on the verge of actual bankruptcy, these have been due, in slight degree, to the action of his opponents in the market, but rather to some relaxation of his own energies, or some unforeseen combination of circumstances. The men who have been against him, with few exceptions, have lost while he has won. To be wealthy and to play with the Gould securities, it has been necessary to follow him, not to oppose.

In downright dramatic interest, in its exhibition of results achieved through the exercise of intellectual qualities which were themselves an achievement, and in the examples which it furnishes of the consistent development of traits which can scarcely be considered as the dower of heredity, and yet were already apparent at the outset, the life story of Jay Gould surpasses by far the histories of the great financiers, speculators and railway managers with whom he was either directly or remotely associated in a career which practically embraced the whole modern phase of financial operation. Like Drew, Vanderbilt and Fisk, he was of humble origin and began at an early age to carve out his fortunes on lines which lay far from those to which his youthful surroundings seemed to direct him. But his first exhibitions of independent and original activity were directed toward the acquiring of an intellectual equipment of an entirely different order from that which his great rivals in Wall street boasted. Nothing is plainer than that he was a born money-maker, but it is easily possible that if early success in this direction had not encouraged him to bend his energies solely to the acquisition of wealth, he might have devoted himself not only successfully, but much to his own satisfaction, to higher pursuits. Though he was an absolutely tireless worker in the field of money-getting, one can scarcely study his operations, whether as a mere speculator or as the creator and developer of great industrial enterprises, without becoming convinced that the incitement to many of his colossal operations was quite as much a love for intellectual occupation as for money. Human nature is generally set down as a universal possession, and Mr. Gould was yet a young man when the scope of his financial operations was such as to give clear evidence that the material things of this world were abundantly cared for in his possessions. He had, of course, the instincts of a born speculator, yet his was not the disposition to let results depend simply on the accidental fall of the dice, or the turn of a card. He loved hazard, but he loved better to compel chance to enter the channels he had dug for it. It would be folly to deny the vast value of his work in the development of the Western and Southwestern States, but perhaps as great a folly to attribute a philanthropic or patriotic motive to it.

In a history of the life of such a man as Jay Gould, it is well that certain of his personal characteristics and certain of the chief events of his career be summarized before a complete study of his biography and character is made. It is thus possible better to understand both events and personal qualities.

The education which Jay Gould acquired through his own energies as a youth, found its best application in this work of development. In his purely speculative adventures he was aided by a disposition whose traits, as has already been intimated, were formed in his youth or early manhood. It is impossible to contemplate without astonishment and even admiration, the spectacle of so stable a character as one must admit Mr. Gould’s to have been, fixed in boyhood and remaining unchanged all through a career which extended from a condition of the most modest kind (not to call it absolute poverty) to a position from which practically he ruled the financial world of this continent and materially affected the fortunes of the other. With untold wealth at his command, he was as simple in tastes, as unaffected in manner, as abstemious in habits, as industrious, as self-dependent and self-reliant, as when he set out in boyhood to make himself a rich man. Nor did any of his less amiable characteristics undergo a less change. In some of his first business ventures, can be read the same disposition for silent intrigue, the same secretiveness touching his intentions, the same subtlety and elaborateness of plan, and the same indifference to the feelings or comments of others, as marked the tremendous operations which are the climaxes of his purely speculative career—the war over Erie and the gold operations which culminated in that memorable and deplorable day which is written in history as “Black Friday.”

There was, perhaps, never a time in Jay Gould’s career when it was possible to estimate his wealth with anything approaching correctness. His secretive disposition stood in the way of a general acquaintance with the outcome of his many ventures. Long after he had gained control of the Wabash system of Railways, the Manhattan Elevated and the Western Union Telegraph Company, during a little flurry in Wall street, in which everybody thought the finger of Jay Gould was hidden, but nobody knew, a broker sagely observed, “Mr. Gould has many properties, but a brass band is not one of them.” He never went forth trumpeting his affairs. Moreover, his wealth always consisted of stocks and bonds which were subject to the fluctuations of the market, and which unquestionably derived a considerable proportion of their value from the fact that he controlled the property which they represented. Once, however, he put aside his natural secrecy and made an exhibition of his wealth in order to quiet some annoying reports that were current touching his financial condition. This was in March, 1882, when he spread the contents of his strong box before his astonished visitors.

Mr. Gould’s secretiveness was exhibited quite as strikingly in his benefactions as his speculations. He never achieved a reputation as one in the habit of doing good to his fellowmen, and yet few rich men were more charitable than he. Only once did he forego his customary reticence, and then it was in a time of great public calamity. Yellow fever was raging in Memphis, and subscriptions were being raised in all the large cities of the country. Gould did not wait, but telegraphed to the authorities of Memphis to draw on him for all the money they needed. As a rule, like William H. Vanderbilt, he dispensed his benefactions through a trustee. This, during the last few years of his own life, was Thurlow Weed.

“I am Mr. Gould’s philanthropical adviser,” said this remarkable man on one occasion in 1879; “whenever a really deserving charity is brought to my attention, I explain it to Mr. Gould. He always takes my word as to when and how much to contribute. I have never known him to disregard my advice in such matters. His only condition is that there shall be no public blazonry of his benefactions. He is a constant and liberal giver, but doesn’t let his right hand know what his left hand is doing. Oh, there will be a full page to his credit when the record is opened above.”

It should also be added to the list of his virtues, that he abstained absolutely from spirituous liquors, including wine, and never used tobacco. He was, however, fond of highly-spiced food, and it is said that indulgence in such viands caused the stomachic disarrangements which forced him to devote himself in 1888 to the pursuit of health. He loved flowers exceedingly, and in his country seat at Irvington-on-the-Hudson built up one of the finest conservatories in the world.

Jay Gould’s career was not a colorless one, but was full of episode and variety. He was a genuine American in that he had engaged, before he was out of his teens, in some dozen pursuits, which number he doubled in the next few years. Milking twenty cows in his father’s dairy; clerking in a country store; running a hardware shop; learning the tinner’s trade; working in a country newspaper office, and writing a history of Delaware county, were among his earlier employments. And then came his enlistment in a surveying corps and his experience in map drafting, which led up to the leather industry. This chapter in Mr. Gould’s career is a sensational one. His enlargement of the tannery business in Pennsylvania, his establishment of a village named for himself, Gouldsborough, and of a bank of which he was director, were the business portions of the sensation. The suicide of his partner and the war for possession of the tannery, between two bands of roughs fighting one for Gould and one for his partner’s estate, were sensations of another kind. Next Mr. Gould went into the railroad business, drifting there by the aid of his father-in-law, who wanted to make the best of a marriage which he had opposed. From that time to this, Mr. Gould has been prominently before the public in financial operations, and his history is the history of Wall street. Opinions of Mr. Gould have been just as varied as his own pursuits. There are those who laud him to the skies for the success he had in creating his enormous fortune, and who think him the sum of all good things. There are many others who think of him as being simply a close-fisted, unscrupulous, selfish business man of undoubted ability, but with no thought except to add to his wealth by whatever means might be necessary at the expense of others. And there is another large class of those who consider Mr. Gould to have been a type of all that is worst in Americans, a man who wrecked fortunes and honor of others to add to his own, who purchased legislatures at will whenever he had anything to desire from them, and who had absolutely no redeeming traits of character. It will be our effort to show what justification there may be for each opinion. Whatever other merit may be claimed for this modest biography of a rich man, it is certainly to be considered as entirely fair, with no bias for or against its subject, and no inclination to do anything but justice to his memory. No effort has been spared to secure reliable, accurate and exhaustive information on the history and personal characteristics of Jay Gould. Inasmuch as great influence is exerted on every man’s life by those business associates most closely connected with him, attention has been given to those other noted financiers whose association with the “wizard” have been the nearest. The ever-present influence of ancestry and immediate family make that subject also an essential one to the true understanding of the man. The history of “Black Friday” and its disastrous consequences are treated in full, also the investigation of the Senatorial Committee and Gould’s connection with Missouri Pacific and Western Union. His domestic life, his yacht, his home on the Hudson, his magnificent conservatory, all indications of the spirit and tastes of the man, are also given careful attention.

The early life of such a man must perforce afford an interesting study, and no apology is necessary for a pretty full account of Jay Gould’s boyhood, youth and early manhood.

CHAPTER II.
YOUTH AND ANCESTRY OF JAY GOULD.

Many who knew Mr. Gould intimately are in the habit of asserting that his origin must have been Hebraic. No one pretends to say how many generations back the Jewish blood was in the family, or that Mr. Gould was aware of its existence in him. But both his names, Jason, or Jay, and Gould, served to strengthen this belief in those who held it. The twisted form, “Gould,” was suspected of being changed from “Gold,” which is a common prefix in the names of inanimate and natural objects which certain Jews in Europe were compelled to adopt as surnames in one period of their history. His habits of thought and his extraordinary intellect were both Jewish, these people assert, with how much or how little basis in the actual fact of his origin, no one can ever decide.

Mr. Gould was certainly American in the character and extent of his self-creation and success. Born of poor parents, on a poorer farm, he began to make money to pay his way through school, and he was a partner in business enterprises while yet a lad.

YOUNG GOULD IN HIS FATHER’S DAIRY.

But so far as Mr. Gould himself has been able to decide, he came of Puritan stock than which none is more diametrically removed from the Hebraic. He was born on May 27, 1836, in the little post-village of Roxbury, Delaware county, New York state. Nearly half a century before, while Delaware, Ulster and Otsego counties were yet one, his grandfather came with half a dozen Puritan families from Fairfield county, Connecticut, and took up land near the land which became Jay Gould’s birth-place. This grandfather was Captain Abram Gould. He had been a Revolutionary soldier and was described as a “grim, earnest, honest man.” To him was born in 1792, a son who was named John B. Gould, the first male child born in the new settlement. John B. grew to manhood, was three times married, and Jay was his son by his first wife. The boy’s mother was a pious woman, a regular attendant of the Methodist services held in the “yaller meetin’ house,” where Jay also imbibed such religious notions as found a foothold in a nature not much given to the contemplation of spiritual things. The father was a small farmer and kept a dairy of twenty cows.

Until he was fourteen years old Jay lived on the farm, picking up such a meager education as attendance from four to five years at a district school, which was closed during the greater part of the year, afforded. This school was finally closed altogether by the breaking out of the “Anti-rent War,” as it was called, an uprising of the farmers against the efforts of persons who claimed to have bought the land from the Indians to collect an annual rental. Jay was dissatisfied with farm life, which indeed offered nothing, under the circumstances, to satisfy his boyish ambitions. The reasons of his dissatisfaction he once set forth as follows:

“As I was the boy of the family I generally brought the cows in the morning and assisted my sister to milk them and drove them back, and went for them again at night. I went barefooted and I used to get thistles in my feet, and I did not like farming in that way. So I said one day to my father that I would like to go to a select school that was some twelve or fifteen miles from there. He said all right, but that I was too young. I said to him that if he would give me my time, I would try my fortune. He said all right, that I was not worth much at home and I might go ahead. So next day I started off. I showed myself up at this school, and finally I found a blacksmith who consented to board me, as I wrote a pretty good hand, if I could write up his books at night. In that way I worked myself through this school.”

During these years of the embryo financier, he was a pale, slender, delicate little fellow, studiously inclined and disliking the customary sports as much as the toil of the people around him. It is remembered of him that he was different from the other boys with whom he associated in school. He was not what is generally termed a manly boy. He kept out of the rough good-natured games. He preferred to remain indoors, and at noontime cuddled up in some remote corner of the school-house, busy about nobody knew what. When approached by the others with invitations to come and join them, he would refuse. If in banter the boys attempted to force him to join them, he would make a great outcry, and breaking away from them, would sit and mope until the school was called to order. Then he would go to the master’s chair and enter a tearful complaint against his enemies. The master would thrash the other fellows, and little Gould would be tickled.

It was because his father became unpopular in the village by opposing the anti-rent movement at that time, that young Gould was obliged to leave the school nearest his home. He waited until he was fourteen years old. Then, after pondering over his prospects, he formed a resolution, and at once put it into practice by asking his father’s permission to leave home, saying that he was confident in his ability to take care of himself. His father was inclined to be amused at the boy’s request, which was made with much earnestness, and thinking that it was a mere passing whim, returned a careless affirmative. The family were astounded, however, the next morning, when little Jay entered the breakfast room equipped for his journey out into the world. He ate his breakfast quietly and, arising from the table, held out his hand to his father with a hearty “good-bye, father.” His father was amazed at his determination, and his stepmother and sisters entreated him tearfully to remain at home. Unshaken in purpose, however, the future “Wizard of Wall Street” hastily caught up his little bundle and left his parent’s house. His bundle contained a spare suit of clothes, and he had fifty cents in his pocket.

Young Jay trudged hopefully through the mountainous road between Roxbury and Hobart, where there was an academy that he had long desired to enter. He went directly to the principal of the academy and told him of his anxiety to obtain an education and his desire to get employment that he might earn money to pay the tuition fees. The principal became interested in the boy and secured for him the position of bookkeeper in a store kept by the village blacksmith. This school was kept by Mr. Oliver, and Jay’s course there was completed in 1851. During this year, however, he must have made considerable progress in mathematics, in spite of the fact that it used to be related of him in the neighborhood that he grew tired once of going to school, and was locked up one morning in the cellar by his father as a measure of correction, and forgotten until his non-return in the evening caused comment. The taste for mathematics it was that opened up to him the first steadily lucrative employment in which he became engaged, and also led him, by easy steps, into the career which destiny seemed to have marked out for him.

On leaving school he got a place as a clerk in a tin shop in Hobart, and at fifteen years of age was a partner in and manager of the business. Not only that, but this amazing boy was up at daybreak every day to pursue the study of surveying and such engineering as he found books and instruments to help him to. Moreover, when the elder Gould sold his farm, young Jay took him into the tin shop on a salary.

Innumerable anecdotes are related of Jay’s early life. All the world has heard the mouse-trap story. It was in 1853, when the World’s Exhibition was held in New York, that young Gould, then about seventeen years of age, is said to have made his first visit to the metropolis in which he was to become such a power. He carried with him a showy mahogany case, containing an invention which the boy hoped would bring him fame and fortune. The invention was a mouse-trap. He entered a horse-car and, leaving his valuable model on the seat, stepped outside and stood on the platform, where he could view the glories of the great city. The box was picked up by a thief, but not without the observation of young Gould, who pursued the rascal and captured him. This exploit was related next day in the Herald, this being the first newspaper reference to Gould, whose renown has since filled columns of the daily press for years. The mouse-trap was a success, but its inventor has been far more successful with his future traps, which he laid for speculative mice, and with which he caught them all his life.

That Gould’s great fortune was not the result of a streak of luck, but of strict attention to business and hard work, is clearly proved in all the events of his life. His plans were the result of careful thought and they were carried out by hard work. The man in whose family young Gould worked for his board when going to school thus speaks of his conduct at that early date:

“He was an excellent boy. His habits were good and he devoted most of his evenings to study. He was always the first one up in the morning, and he had the fire burning and the tea-kettle boiling by the time my wife was ready to prepare breakfast.”

It was while working in the tin store, shortly after this, that Gould took part in a transaction in which one cannot fail to recognize one of the distinctive traits of his future business career. If the king of Wall street never went hunting for snipes with a brass band, neither did the country lad. The merchant for whom he was working also did a real-estate business. His employer was negotiating for the purchase of some property belonging to an estate in chancery, and Jay carried on the correspondence for him. By virtue of his position he thus learned the particulars of a bargain which his employer desired to make on the piece of land. The executor demanded twenty-five hundred dollars, but the would-be purchaser offered only two thousand dollars. Jay undertook a little investigation on private account, and became convinced that the property was bound to appreciate in value. While the negotiations were in progress, Jay borrowed twenty-five hundred dollars of his father, and outbidding his employer, quietly scooped in the property. He had the deed made out in his father’s name, and within two weeks sold out for four thousand dollars. It is said that his employer looked at the transaction in the light of a breach of confidence. The result was that it caused a separation between the merchant and his clerk, and broke up a little romance which is said to have existed between the young speculator and a young female member of his employer’s family.

This was practically the end of his life and associations with the little villages, Roxbury and Hobart, though his map work and surveying, in the following years, were largely done in the surrounding counties. As a matter of fact, he had exhausted the possibilities for him in those country villages. He had squeezed what knowledge and profits were to be obtained there, and was ready to seek new worlds to conquer. While the little towns furnished him no inducements for permanent residence, and but little of the start toward his colossal fortune, nevertheless, the influences that the towns and their people exerted on his early life must be credited with much of the better business qualities, of perseverance and method that gave much of his success in later years.

Gould’s mother died in 1841, when he was but five years old. His father died in 1866, and some years ago their distinguished son erected over their graves a handsome monument in the village cemetery. The elder Gould had a farm of about one hundred and fifty acres, and was esteemed by his neighbors as a worthy citizen. The house in which Jay was born and spent his boyhood is described as a “two-story, box-like frame building covered with a coating of white paint.” In July, 1880, Jay Gould visited his birth-place and also Hobart, where he went to school. He used to walk the entire distance to school every Monday morning, returning Saturdays. He was enthusiastically received by the inhabitants at the time of his visit, as the most noted man ever born in that region. When he visited the old house, it is to be wondered if he recalled the first instance in which he ever showed a combative spirit of bravery. It was during the Anti-rent War, when a party of anti-renters visited his father’s house to compel him to cease paying rent, John B. Gould and a neighbor, Hiram Moore, belonging to the conservative farmers, known as “high-renters.” The “rebels” were masked and in bad temper, but John B. Gould stood out stoutly for his rights, while ten-year-old Jay, who stood in the doorway at his side, urged his father to shoot his assailants down. John B., like the son in manhood, was small of stature, and had the additional misfortune of having one leg shorter than the other, but he probably inherited some of the rugged qualities of grim Captain Abram, and these were likely to be accentuated by the struggle for existence in the rough sterile country of their habitation. The vigilance committee, at any rate, left the little man unharmed, though they promptly proceeded to tar and feather his neighbor, Hiram Moore.

These anti-rent troubles were caused by the refusal of the occupants of certain large tracts of land in Delaware and adjacent counties, to pay an annual rental to persons who claimed to have purchased the land from the Indians. Such rentals had been paid with a fair degree of regularity up to 1844, when the farmers rebelled, declaring that the exactions were oppressive and unlawful. In some cases the rent exacted had consisted of so many bushels of wheat, a certain number of fowls or a few days’ labor per year. In other cases cash payments were demanded.

Secret organizations were formed in Delaware county, and some of the aggressive movements were particularly directed toward John B. Gould, who declined to join the anti-rent party. The officers of the law were resisted in their attempts to levy on or sell property for non-payment of rent. The anti-rent men claimed that the land really belonged to the Indians, and they armed themselves and went about the country disguised as Indians. They carried tomahawks and applied tar and feathers to several men whom they accused of persecuting them. Mr. Gould had in his possession for many years one of the tomahawks that was brandished by the Roxbury “Indians,” and he could readily recall the events that preceded and followed the battle of Shacksville, in which a body of armed anti-renters, in resisting a sheriff’s posse, killed several men. Gov. Silas Wright was then obliged to declare several counties in a state of insurrection and many arrests were made. The state authorities overcame armed resistance, but the anti-rent men carried their grievance into politics and succeeded in electing John Young for Governor over Silas Wright.

Mr. Gould used to tell his intimate friends that whatever nerve he possessed he inherited from his father.

While working at the tin shop, young Gould retained all his fondness for mathematics, and mastered several of the best authorities on surveying, trigonometry and engineering, besides reading a course of history. He rose at four in the morning, and devoted the time he could call his own to reading and study. Having made a particularly nice tin whistle, he invited the boys of the town to join him in amateur surveying expeditions, and with a borrowed compass and other necessary instruments, the boys acting as flagmen and chain-bearers, he soon became an expert surveyor. In the tin business he made himself so useful that at the age of fifteen he was a full partner in the concern, and when he visited Albany and New York to purchase material, he succeeded in opening accounts with Phelps, Dodge & Co. and other firms well-known to the public.

It was at this point in young Gould’s career that the unvarying routine of life in a tin shop became too monotonous, and he abandoned it for a pursuit that would at least enable him to see something of the surrounding country, and possibly be more profitable. He decided to make use of the knowledge that he had gained and become a surveyor.

JAY GOULD AS A SURVEYOR.

CHAPTER III.
GOULD AS SURVEYOR AND HISTORIAN.

The tin shop was profitable but slow, and with an outcropping of the avidity which he afterward showed, he sought for something more lucrative. In 1852 he transferred his interest to his father and arranged to take charge of a surveying party at twenty dollars a month. Gould had heard of a man in Ulster county who was looking for an assistant. He was making a map of that county and Gould wrote to him. When he left home to take the position, his father offered him money, but he left all his capital in the store, burned his ships behind him, and took only money enough to pay his fare to the place where the new position was to begin. His new employer started him out to make the surveys, to see where the roads were and to locate the residences. He also instructed young Gould to get trusted for his living expenses along the way, and that he would pay them following after him. Two or three days later, Gould ran against the first objection to this arrangement from one of his entertainers, who knew that the employer had already failed three times. He agreed to trust young Gould but would not trust the employer. The boy wandered on after this rebuff until three o’clock, before making an effort to get his dinner. His wretchedness and its relief are interestingly told in a letter that Mr. Gould wrote to a friend some years later.

“I was out of money—that is to say, every cent I had at my command was a ten-cent piece, with which I had determined not to part. Fall was approaching, and, unless our surveys were completed before winter set in, the final completion of our enterprise would be necessarily delayed until another season, subjecting us to additional expense, which I feared would prove hazardous to the enterprise. I was among entire strangers and consequently without credit. I could not spare time to go to Delaware county after funds, and I had not money to reach there. If tears had been coin my empty coffers would soon have been amply replenished. In this emergency a welcome expedient accidentally presented itself. I was prosecuting my surveys at this time in the town of Shawangunk, and, while the tears were even trickling down my cheek, a farmer came running after me and asked me if I would not return with him to dinner and make a ‘noon mark,’ which is a north and south line, to indicate, by the shadow caused by the rays falling against an upright object and striking the line, the hour of midday. I accepted the invitation with pleasure, as a couple of crackers was all I had eaten since the preceding night, and I had been working since daylight and was consequently hungry and faint. After dinner I made the noon mark, and, turning to leave, the farmer asked me my bill. I replied that he ‘was welcome.’ He insisted, however, on paying me a half dollar, which he assured me a neighbor had paid for one, which I accepted, and started on my way, and had I that moment discovered a continent it would have afforded me less joy. I saw that I could turn this discovery to practical account, and I felt already half rich, and I prosecuted my labors with a lighter step than for many a day. The fame of my noon marks preceded me, and the applications from the farmers were numerous. By this means I paid all the expenses of the surveys and came out at the completion with six dollars in my pocket.”

In the early part of this embarrassment he had no overcoat and sometimes traveled forty miles a day on foot. His employer failed completely and Gould continued the business for himself. Jay proposed to the two other young surveyors, who had also been engaged on the work, to complete it on their own account. The other two young fellows had money, and when the map was ready for the engraver, Jay, finding his colleagues anxious to put their names on it, sold his interest to them for $500. With that capital he undertook similar surveys of Albany and Delaware counties, and was successful in turning out satisfactory maps of those regions. He sold enough maps to bring his capital up to $5,000. The accuracy of his survey of Ulster county in the meantime, had attracted the attention of John Delafield, in Albany, who applied to the Legislature for aid in the completion of a topographical survey of the entire state by Mr. Gould. Mr. Delafield died before any material progress was made in this work. His application to the Legislature was not successful. Some particulars of interest in regard to the map-making business are related by Oliver J. Tillson, one of his partners in the map-making enterprise, after the failure of the man who had first employed him in the business. Mr. Tillson confirms Mr. Gould’s account and tells of the bargain in which the latter sold out to his partners. Here is a copy of a receipt given by Gould on that occasion:

December 27, 1852.

Received of Oliver J. Tillson and Peter H. Brink ninety dollars and wheel in full of all debts and demands and dues against them and the Ulster county map.

Jason Gould,
for John B. Gould.

It will be observed that he signed his name “Jason,” not Jay. He was christened “Jason,” but about this time began to change it to Jay, by which he was ever after known. “There wasn’t any foolishness in Jason’s books,” says Mr. Tillson, referring to the books in which Gould had made his notes of the surveys. “He was all business in those days, as he is now. Why, even at meal times he was always talking map. He was a worker, and my father used to say: ‘Look at Gould; isn’t he a driver?’”

CANVASSING FOR HIS BOOK “HISTORY OF DELAWARE COUNTY.”

This, in fact, is the testimony of all his contemporaries. From his earlier years he was absorbed in schemes for making money, and his whole aim in life was to “get on.” With every passing year his ambition broadened, until it enveloped a continent.

It is a striking coincidence that young Gould and his two partners in the map business were sued by the man who first employed the former in the project, and they placed their case in the hands of Lawyer T. R. Westbrook, who succeeded in having the suit dismissed. Westbrook afterward became (and this is the coincidence) the supreme court judge, who years after scandalized the legal profession by holding court in Jay Gould’s private office and issuing an order in one of the Manhattan railway litigations.

He and his cousin, with whom he entered into partnership at Albany, increased the map business to the extent of sending surveyors into various portions of Ohio, Pennsylvania and Michigan, but afterward the contracts were transferred to a surveyor in Philadelphia.

From this time he was continuously employed as a surveyor, until a severe attack of typhoid fever compelled him to give up outdoor exposure. He had determined to make a complete survey of the entire state of New York, and he did complete maps of Albany county, the village of Cohoes, the Albany and Niscayuna Plank road and Delaware county. He also surveyed Lake and Geauga counties in Ohio, Oakland county in Michigan, and a proposed railroad from Newburg to Syracuse. Then he was seriously ill for several months, but his money was not used up, and he wrote with some degree of interest and also profit a history of Delaware county and partial histories of Greene, Ulster and Sullivan counties.

Gould had gathered his ideas of casual writing from a brief experience in a country newspaper office, where he had worked gratuitously. The history of Delaware county was four hundred pages long, and is said to have been an exceedingly creditable performance, both as an example of diligence and care in the collection of facts and skill and taste in the literary presentation of them. It never came into general circulation, however, probably because the printer, who lived in Philadelphia, insisted, in spite of “copy” and proof corrections, in spelling the name of the author “Gold.” When the books arrived in Roxbury and the young historian discovered the blunder he shipped them all back to the manufacturer and would have nothing more to do with them.

Gould’s taste of money and profits had acted upon him almost as does the taste of blood to a lion. By this time he was making enough money to furnish himself a realization of what money could do and to make him want it with an insatiable desire. His child life had been a short one, and he was a man in business and responsibility at an age when most persons of no greater age are considered to be but the merest children. And what there was of his child life had been cold, and not of a character to teach him, what few yet know, that money is the least important thing in the world. All his life he had felt the lack of it. He had been needy. He had been compelled to struggle to supply his physical necessities, and then at times they were but scantily supplied. One favorite sister, his elder one, who was his first teacher of mathematics, was almost the only person whose recollection at home was any delight to the boy and young man. So, now that his well-applied and earnest labors have brought fruit to the extent of several thousand dollars of cash capital available to him, it is not strange that he sought for some enterprise in which the profits would be certain and large. This opportunity opened before him and he grasped it.

It is very doubtful if, at that period in his career, young Gould had ever read the works of Shakespeare, but be that as it may, he followed that great bard in the opportunity which was now his. Shakespeare says:

“There is a tide in the affairs of man

“Which, taken at the flood leads on to fortune.

“Omitted, all the voyage of our life

“Is bound in shallows and in miseries.

“On such a full sea are we now afloat,

“And we must take the current when it serves,

“Or lose our ventures.”

Gould’s tide was in; it was turning, and the chance of his life was waiting to be taken. It was this same faculty of being able to recognize what was the right thing to do, that all his life stood him in good play. He recognized it now, and changed the whole current of his life.

The lessons to be learned from this early period of the life of the one who was in future time to be the “Wizard of Wall Street,” are not in anything obscure. Unceasing vigilance and unflagging energy were the qualities that were most prominently developed in him from his very youth. These qualities properly directed and controlled, are in this age bound to win success for any young man. Gould never lost an opportunity to make more money by increased efforts. He was not afraid to assume any amount of extra work if he saw in it a just amount of remuneration. From the time when he left his father’s house and started out into the world to take care of himself and make his own living, there was never a man with whom he came in contact who did not consider the young fellow a valuable person to have attached to his business. Gould always made it a point to prove himself valuable. He made his employer’s interests his own, and was always ready for whatever appeared necessary to be done. In all of this, his example is most worthy of emulation. And while it is not to be expected that the same efforts will bring to every one equal results, one may rest assured that they will amply repay for their adoption.

THE TANNERY WAR IN PENNSYLVANIA.

CHAPTER IV.
GOULD AND THE TANNERY WAR.

From the mildly humdrum life of school boy, tinker, surveyor and bookseller, Gould’s career now changes to an intensely dramatic period. While pursuing his avocation as a surveyor, he made the acquaintance of Zadock Pratt, a local celebrity who lived at Prattsville not far from Roxbury, for whom he had done some surveying. Pratt is described as an ignorant man who had amassed what at that time and in that section was considered an immense fortune. He was worth a hundred thousand dollars, and had the largest tannery in the country. He had also been to Congress, and, as is usual with such district nabobs, he was a very vain man. How he happened to become attached to Jay Gould does not appear. Mr. Gould himself once said: “While I was carrying on these surveys, I met a gentleman who seemed to take a fancy to me.” Zadock Pratt was a famous man in his days. He was not only the biggest tanner in the country, but he was also a power in the politics in the state. During his ten years’ service in Congress, at least one of his speeches attracted widespread attention. He was one of the earliest advocates of cheap postage, and he moved the establishment of the Bureau of Statistics, which has since developed into the Department of the Interior. He also moved the first survey of the Pacific railroad line. When he ceased his Prattsville tannery in 1845 he estimated that in twenty years he had used one hundred and fifty thousand cords of bark and wood, had employed thirty thousand men, had cleared twelve thousand acres of land and tanned over one million sides of sole leather. He was, however, nearly seventy years old when he interested himself in Gould. The latter was fortunate in obtaining the confidence of this man. The history of his association with Pratt, and later with Leupp, is not contained in legislative and law reports, as are other portions of Gould’s career, but there are several very circumstantial accounts extant based on the testimony of eye-witnesses, some of whom may still be living.

One story has it that the young historian had artfully flattered Pratt in his “History of Delaware County,” and so won his good opinion. However this may be, certain it is that Pratt asked the young man who had surveyed his place in Prattsville to embark with him in the business of tanning leather. Gould agreed and immediately demonstrated his capacity for managing the new venture by going over the Delaware and Lackawanna railway, then recently completed, into Pennsylvania, on a search for a site of the proposed new tannery. He found a large tract of land growing hemlock in Lackawanna county and reported the fact to Mr. Pratt. Soon after he started for the hemlock woods again, and this time he made contracts of purchase with their owners. In his next expedition into Pennsylvania he took fifty or sixty men with him to build the tannery. The site chosen was in the midst of the forest, fifteen miles away from the nearest village. The men took with them a portable sawmill. Gould went in and chopped down the first tree which was sawed up, and transferred it into a blacksmith shop, under the roof of which Jay Gould passed the first night, sleeping on a bed of hemlock boughs. Thus the tannery, “a very large one, the largest in the country at that time,” to use Mr. Gould’s own words, was built. Near it there soon sprung up a village which was called Gouldsboro, and in this village Gould established a bank of which he elected himself director by means of proxies obtained from relations whom he had persuaded to take stock.

Pratt was taken with young Gould’s snap and energy and considered him just the kind of material to use in pushing a new enterprise. Pratt furnished all the capital and Gould conducted the active operation. The capital of the firm was $120,000, and the tannery at Gouldsboro, Pennsylvania, became the biggest concern of its kind in the country. Gould threw the whole energy of his being into the enterprise. Pratt made occasional visits to Gouldsboro, but the business was left practically in Gould’s hands and it grew rapidly. After a while Mr. Pratt became dissatisfied with the condition of affairs. Apparently a rushing business was being done from which there was no adequate return. After awhile, Mr. Pratt having invested $55,000, sent an agent to Gouldsboro to investigate affairs.

The books seemed to be so mixed that it was quite impossible to ascertain just how the firm stood. Gould soon saw that his partner was becoming suspicious and determined to be ready for him. On the growth of the business Gould had, of course, occasion to frequently visit New York, where he became acquainted with most of the merchants in the “Swamp,” then, as now, the center of the leather trade. Among others, he became acquainted with Charles M. Leupp, a merchant of the old school, honorable and correct in all his dealings. He was a man of great refinement and of poetic temperament, and possessed many literary and artistic tastes. He was a man of wealth and owned a fine mansion on the corner of Madison avenue and Twenty-fifth street. This mansion is still standing, but has been altered into an apartment house. In Mr. Leupp’s time it was probably the handsomest and best constructed private dwelling in the city and cost about $150,000.

It was an evil day for Mr. Leupp when Gould came to him and proposed that he advance the money to purchase Mr. Pratt’s interest in the tannery. That was the beginning of Mr. Leupp’s troubles, but at that time he considered the proposition an advantageous one and he consented to advance the cash. Gould never seems to have had at any period in his career any difficulty in interesting the wealthiest and most powerful men in his schemes. He has himself said that it is just as easy to obtain the acquaintance and secure the friendship of the most powerful as of the most insignificant if only one will set about it in the right way. Well, Gould returned to Gouldsboro with Leupp’s backing. He found Pratt looking over the books and puzzled by their intricacies. He discovered that Gould had started a private bank at Stroudsburg in his own name, and he became suspicious that the firm’s funds were used in the bank. Pratt then demanded an explanation and finally threatened to close up the tannery and dissolve the partnership. Gould protested that this would ruin him, when Pratt said that he must buy or sell. This was what Gould was waiting for, and he told Mr. Pratt to make him an offer. Pratt gave his energetic young partner the choice of two alternatives, either to take $10,000 for his interest in the business and retire from the firm, or pay $40,000 for the interest of the senior partner. Gould got ten days’ time in which to make up his mind, and at the expiration of that period surprised Mr. Pratt by buying him out on his own terms.

Of course he drew on Leupp for the money. This made Gould a partner of Leupp with full powers. He continued with Leupp the policy he had begun with Pratt. He branched out in many speculations in Leupp’s name, but without his knowledge. It is said that he bought another tannery, attempted to get up a “corner” in hides, and in other ways entered into many hazardous enterprises. He continued to draw on Leupp for money and to display his incapacity as a bookkeeper until Leupp became suspicious, just as Pratt had. Meanwhile the panic of 1857 had swept over the country and unsettled all business operations, and when Leupp discovered the extent in which he had been involved in Gould’s speculations he thought that he was ruined. He went to his magnificent home one night and, in a fit of despondency, shot himself dead. It is not certain but that Gould’s schemes would have turned out all right, and to Leupp’s, as well as to Gould’s advantage, but it is a fact that Leupp’s partners and heirs have always felt very bitter against Gould, and could not help believing that he was indirectly the cause of Leupp’s sad and untimely end.

Mr. Leupp’s old-fashioned notions had been terribly shocked, for Gould had gone into corners in hides and other tanneries which might and might not have turned out well. When he found that his partner had bought not only all the hides then in the market but all that were to arrive in the ensuing six months, he literally lost his reason, and his suicide occurred after a stormy interview with Gould, who remained imperturbably cool and simply turned on his heel and left the office.

It is related that in the excitement and passion of Black Friday when a mob surged through Wall street, a voice was heard above the tumult shouting the awful question:

“Who killed Leupp?”

And the answer is said to have come from a hundred throats:

“Jay Gould!”

Prior to the fatal shot, Gould had arranged with Congressman Alley, of Massachusetts, to take the works and thus relieve Luepp and Lee, who was also a partner. But the suicide of the senior partner stopped the final consummation of this plan, and, Gould always insisted, stopped the way to a profitable continuance of the works.

Mr. Gould then negotiated with Leupp’s daughters for the control of the tannery. It is stated that they demanded sixty thousand dollars, the amount Leupp had originally advanced. Gould agreed to this, but proposed a plan by which the payments should extend over a term of years—ten thousand dollars cash and a like amount every year until the entire indebtedness had been liquidated. When the papers were drawn up it was found Gould had made no provision for paying interest. Negotiations were broken off, and Mr. Lee, a relative and partner of Leupp, hastened to Gouldsboro and took possession of the tannery in the name of Leupp’s heirs, taking the precaution to hire a lot of men to help him barricade and guard it. Gould arrived a day or two later and determined to capture the tannery at all hazards. Gouldsboro was a village of about three hundred inhabitants, situated some distance from the railway station, and besides the tannery the most important building was the hotel. Mr. Lee, who, like Mr. Leupp, is described as an honorable, warm-hearted man, but with more courage and grit, had the tannery guarded by about thirty or forty men whom he had hired at Scranton.

Gould, as soon as he arrived, began active operations. He interested nearly the entire population of the place in his behalf. They knew him and Lee was a comparative stranger. Gould told every one he met that he owned the tannery, that Lee and his cutthroats were endeavoring to get the property away from him, and that if they succeeded the business would go to wreck and ruin and the place would suffer a big loss. He had soon an armed gang of about 150 men around him prepared to fight for him. They were a tough looking set of men. He took them to the hotel, where he gave them an oyster supper, and then mounting an empty box addressed his forces, telling them to use no unnecessary violence, but to “be sure and get the tannery.” This was probably the first and only speech Gould ever made in all his life. Filled with oysters and whisky, the men made a determined charge on the tannery, Gould directing everything, but prudently keeping in the background, for he heard that Lee had a loaded musket ready for him. The battle was fierce but short. The barricaded doors were battered in and Lee’s men were driven from the tannery. Two men were badly wounded. One of Lee’s party was shot through the breast. Warrants were issued for the arrest of all concerned. Many of the men fled from the place never to return. Those arrested were afterward released on bail. Gould was left in possession of the property, but it did him little good. Lee began legal proceedings against him and Gould brought counter-suits, and this litigation was continued until the business was destroyed and the tannery abandoned.

In the New York Herald of March 16, 1860, is given the following account of the battle:

TANNERY INSURRECTION IN PENNSYLVANIA.

BATTLE BETWEEN THE FORCES OF THE SWAMP LEATHER DEALERS—
THE LEUPP AND LEE TANNERY, IN GOULDSBORO, ATTACKED
AND DEFENDED—SIDES OF LEATHER USED FOR BREAST-
WORKS—INSURGENTS TWO HUNDRED STRONG—
THE TANNERY TAKEN—FLIGHT OF THE
DEFENDERS—WOUNDED
FOUR.

About half-past ten o’clock on Tuesday morning the lock was wrenched from the stable, the men having been concentrated into the tannery and the stable being unguarded. A little past twelve the tannery itself was attacked by a mob variously estimated at from one hundred and eighty to two hundred and fifty men, armed with axes, muskets, rifles and other weapons. Without a demand of possession or summons to surrender, the doors were beaten in, and but a few blows had been struck by the assailants before they began to fire ball and buckshot through the building, raking it in every direction. As vigorous a defense was made, by a force of fifteen men in the story attacked, with tannery sticks, stones and four revolvers, as was possible against such overwhelming odds. The tannery was finally carried on all sides, and those who did not escape were violently flung from the windows and doors, while the assailants rushed through the buildings, yelling like Indians, pursuing the fugitives with their guns in every direction. In the action many contusions were received and four gunshot wounds, and had it not been for the large number of sides of leather hung up the lofts, very few of the defending party would have escaped without wounds.

Mr. Jay Gould, in his version of the affair, in which he endeavors to exculpate himself, says:

“I quietly selected fifty men, commanding the reserve to keep aloof. I divided them into two companies, one of which I despatched to the upper end of the building, directing them to take off the boards, while I headed the other to open a large front door. I burst open the door and sprang in. I was immediately saluted with a shower of balls, forcing my men to retire, and I brought them up a second and third time and pressed them into the building, and by this time the company at the upper end of the tannery had succeeded in effecting an entrance and the firing now became general on all sides and the bullets were whistling in every direction. After a hard contested struggle on both sides we became the victors, and our opponents went flying from the tannery, some of them making fearful leaps from the second story.”

After this depreciation of value in the tannery property, Gould’s ready resources were so exhausted that it is related that he had to borrow the money to pay his railroad fare to New York. It is probable that no man in this or any other country has ever been a party to so many lawsuits as Gould. From the time of the contest over the map business there was scarcely a day during his whole life that he did not have some litigation on his hands. This ends the early chapters of Gould’s life. He now entered upon that career in the metropolis which has made his name familiar around the globe.

It is doubtful if many young men, before the age of twenty-four years, have passed through as many and as varied experiences as these of Jay Gould. All his training now for several years had been in the line, first, of competition with others in the same business as his own, and then in direct conflict and war with those who had been his associates. He had learned not only to conquer his enemies, but to conquer his friends. He had thoroughly developed and made apparent to every one who came in contact with him that spirit that remained with him through all his life, the mania for the aggrandizement of his own fortune, no matter whose money must be lost for him to gain it. The last chapter of his tannery experiences was a dark one, and there is nothing in it to be held up for admiration by any one, but rather as an example of the first notable evil in the nature of financial wrecking of the many that are found in a complete retrospect of his life. Gould himself always realized the discreditability of his actions in the tannery matter, as is evidenced by the way in which he tried to smooth it over before the investigating committee ten years later. As a matter of fact, he probably realized and recognized whatever else he did that was evil in his far greater financial operations during the next three decades, but if he did, he gave no sign nor did he ever indicate that he had any regrets in his career.

GOULD’S FIRST GLIMPSE OF HIS FUTURE WIFE.

CHAPTER V.
GOULD’S ROMANTIC MARRIAGE AND HIS FIRST RAILROAD.

When Jay Gould reached New York in 1860, after the tannery war, he was almost impoverished. He settled down at the Everett House, a comfortable hotel, and there he lived for a little time while waiting for something to turn up. Gould was not very busy just then and used to wander around the city, up town and down town, through Wall street and Lower Broadway, where in later years he became such a power; maybe, even then, wondering if he would ever reach the point in wealth and influence that belonged to the men he met, and figuring, as every one does at times, what he would do if he were a millionaire. He knew the tannery business thoroughly and had many influential acquaintances in “The Swamp,” which was the seat then, as it is now, of the leather trade in New York. But he most wanted to get into the railroad business. He believed that greater opportunities were there than in any other occupation for the acquiring of wealth and influence. So he bent all his energies in that direction.

One day just before the war, Gould came walking down the street toward his hotel, and looking up toward the window of the parlor, he saw seated there, looking toward him, a most charming young lady. He was not by any means inclined toward flirtation, but he could not avoid an appearance of interest in her, and he passed on into the hotel. Soon after that the same episode was repeated. By a little investigation, Mr. Gould learned that the young lady was Miss Ellen Miller, whose father, a wealthy New York merchant, was a member of the grocery house of Philip Dater & Co. She lived in a house across the street, and a delightful flirtation with the girl whose pretty face appeared at the window preceded any formal acquaintance. Circumstances, however, permitted them to meet socially, and they became excellently well acquainted. After a few weeks, the acquaintance became more and more intimate and finally ripened into love. Miss Miller’s father indicated opposition to their marriage, their desire for which they made evident, and they were compelled to seek some roundabout way to accomplish their purpose. The result was, that after trying several ways to circumvent the unsympathetic parent, they decided upon a secret marriage, and this was actually accomplished. There were no runaway features about the match, except that to avoid the opposition that they were certain would come, they simply walked to a minister’s, a short distance from their home, and were married without letting any one know of it. When they returned, Mr. Miller indicated no ill-will at their action, and went to work to make the best of it all. He did this by giving the famous financier his first introduction into the railroad business. Mr. Miller owned some shares in the Rutland and Washington railroad. He asked his son-in-law to look the property over and see if anything could be done to save the investment. The road was sixty-two miles long, running from Troy, New York, to Rutland, Vermont. The panic of 1857 had left this road in a demoralized condition, and Gould found that he could buy a majority of the first mortgage bonds at ten cents on the dollar. He had now found the true field for his peculiar talent. He made himself president, treasurer and general superintendent of the road, studied the business of railroading on the ground, developed the local traffic, and finally effected the Rensselaer and Saratoga Consolidation. By this time, both bonds and stocks were good and he sold the latter for one hundred and twenty dollars.

There has been no time when it was possible to estimate the wealth of Mr. Gould, and as he was secretive in those early days as in his later, there was no saying what he was worth when in 1860 he came into Wall street. One statement has it that when the firm of Smith, Gould & Martin was organized, Mr. Gould’s possessions amounted to thirty thousand dollars in cash. Another is that when he sold out his holdings in the Rensselaer and Saratoga Consolidation, he was worth seven hundred and fifty thousand dollars.

With a mind peculiarly alert to all the influences which affected the values of railway securities, with habits of great industry, with phenomenal tenacity of purpose, with a fair amount at least of capital to back him, it is not surprising that Mr. Gould profited largely by his speculation in railway stocks and gold during the war of the rebellion. The keen-sighted, intelligent men in “the Street” at that time nearly all made money, and Mr. Gould was at least a millionaire when the Confederacy fell. What his methods were at the time it is useless to speculate about. It was before the day when by absolute mastery of gigantic railway and telegraph systems he could at his will depress the value of almost any institution on which he fixed his eye by setting on foot a ruinous war in rates until he had made it to be his own interest to restore a more normal and healthful condition of affairs by ceasing his antagonism and building up the property which he had acquired cheaply during the period of depression. But the details of his operations were always so subtle as to be shut out from the discovery of either friend or foe.

Gould was now fairly on the way toward his colossal fortune. Though friends warned him against entering into the whirlpool of blasted hopes and ruined fortunes of Wall street, his inclinations in that direction were too strong to be resisted. Gould was a born speculator. It is true that his great fortune was created mainly in hazardous enterprises outside of Wall street, and that in stock speculations, pure and simple, he was not always so successful or so infallible as many have supposed, but by nature and habit Gould was at this time of his life a commercial gambler, and it was as natural that he should enter Wall street as for a duck to take to water. It was in 1859 or 1860 that Gould first entered Wall street. It was not very long before he stepped to the front rank. What a long list of brainy and courageous men do Gould’s contemporaries in the street make! With most of them Gould has been at sword’s point, with a few he has been an ally, with some he has been both ally and enemy. Most of them are no longer powers in the speculative world. Some of them are dead. Not a few have been overwhelmed in the swift, resistless torrent of stock speculation. Three or four yet remain with power in their hands and millions in their vaults. The Vanderbilts—the commodore, his son and grandsons—Daniel Drew, James Fisk, Jr., the Beldens, Commodore Garrison, Henry N. Smith, James R. Keene, William Heath, George I. Seney, Gen. Thomas, Calvin S. Brice, D. O. Mills, Horace F. Clark, Alfred Sully, Addison Cammack, C. F. Woerishoffer, the Rockefellers, S. M. Kneeland, C. J. Osborn, D. P. Morgan, H. S. Ives, C. P. Huntington, Russell Sage, Cyrus W. Field, John W. Garrett, Robert Garrett, J. P. Morgan, the Seligmans, Brown Bros., Jay Cooke, Hugh J. Jewett, Lathrop, Little and Austin Corbin, Henry Clews, Washington E. Connor, Burnham, Gen. E. F. Winslow, Edward S. Stokes, S. V. White, William Dowd, Solon Humphreys, William R. Travers, Rufus Hatch, Samuel Sloan—these were some of the men identified with various Wall street interests with whom Gould has been allied or at enmity, or both, during his long career in the street. That he has been able among all these financial giants to make himself the leader is the highest evidence that can be given of his genius in speculation and railroad financiering. As we read some of these names there arise before our eyes the visions of murder, of suicide, of bankruptcy, of the debtor’s prison, of the felon’s cell, of ruined fortunes and blasted reputations. Others of the men have achieved wealth and honorable names. It is interesting to note that at the time Gould first entered the street one of his fellow-boarders at the Everett House was James Gordon Bennett, the elder, with whose son and successor he became engaged in such bitter business and personal antagonisms.

Gould not only gambled in Wall street, but he defended the operation. “People,” he told a State Senate Committee which was investigating into stock and grain corners, “will deal in chance. Your minister, doctor and barber all have the same interest in speculation. Would you not, if you stopped it, promote gambling?”

Jay Gould was twenty-three years old when he went into Wall street as a broker. In addition to whatever amount of money he had, he had the confidence of two or three large capitalists, which is the best capital of all for beginning a business of speculation. He started on his Wall street career in a small office and frequently took his stand with the “curb-stone” brokers. He made money right along. In 1860 he became intimately acquainted with Henry N. Smith, who was then one of the big men in Wall street. Soon the firm of Smith, Gould & Martin was formed and it was prosperous from the start. Gould made a careful study of the railroad situation and became an expert in the manipulation of railroad securities in the speculative market. He paid the closest attention to business, allowing himself few of the social pleasures of which young men are usually fond. He had no small vices, being a teetotaler.

During the war of the rebellion, the firm did a large business in railway securities, and also made a great deal of money speculating in gold. Gould had private sources of information in the field, and he was able to turn almost every success or defeat of the Union army to profitable account.

At last Gould had found his exact niche, the corner in which the railroads were put away. That “corner” was ever after the one in which he found both his labor and his recreation, his fortune bad and good. He was a natural railroad magnate. Almost always he won, and when he did not, it was simply because he attempted schemes that would have seemed to any other man entirely beyond possibility. From this time his history never loses its intense dramatic interest and never goes back to the humdrum life that he had abandoned. From this time, there could be no night in which Jay Gould could sleep in dreamless rest, with no thought of the morrow. From this time, there could be never a day of freedom from the intensest strain of business anxiety. He had chosen speculation for a life work, and its cares must sit upon him. His could not be the experience of the man in mercantile life, or of the man of smaller affairs, who finishes his work in the evening and goes to his home with never a thought of the cares to-morrow will bring. Great enterprises make great responsibilities. From this time the enormous weight of the responsibilities upon Jay Gould’s shoulders could never again lessen.

Did he ever, in those years of scheming and fighting for wealth, cast his recollection backward to the old days at Roxbury, when he was but a barefoot farmer’s boy, with nothing more oppressive on his mind than the necessity to go through the rain for the cows, or to find the nest that the blue hen had hidden away some place in the hay-mow?

There was little in the associations that he made during these first Wall street years to remind him of those days. For while many of the men with whom he came in contact had been like himself, the sons of farmers with the first years of their lives spent far from the city, yet from this time, all their “watering” of stock was entirely in the direction of stocks which represented the value of railroads and other properties, and all their knowledge of farm products was devoted to the manipulation of grain markets.

As Gould’s acquaintance grew larger, and his success in ordinary small ventures became assured, his disposition began to demand something of greater magnitude, something with more satisfaction in it for that appetite that was already becoming insatiable. A few small railroad ventures were carried through in a manner bordering upon perfection, and this increased the confidence in him of those speculators who were already his acquaintances. The way opened for him to enter into the manipulations of Erie, and, as before, when opportunity came he recognized and grasped it.

CHAPTER VI.
GOULD’S ASSAULT UPON ERIE.

The most thrilling, the most discreditable portion of Gould’s career, is contained in the ten years following the close of the war of the rebellion. The blackest pages in the history of American railways comprise the chapter relating to the Erie and the most shameful efforts to wreck the fortunes of a thousand men for the aggrandizement of the fortunes of a few, were made in connection with the schemes that resulted in “Black Friday.”

Nothing in the Credit Mobilier and the history of the rise of the Pacific railroads equals in downright violation of sacred trusts, in absolute plunder of vast properties, and in wholesale bribery and corruption, the record of Erie. Even Mr. Gould, in his sworn autobiography in that celebrated investigation before the committee on labor and education, while careful to give minute details about other periods of his history, significantly preserved an entire silence as to Erie and “Black Friday”—two incidents in his career which nothing but an effort to conceal could explain his silence regarding. That this is no exaggeration of language, an examination of the facts will show. There is no intention to speak maliciously of Gould. Beside an open grave, charity and forgetfulness stand guard on either side. But the lesson of Gould’s career would be lost, if even at this time the facts were not plainly and openly told. To say that Gould ruthlessly plundered the Erie railway is to speak the plain truth.

Fortunately the record of Erie, notwithstanding Mr. Gould’s silence, can be told from authoritative testimony. In his famous “Chapter of Erie,” published in the North American Review, in 1869, Charles Francis Adams gives a thrilling account of Erie from the time Daniel Drew engaged in his famous war with Commodore Vanderbilt, to the time when that unfortunate road was in complete control of Jay Gould and James Fisk, Jr. Mr. Adams’ history stopped short in the middle of the story, but the record of Erie, from 1869 till Mr. Gould was driven from power in 1872, is given in the report of the legislative inquiry in 1873, and of the Hepburn investigation of 1879.

It is a curious fact that years after writing this “chapter” Mr. Adams, having become president of the Union Pacific, sat in the same Board of Directors with Gould, but only for a comparatively brief period, and Mr. Adams never repudiated or recalled his early history of Gould in Erie. It is a striking illustration, however, of the power of millions that Gould should live to sit in the same board with the representative of the aristocratic Adams family, which furnished two Presidents to the United States; that after an effort to involve the administration of President Grant in the disgrace of Black Friday, he should, in after years, be joined with him in business enterprises; that after having been publicly branded as an unscrupulous gambler in a Congressional report written by James A. Garfield, he should be sought for to render aid to secure Garfield’s election as president, and that, though not seeking to join the social circles in which the Astors are leaders, he was able to induce John Jacob Astor to sit with him in the Western Union Board of Directors.

Twenty years ago, after Mr. Adams wrote his “Chapter of Erie,” he was himself president of the Union Pacific, and it must have given Mr. Gould the keenest satisfaction to have been the occasion of his retirement from that position. The railway was in a bad way financially—had a big floating debt—and Mr. Gould and his friends stepped in, gained control of the property the second time, retired Mr. Adams from the presidency and secured an adjustment of the floating debt. It was suggested to Mr. Gould at this time that he might write a “Chapter of Union Pacific” covering the history of the Adams administration. But whatever there may have been lacking in administrative vigor in Mr. Adams’ presidency, he retired without any blot on the family escutcheon.

When Gould entered Wall street Erie was one of the most active stocks on the list of the Stock Exchange. It was natural that he should drift into its speculation, and his connection with the Cleveland and Pittsburg led him naturally into Erie. His old acquaintances were surprised to hear one day that he had become a director and a controlling spirit of this great road. This was in 1867.

But now let us quote a little plain language from Charles Francis Adams in order to get into the atmosphere of Erie at this time:

“Yet freebooters are not extinct,” he wrote. “They have only transferred their operations to the land, and have conducted them in more or less accordance with the forms of law, until at last so great a proficiency have they attained that the commerce of the world is more equally but far more heavily taxed in their behalf than would ever have entered into their wildest hopes, while outside the law they simply make all comers stand and deliver. * * * Gambling is a business now, where formerly it was a disreputable excitement. Cheating at cards was always disgraceful. Transactions of a similar character under the euphemistic names of ‘operating,’ ‘cornering’ and the like are not so regarded. * * * No better illustration of the fantastic disguises which the worst and most familiar evils of history assume as they meet us in the actual movement of our own day could be afforded than was seen in the events attending what are known as the Erie wars of the year 1868.”

In these wars Gould was an active spirit; and if Mr. Adams had written in 1873 instead of 1869 he would have made his language still stronger.

Before his entrance into Erie Gould had become acquainted with James Fisk, Jr., and the former, with that unerring judgment of men which was always one of the elements of his success, soon perceived in Fisk the qualities which supplied his own deficiencies. Fisk was the son of a Vermont peddler and followed the calling himself for some time, and in it learned the great art of driving a hard and shrewd bargain. Wholly uneducated, his natural ability in the line of making money was very great. Gould was timid and shrank from publicity. Fisk was bold and loved notoriety. Gould had many refinements of mind and was of a domestic nature. Fisk was coarse, sensual and fond of display. He became the colonel of a militia regiment, and with great delight used to put on his uniform and ride in front of his command. He used to create a sensation by riding in a carriage with six horses in questionable female company. He considered it one of the choisest prerogatives of his position of vice-president and comptroller of Erie to direct the theater that adjoined the railway offices in the Grand Opera House. While Gould did not have the inclination or courage to do these things he did not hesitate to use Fisk in every available way and to hide his own personality behind that of his partner. In those days Fisk seemed to play the more prominent part, and Gould, in public estimation, was a secondary character. When anything was done it was Fisk that bore the brunt of popular criticism and indignation. Yet the facts as they are now known show that Gould’s was the master mind; Fisk was simply his right arm. “With Gould to plan and Fisk to act,” said Gen. Francis Barlow, in 1872, “they were a strong team.”

At the time Gould and Fisk entered into Erie, Daniel Drew was the master of that great trunk line. Drew was one of the most extraordinary characters in Wall street history. Both pious and unscrupulous, he founded a theological seminary and wrecked a railroad with equal fervor. He was a director and treasurer of Erie, and used these positions simply for speculative purposes. He was known in his day as “the great speculative director.” His biggest piece of “financiering” was to get himself apparently cornered in Erie stock, and then to appear in the street with a block of stock which had been converted from bonds issued with an obscure provision entitling the holders to convert them into stock. Gould later on repeated this trick with success, both in Erie and Jersey Central.

Soon after Gould and Fisk entered Erie, Drew became engaged in his celebrated contest with Commodore Vanderbilt, and in this contest he had their able assistance. The first and great Vanderbilt was cast in a larger mould than Drew. The latter was simply a speculator. Vanderbilt was a creator of property. He was the first of the line of railroad kings. Laying the foundations of his great wealth in the steamboat and steamship business, he soon drifted into railroad operations, clearly seeing that in the development in the great inland commerce of America there were larger and quicker profits to be obtained than in the export trade.

Vanderbilt had obtained control of the Harlem and Hudson River roads; he now aimed at the ownership of Erie. Space will not permit the telling of the story of this famous contest. It can be found in detail in Mr. Adams’ interesting chapter. It is a story of extraordinary stock operations, of millions lost and won; of securities issued by the bushel and with little or no regard for law or equity; of large and intricate litigation; of judges bought, legislators bribed, of directors defying injunctions and fleeing to another state to escape arrest. Vanderbilt, having been defeated in other efforts to get his fingers on the Erie road, resolved, if possible, to buy a controlling interest, and his brokers were set at work on this difficult job. Drew resolved to let Vanderbilt have as much stock as he wanted, but entered into a bargain with Gould and Fisk by which the railroad king should be defeated by issuing and marketing an unlimited number of new securities. So Drew sold and Vanderbilt bought. The latter, having in remembrance Drew’s famous convertible stock trick, resorted to the courts to prevent him from issuing any more stock. Injunctions were issued enjoining Drew and all the directors of the road from issuing any stock. Counter-injunctions were obtained by the Drew-Gould party. One judge would issue an order commanding certain things to be done which another judge simultaneously commanded should not be done. Judges in New York, Brooklyn, Albany and Binghamton issued contradictory injunctions. Such a legal pandemonium has never been seen before or since. The courts ran riot and law became another name for plunder. In this scene—the blackest in the history of American jurisprudence—the notorious Judge Barnard loomed up conspicuously, and a little later Judge Cardoza, shrewd, learned, crafty and venal—the modern Lord Bacon—appeared on the scene. At first Barnard was Vanderbilt’s judge. Later, when Vanderbilt had no further use for him, he became Gould’s judge. His other master was Tweed.

In the meantime, regardless of injunctions, Drew and his aides calmly proceeded to carry out their carefully matured plans to issue new stock. It was agreed that fifty thousand shares of new stock should be delivered to the Wall street firms of which Gould and Fisk were members. Without going into the details of the intrigue, it is sufficient to say that it was, at least for the time being, successful. When the fifty thousand shares were thrown on the market the price of Erie fell from eighty-three to seventy-one. Vanderbilt found that he had bought at high figures a lot of Erie stock, but that he was no nearer control than ever. Drew raked in about seven million dollars of Vanderbilt’s money, and Gould and Fisk shared in the profits. Then orders were issued to arrest the Drew directors for contempt of court. Receiving intelligence of this, they hastily packed up their papers and securities, and thrusting them into their pockets and valises, they beat a hasty retreat to Jersey City. Over six million dollars in securities were carried in one coach. Among this precious company, of course, were Gould and Fisk. In Jersey they were safe from the operation of New York law. They calmly proceeded to have the Erie incorporated as a New Jersey institution, at the same time laboring to get the New York legislature to pass a bill to legalize the issue of fifty thousand shares of stock, a transaction which some one at that time likened to an attempt “to legalize counterfeit money.” It was not conscientious scruples which caused the legislature to hesitate to pass this bill; it was simply a question of cash. Vanderbilt was still in the fight to protect his interests, and it was a question of who had the biggest purse. Meanwhile, Peter B. Sweeny—the brains of the Tweed ring—had been made, temporarily, receiver of the road, and though he never actually did anything in that position, Judge Barnard ordered that he be paid one hundred and fifty thousand dollars for his services. Poor Erie had to foot the bill.

The Erie people needed a first-class representative at Albany to watch their interests before the legislature. Gould was selected as the fittest man to act in the capacity of a lobbyist. First giving out that he was going to Ohio, Gould quietly slipped up to Albany, with five hundred thousand dollars of Erie cash in his pocket. Here in a day or two he was arrested, but released on five hundred dollars bail to appear in a New York court on Saturday. He appeared on that day, but his attorneys secured a postponement, and he was allowed to return to Albany in charge of an undersheriff. Arriving in Albany Mr. Gould was conveniently taken sick, and unable to return to New York to attend the court proceedings, though he drove to the capitol in a snowstorm. The officer reported him to the court as a “runaway,” but the matter was afterward settled, and, in the language of Mr. Adams, he “assiduously cultivated a thorough understanding between himself and the legislature.” In this he was materially aided by the cash with which his pockets were so liberally filled. Corruption ran high. One senator was recorded to have accepted seventy-five thousand dollars from one side and one hundred thousand dollars from the other. One man was paid five thousand dollars by Gould “just,” as Mr. Gould remarked, “to smooth him over.” The corruption at this session was investigated by a legislative committee in 1869. Gould was a witness, but he endeavored to conceal the facts as much as possible. In the famous Erie investigation of 1873, however, Mr. Gould testified as follows:

“I was first elected President of the Erie railroad in 1868, and I was President in 1869, 1870 and 1871. I do not remember whether I approved payment to William M. Tweed of money for legal services while he was Senator. I do not know whether he is a lawyer. He was a director of Erie and a member of its executive committee. I would not have allowed pecuniary transactions with Mr. Tweed to be put in the shape of legal services if my attention had been called to them. The name of William M. Tweed is in my handwriting. The words in my handwriting are: ‘William M. Tweed, legal disbursements as per order, J. G., $35,000, April 25, 1871.’ The approval of voucher, April 5, 1869. He was Senator in 1869, also in 1871 and 1872. The ‘legal account, was of an india-rubber character. I gave large amounts in 1869, 1870, 1871 and 1872 in the senatorial and assembly districts. It was what they said would be necessary to carry the day in addition to the amount forwarded by the committee, and contributed more or less to all the districts along the line of the road. We had to look after four states—New York, New Jersey, Pennsylvania and Ohio. It was the custom when men received nominations to come to me for contributions, and I made them and considered them good paying investments for the company. In a republican district I was a strong republican; in a democratic district I was a democrat, and in a doubtful district I was doubtful. In politics I was an Erie railroad man all the time. We had friends on both sides—friends in a business way. The amounts contributed for the elections were large, but I could not give any definite estimate. No names occur to me at the moment. I am a poor hand to remember names. I had relations in several states. I did not keep separate what I paid out in New Jersey from what I paid out in New York. We had the same ground to go over there, and there has been so much of it—it has been so extensive—that I have no details now to refresh my mind. You might as well go back and ask me how many cars of freight were moved on a particular day.”

This confession so charmingly frank relates to payments before elections, but there is every reason to believe that the payments were continued after election.

The state of things unearthed by this investigation was officially described in the report of the legislative committee as follows:

“It is further in evidence that it has been the custom of the managers of the Erie railway, from year to year in the past, to spend large sums to control elections and to influence legislation. In the year 1868 more than one million ($1,000,000) was disbursed from the treasury for ‘extra and legal services.’

“Mr. Gould; when last on the stand, and examined in relation to various vouchers shown him, admitted the payment during the three years prior to 1872 of large sums to Barber, Tweed and others, and to influence legislation or elections; these amounts were charged in the ‘India-rubber account.’ The memory of this witness was very defective as to details, and he could only remember large transactions, but could distinctly recall that he had been in the habit of sending money into the numerous districts all over the state, either to control nominations or elections for Senators and members of Assembly. Considered that, as a rule, such investments paid better than to wait till the men got to Albany, and added the significant remark, when asked a question, that it would be as impossible to specify the numerous instances as it would to recall to mind the numerous freight-cars sent over the Erie road from day to day.”

The report of the committee concludes as follows:

“It is not reasonable to suppose that the Erie railway has been alone in the corrupt use of money for the purposes named; but the sudden revolution in the direction of this company has laid bare a chapter in the secret history of railroad management such as has not been permitted before. It exposes the reckless and prodigal use of money, wrung from the people, to purchase the election of the people’s representatives and to bribe them when in office. According to Mr. Gould, his operations extended into four different states. It was his custom to contribute money to influence both nominations and elections.”

Mr. Adams did not have this report before him when he wrote his “chapter.” His record closes in 1868, soon after Mr. Gould had been elected president of the road. This had been brought about in the following manner: While Gould was engaged in “fixing” the legislature, and the courts were filled with Erie suits, the various parties in interest got together and effected a compromise. Vanderbilt got rid of the useless stock he had bought at high figures. Drew pocketed his profits and returned from exile in Jersey. The Boston, Hartford and Erie crowd which had figured in these transactions, having got all they could out of Erie for the benefit of their own bankrupt road, withdrew. All litigation was stopped and injunctions revoked. Bills were rushed through the legislature favorable to both Vanderbilt and Erie. Drew resigned from the road; Vanderbilt relinquished his ambition for control, and the property was turned over to Gould and Fisk. Drew may have thought that by this time the poor old road was a squeezed lemon, but if so he was mistaken, for Gould and Sage found that the property had not yet been worked for all that was in it. What their administration cost the road is very plainly set forth in the testimony given before the Hepburn Committee of 1879, by J. W. Guppy, assistant general superintendent under Gould, and for many years connected with the road into whose service he first entered as a telegraph operator. When Gould was ousted from the control in March, 1872, the total stock was $86,536,910, the funded debt $26,395,000 and the floating debt $2,517,301, a total of $115,449,211, an increase during the time of Gould’s identification with the road of $64,383,268. Yet Mr. Guppy testified that not a dollar of this vast sum was represented by any additions to the road.

At the time that the Gould-Fisk ring was sucking the life-blood of Erie, the Tweed-Sweeny ring was plundering the city of New York. The two were really one. From Mr. Gould’s testimony just quoted and from other facts here presented, it will be seen how closely allied they were. Tweed was one of the executive committee of the Erie and was paid large sums for so-called “legal” services. This was a great day for the spoilsmen. It was a long feast of corruption. Dishonesty walked openly in the streets, bribery influenced elections and controlled legislatures, and plundering was a fine art. Great as was Tweed at this time, his prosperity was soon to end in flight, capture, imprisonment, disgrace and death, but Gould survived the exposure and lived to enjoy his wealth and power.

CHAPTER VII.
GOULD’S VICTORY AND FINAL DEFEAT IN ERIE.

During these years of Erie conflicts, Gould not only fought his enemies most bitterly, but hardly appreciated the usual feelings of men to be true to their friends. Gould and Fisk now had practical control of Erie. They saw the October election coming, and they were nervous. But the crops were good and Erie’s traffic brought in good returns. Englishmen had become strangely fascinated with the stock, and had bought over 100,000 shares. On August 19th the stock had dropped to 44, and then to the astonishment of Wall street, the transfer books were closed, preparatory to the annual election on October 13th. The election went off well for Mr. Gould and his friends. Peter B. Sweeny and William M. Tweed were among the new directors. Then, it is said Mr. Gould began a system of locking up money. This culminated on October 27th, when members of the New York Stock Exchange waited on Mr. Gould, who had obtained large loans on Erie. Mr. Gould told the committee that $10,000,000 of convertible bonds had been issued, half of which had been converted into stock and the rest would be. This was a new issue. The money, he said, had been used to purchase the $5,000,000 of Boston, Hartford and Erie. The committee was not satisfied. It wanted to know if more stock would be issued. Gould replied: “In certain contingencies,” meaning for his loans. The Secretary of the Exchange afterward said that the stock of the corporation had been increased from $34,265,300 on July 1, 1868, to $57,766,300 on October 24th, or by 235,000 shares within four months. These new issues forced Erie to 35. There was over $12,000,000 in greenbacks locked up and all values were depressed. The situation was so serious that Secretary McCulloch of the treasury, a contractionist, was compelled to announce that if necessary $50,000,000 additional currency would be forthcoming for the relief of the community.

Their next achievement, after securing entire possession, was to corner their old associate Daniel Drew. The latter, after a short retirement from the street, returned to speculation and naturally drifted into Erie, but this time from the outside. He was caught just as many times he had caught others. And Gould repeated, only in a more aggravated way, his trick of issuing new stock and flooding Wall street with it. This new stock was issued by Gould and Fisk without even going through the form of consultation with the other directors. Mr. Adams calls this “the most extraordinary feat of financial legerdemain which history has yet recorded.” Drew found that even he, old and experienced in all the tricks of his trade, was no match for Gould. He appealed to the courts for relief, but Mr. Gould fought him in the same way. Realizing that he had no other avenue of escape, Drew actually called on Gould and Fisk one night and appealed piteously to be permitted to get out without loss, though his companions in loss might be squeezed to Gould’s heart’s content. Gould and Fisk bowed their aged associate out without satisfaction and smiled as they closed the door on the old man.

That was on a Sunday. Next day, in the name of August Belmont, Justice Sutherland was asked to enjoin the issue of any more new Erie stock and to appoint a receiver. Drew signed the affidavits, but, to his chagrin, Gould was ahead of him by two hours. On the petition of one McIntosh, a man in Gould’s employ, Justice Barnard restrained all suits and appointed Gould the receiver of the railroad. Erie stock fell only to 48.

Justice Barnard allowed Mr. Gould to buy and cancel 200,000 shares of Erie. This was intended to crush Daniel Drew, who had to have 70,000 shares to deliver in a few days. Gould’s purchases rushed the stock to 62, and then it turned out that thousands of shopkeepers and barbers, tailors, and all sorts of people, had a share or ten shares of Erie and wanted to realize on them. Gould could not meet the rush of shares these people had to sell. He and Fisk fought like tigers, but they could not stand the drain, and Drew settled his contracts at 57, losing $1,500,000. Then Erie fell to 42. The Open Board of Brokers refused to deal in Erie unless the stock was registered at a reputable banker’s. Erie was knocked off the list and Gould organized a new Board of his own, where trading in Erie went on as before.

Gould at this time actually posed as an anti-monopolist before the public. All his extraordinary acts as president of the Erie were defended on the ground that he was endeavoring to protect the system against consolidation or affiliation with other trunk lines, and there were some honorable persons who really put faith in this statement. “Gould,” said Mr. Adams, “posed as a public benefactor, with unspeakable effrontery.”

There was more fighting in the courts over Erie. Justice Sutherland vacated Barnard’s order making Gould receiver, and Noah Davis was made receiver. Barnard stayed Sutherland, and Sutherland granted a motion to show cause why Barnard’s stay should not be vacated. Gould and Fisk sued August Belmont for $1,000,000 damages, and Frank Work and Richard Schell for $429,250, paid to them at the time of the settlement with Vanderbilt. Gould and Fisk even went to the United States District Court, and on a petition of one of Gould’s clerks, Henry D. Whelpley, a stockholder, Judge Blatchford appointed Gould receiver, and directed the Erie company to place $8,000,000 in his hands to protect the rights of the plaintiff, Whelpley, who protested that he had been injured by certain issues of stock.

The marvelous business acumen displayed by the manipulators of these properties was aided by the blind zeal of certain foreign investors for American securities then as prevalent as now. The wonderful financial operations of the Drew and Gould regimes in Erie could not have been possible but for the extraordinary fascination which the stock possessed for English capitalists. While Americans looked with more than suspicion on the Erie securities, England was possessed of an irresistible craze to get as many of them as possible. English capitalists would not take the United States bond even when selling below par, but they bought with avidity every share of Erie they could get hold of. At last, however, the eyes of the English stockholders were opened to the true condition of affairs, and under the lead of James McHenry they organized to get the control of the property. At this time Gen. Daniel E. Sickles, one of the heroes of Gettysburg, was Minister to Spain. He was engaged to lead the anti-Gould forces against the Erie strongholds. He did his work well, and it is said was paid a very big fee for his labors. He obtained a leave of absence from Madrid and returned home to conduct the operations in person on the ground. This was the last of the Erie wars.

It should be recorded at this time, however, that the famous partnership of Gould and Fisk had been dissolved by death. Fisk, late in 1871, had been shot by Edward F. Stokes, and after a few days had died from the wound. He and Stokes had at one time been friends but had quarreled over business matters and about a woman—the beautiful, but notorious Josie Mansfield—and the quarrel led to the murder. It will surprise no one who has read this history thus far that in the course of the Erie litigations a Supreme Court judge once held court and issued orders from Josie Mansfield’s apartments. Stokes was tried three times. Once the jury disagreed. Once he was convicted of murder in the first degree and sentenced to be hanged by Judge Noah Davis. This verdict being overruled by the Court of Appeals, he was tried again and convicted of manslaughter in the third degree. After serving a few years in Auburn prison Mr. Stokes returned to New York, where he soon became a prosperous business man, intimate for a long time with John A. Mackay, the California millionaire, and president of a telegraph system competing with Gould’s Western Union.

Before his death the belief is that Gould and Fisk had substantially parted company. The New York World of that day gives an account of an interview between Gould and Fisk, in which the former asked Fisk for his resignation as vice-president and comptroller of Erie. Fisk is represented as saying to a friend who was about to leave for Europe: “I would like you to do me a favor. If you find in Europe a mean man who can do a meaner thing to his best friend or tell a bigger lie than Jay Gould, I want you to telegraph me at once.” After Fisk’s death, however, Gould acted handsomely by his widow. Whatever else may be said of Fisk, he was certainly a more popular man than Gould, and after the former’s death Gould did not long remain at the head of Erie. “The feeling against Gould,” said Gen. Barlow, at the time of the anti-Gould revolution, “grew in great part since Fisk’s death. Fisk was always popular with the people of the road and in the office. Had he been alive we should have had more trouble, or perhaps the move would never have been made.”

Besides Barlow, Gen. Sickles had other efficient aid, and the anti-Gould movement was strengthened by such names as Gen. John A. Dix, who in the same year was elected governor of New York, Gen. George B. McClellan and William R. Travers.

In March, 1872, the blow was struck. A man named Archer had been elected vice-president in place of Fisk, and with his aid the revolution was accomplished. Gould had made him vice-president with the view of conciliating the opposition. Nine members of the Board of Directors had been won over to the opposition. These wrote to Gould, asking him to call a meeting of the board. As Gould did not respond, Vice-President Archer called the meeting. The revolutionists assembled at Barlow’s house and prepared to carry the Grand Opera House by storm. Gould had this barricaded by his men, with instructions to permit no one to pass in. But the revolutionists succeeded in passing the picket line and passed in, and Mr. Archer called the meeting to order. Then ensued an extraordinary scene which lasted all night. Gould ordered the “conspirators,” as he called them, to leave the building. They refused. Gould at this time had the benefit of the legal advice of David Dudley Field and Thomas G. Shearman. Mr. Field was long one of the leaders of the New York bar. One of his brothers sat on the Supreme Court bench of the United States, and the other, Cyrus W. Field, was the father of the Atlantic cable, and soon one of the closest of Gould’s business associates. Mr. Shearman, who afterward became famous in the defense of Henry Ward Beecher, had before this time published an article on the corruption of the New York judiciary, which attracted widespread attention, but he was now counsel to a man who owned two or three Supreme Court judges and a few months later publicly admitted the distribution of a corruption fund.

Space will not permit the telling of all the incidents of that night. Shearman appeared with forty policemen and ordered the revolutionists to leave, but they shut themselves up in their rooms and refused to do so. Gould obtained from Judge Ingraham a temporary injunction to restrain Archer and the other directors from acting, but they calmly proceeded to elect new officers and directors. Field and Shearman declared that Gould’s legal position was absolutely perfect, but notwithstanding this he was finally obliged to give in. The opposition elected Gen Dix as president and Gen. McClellan as one of the directors.

The World of March 11, 1872, thus describes this memorable night:

“The scene at the Grand Opera House was one to be remembered. Gould and Eldridge, with their counsel, in one room and the newly chosen directors in another, the doors of both rooms barred, opening to no one but an avowed friend, each fearful of orders of arrests being served on them, every spare room in the offices filled with blue-coated officers of the peace, sitting in all the chairs and on all the tables and lying on the floors, and an intense sense of subdued excitement pervading the heavy air of the place.

The only communication between the two hostile parties was by means of Peter B. Sweeney, who acted as go-between.

Finding that he was defeated, Gould then resorted to one of those acts of audacity with which at different periods in his career he has surprised the public. In a public letter he offered to leave all the questions in dispute to arbitration by Horace Greeley. Thus he attempted to place himself in favorable light before the public. But it should not be supposed that Greeley was in any sense a friend of Gould. On the contrary, the Tribune of that day shows how severely he criticised Gould.

The battle lasted one night and then Gould surrendered. He remained as a director for a time, but his power was gone and Erie passed out of his hands forever. The property has never fully recovered from the condition into which it was thrown by the Drew-Gould regime. Though one of the most important systems in the country and enjoying an immense business, it is crippled with its enormous stock and bond liabilities, and not until 1891 did it pay a dividend. For many years it remained in the hands of a receiver.

The testimony of J. W. Guppy before the Hepburn Committee, already referred to, gives some interesting details of Gould’s management of the Erie. Among the roads which Erie leased were the Chemung railroad and the Canandaigua and Elmira. These leases were very profitable to Erie, but Gould, as an individual, after quietly purchasing a majority of their capital stocks, as president of Erie refused to pay the rentals, thus abrogating the leases. Then he sold the roads to the Northern Central of Pennsylvania at a big profit. Gould and Fisk organized a number of auxiliary companies whose plant was usually paid for by Erie, but whose stock went into the pockets of Gould, Fisk and their associates. Among these companies was the National Stock Yard Company. The land was purchased and the improvements made by Erie, but the stock was divided as so much spoils, 800 shares finding their way into the pockets of Judge Barnard. The Erie Emigrant Company, the Jefferson Railroad Company, the Blackford Company and the Greenwood Coal Company were the names of some of the companies practically saddled upon Erie, but whose stock was issued to Gould and Fisk without consideration.

August Stein, who made an examination into the records, told the Hepburn Committee that the amount of Gould’s wrong-doing in Erie was about $12,000,000. By this was meant the amount which he wrongfully appropriated.

Mr. Gould’s smartness was never made more apparent than in his manner of pretending to restore the money which he had misappropriated. He had to make restitution of this stolen money—“stolen” is the word used by the Hepburn Committee. After he had left Erie, the new management sought to ascertain how large was the plunder carried away by Gould. This information could be obtained with complete accuracy only from Morosini, the auditor of the company, and he refused to make up the accounts, leaving Erie to join his fortunes with those of Gould. Morosini now became inseparable from Gould and a notable figure in Wall street. He was a tall, athletic Italian, shrewd and faithful, an ideal private secretary. He had served with Garibaldi in the wars for Italian liberty, and was proud of his service under the great Italian patriot. He had been a sailor, too, and had a wide experience with the world, which, while not making him overscrupulous in his methods, made him invaluable to a man like Gould. When the firm of W. E. Connor & Co., of which Gould was a special partner, was founded, Morosini became partner, and when the firm dissolved, and Morosini retired from business, Gould said that his private secretary was worth $2,000,000 or $3,000,000.

A way was opened, however, by which the new Erie management gained some proof of Gould’s wrong-doing. Gould, in company with Horace F. Clark, had engineered a corner in Northwestern stock, one of the most famous and successful corners in Wall street history. In after years, Gould gave a unique account of this corner to a legislative committee which was investigating corners. “I was interested,” said Mr. Gould, with that charming frankness which he sometimes assumed, “in the Chicago & Northwestern corner. The stock was selling at seventy to eighty. I considered it very cheap,” so he bought. He soon had bought a great deal more than there really was to deliver, and the shorts were cornered. The price went up to $250. “I was induced,” said Mr. Gould, with most exquisite humor, “to part with some at that price.”

Among the shorts caught in this famous corner was Henry N. Smith, who only a short time before had been Gould’s partner in the firm of Smith, Gould & Martin, and who had supported Gould in his great conspiracy to corner gold. Smith is another noted Wall street character, whose life is linked in that of Gould. He was something of an “exquisite,” and had the reputation of wearing corsets, but he was for many years remarkably successful in Wall street. After renewing his relations with Gould he became chiefly distinguished as one of the bear leaders, and was thus continually in antagonism with Gould. Woerlshoffer, Cammack and Smith were a trio that once nearly drove Gould to the wall, but the latter lived to see one dead, the second his associate in certain speculations, and the third involved in irretrievable bankruptcy.

It was not in the Northwest corner that Smith was ruined, but in it he lost a very large sum, which found its way into Gould’s pockets. Smith was not slow in getting his revenge. The books of the late firm of Smith, Gould & Martin were in his possession, and he handed them over to Mr. Barlow, of the Erie, who quickly discovered in them the evidence on which to obtain an order of arrest for Gould and to establish a suit for the recovery of $12,803,059, the proceeds of bonds converted into stock to the extent of 407,347 shares, which were sold by Mr. Gould’s firm and the proceeds transferred to his pocket. That was the charge, and Gould was arrested and placed under very heavy bonds, which he furnished. Here Mr. Gould’s genius displayed itself. He actually entered into a big speculation based on his restitution of this plunder. Gen. Dix, it should be recorded, remained as president of Erie for only a few months, and was succeeded by President Watson, a man who owed his position mainly to Horace F. Clark, who, as has been seen, was in intimate business relations with Gould. Clark undertook to arrange a compromise between Watson and Gould, and all three evidently united to “rig” the stock market by the operation. One day it was reported that Gould intended to restore his plunder, and the price of Erie advanced with a bound. A day or two later a denial of the report would come, and down would go the price. This was repeated two or three times and Gould, of course, bought at the low figures and sold at the top, and the profits must have been big. Finally the restitution, so-called, was announced with a flourish of trumpets. On the face of the agreement Gould made over to Erie an immense amount of property and all suits were withdrawn and Gould released from all criminal responsibility. A clause in the agreement said that in making this transfer of property Gould expressly stipulated that it should not be considered as an admission of wrong-doing. The Opera House and adjoining buildings and other real estate, with the exception of Gould’s Fifth avenue mansion, were made over to the Erie, and, in addition, a mass of stocks of the par value of about $6,000,000. As a matter of fact most of these stocks were worthless. J. G. Guppy told the Hepburn Committee that he would not give $200,000 for the entire lot. Among the securities were $1,000,000 of United States Express stock to be issued, and which Gould guaranteed to be issued, but which, as a matter of fact, never was. When Hugh J. Jewett became receiver of Erie he discovered the utter sham of this alleged restitution. He told the Hepburn Committee: “Mr. Watson had made a settlement with Mr. Gould, in which he received in liquidation of this account, or such portion of it as he supposed he could recover, certain assets. When I came here I sought to realize on these assets. I found many of them totally worthless, and some which were of value were encumbered by existing liens.”

By the closing of these transactions Mr. Gould was entirely freed from all connection with Erie and was enabled to seek new fields for cultivation. It had been a few years before, during the Erie troubles, that Gould and his coadjutors originated the scheme for cornering gold, which consummated on the day which is now remembered as “Black Friday,” the other most disgraceful of the conspiracies of his life.

CHAPTER VIII.
THE GOLD CONSPIRACY.

“Black Friday,” that darkest day in the financial history of America, was not the creation of sudden circumstance, but the culmination of a plan conceived by Gould and his associates, with all its details arranged for weeks before. Whether the whole truth has ever been written about Mr. Gould’s gold operations is open to doubt. The explanation given by Henry Clews, in his noted work, “Twenty-eight years in Wall Street,” seems a trifle naive to those who are not so deeply initiated in Wall street methods. He says:

“In the year 1869, this country was blest with abundant crops far in excess of our needs, and it was apparent that great good would result from any method that could be devised to stimulate exports of a part, at least, of the surplus.

“Letters poured into Washington by the thousand from leading bankers, merchants and business men, urging that the Treasury department abstain from selling gold, as had been the practice for some time, so that the premium might, as it otherwise would not, advance to a figure that would send our products out of the country, as the cheapest exportable material in place of coin, which, at its then artificially depressed price, was the cheapest of our products, and at the same time the only one undesirable to part with. So the government decided to suspend gold sales indefinitely.

“Jay Gould and others, being satisfied that this was to be the policy of the administration, commenced at once buying large amounts of gold, actuated, doubtless, by the purest of patriotic motives, namely, to stimulate cotton and cereal exports. They succeeded in accumulating a considerable amount of gold at prices ranging from 135 to 140, covering a period of three months’ steady buying.

“This was the honest foundation on which the great ‘Black Friday’ speculative deal was erected.

“The eruption on ‘Black Friday’ was really caused by the erratic conduct of James Fisk, Jr., who actively joined the movement on Thursday, the day before, and became wild with enthusiasm on the subject of high gold.”

The Men of Black Friday.

1.—Jay Gould. 2.—Jim Fisk, Jr. 3.—Daniel Drew. 4.—Commodore Vanderbilt. 5.—Peter B. Sweeny. 6.—E. R. Stokes.

The “Black Friday” scheme was the most gigantic one that Wall street had ever seen. This gold conspiracy was investigated in 1870 by a committee of Congress, of which James A. Garfield, afterward President, was chairman, and S. S. Cox, a member. The investigation undertaken went far enough to show how zealously the conspirators labored to get Grant within their toils and implicated persons near to him. Unfortunately, too, the President had innocently enough permitted himself to be put in a suspicious position, and it was long before he was completely purged of the scandal.

The report of the committee, with the accompanying testimony, is absorbingly interesting:

“Gould, the guilty plotter of all these criminal proceedings,” is the language of James A. Garfield, the author of this report.

Gould some years before had formed a co-partnership with H. N. Smith and others under the name of Smith, Gould, Martin & Co. “He was a broker,” says Henry Adams in his history of the gold conspiracy, “and a broker is almost by nature a gambler, perhaps the very last profession suitable for a railway manager. In character he was strongly marked by his disposition for silent intrigue. He preferred, as a rule, to operate on his own account without admitting other persons into his confidence, and he seemed never to be satisfied except when deceiving everyone as to his intentions. There was a reminiscence of the spider in his nature. He spun huge webs in corners and in the dark, which were seldom strong enough to resist a serious strain at the critical moment. His disposition to this subtlety and elaboration of intrigue was irresistible. It is scarcely necessary to say that he had not a conception of a moral principle. In speaking of this class of men, it must be fairly assumed at the outset that they do not, and can not, understand how there can be a distinction between right and wrong in matters of speculation, so long as the daily settlements are punctually effected. In this respect, Mr. Gould was probably as honest as the mass of his fellows, according to the moral standard of the street; but without entering upon technical questions of roguery, it is enough to say that he was an uncommonly fine and unscrupulous intriguer, skilled in all the processes of stock gambling, and indifferent to the praise or censure of society.”

It was one of Mr. Gould’s peculiarities that he rarely entered into any large speculation without furnishing the public with a plausible reason for assisting him in his operations. This was certainly the case in the gold conspiracy. The plausible reason was in this case suggested to Mr. Gould by James McHenry, who was then training with Mr. Gould in Erie. The latter spared no pains to dress the reason up in the best shape and give it to the public. Mr. Gould argued with much apparent force, but actual sophistry, that an advance in the price of gold would benefit the Western farmers in giving them a bigger price for their grain, and Mr. Gould backed up this theory with many facts and figures. Gen. Grant had just become President. His Secretary of the Treasury was George F. Boutwell. The key to the situation was the financial policy of the government. No successful corner in gold could be established if the Treasury should sell gold with a liberal hand. It should be explained that the war had caused a lively speculation in gold, which continued after the war until the resumption of specie payments made the greenbacks equal in value to gold. Speculation in gold was carried on in the gold-room, an institution separate from the Stock Exchange.

It became essential to the success of Mr. Gould’s plans that the Grant administration should either become a party to the speculation or else an honest believer in his crop theory. Failing in both of these, the public must at least be impressed with the idea that the administration was in the deal whether it was or not. So Gould began to lay systematic siege around the administration. He seems to have entered alone into this speculation. It was only when he was unable to carry the burden alone that he took in others, and it was not until late in the game that Fisk entered, Gould found a brother-in-law of President Grant a convenient tool in his operations. The name of this brother-in-law was A. R. Corbin, who had been something of an adventurer all his life, and whose chief hold on respectability was his relationship to the President. Gould unfolded enough of his plans to Corbin to enlist him in his service and to bind him by interest to the speculation. Gould bought for Corbin $1,500,000 of gold, and promised him that all the profits should be turned over to him. Every rise of one per cent. in the price of gold made Corbin $15,000 richer. Corbin claimed to have great influence with the President, and Gould evidently placed much reliance in him. “I am right behind the throne,” said Corbin to Gould at one stage of the proceedings. “Give yourself no uneasiness. All is right.”

Mr. Henry Adams, in his celebrated chapter, “The New York Gold Conspiracy,” makes the following interesting explanation of circumstances preliminary to “Black Friday:” “In order to explain the operation of a so-called corner in gold to ordinary readers with the least possible use of slang or technical phrases, two preliminary statements are necessary. In the first place, it must be understood that the supply of gold immediately available for transfers is limited within distinct bonds in America. New York and the country behind it contain an amount usually estimated at about $20,000,000. The national government commonly holds from $75,000,000 to $100,000,000, which may be thrown bodily on the market if the President orders it. To obtain gold from Europe, or other sources, requires time.

“In the second place, gold in America is a commodity bought and sold like stocks. In gold, as in stocks, the transactions are both real and speculative. The real transactions are mostly purchases or loans made by importers who require coin to pay custom on their imports. The speculative transactions are mere wagers on the rise or fall of price, and neither require any actual transfer of gold, or even imply its existence, although in times of excitement hundreds of millions nominally are bought, sold and loaned.

“Under the late administration, Mr. McCulloch, then Secretary of the Treasury, had thought it his duty at least to guarantee a stable currency, although Congress forbade him to restore the gold standard. During four years gold had fluctuated little and principally from natural causes, and the danger of attempting to create an artificial scarcity in it had prevented the operators from trying an experiment which would have been sure to irritate the government. The financial policy of the new administration was not so definitely fixed, and the success of the speculation would depend on the action of Mr. Boutwell, the new secretary, whose direction was understood to have begun by a marked censure on the course pursued by his predecessor.

“Of all financial operations, cornering gold is the most brilliant and the most dangerous, and possibly the very hazard and splendor of the attempt were the reasons of its fascination to Mr. Jay Gould’s fancy. He dwelt upon it for months and played with it like a pet toy. His fertile mind even went so far as to discover that it would prove a blessing to the community, and on this ingenious theory, half honest and half fraudulent, he stretched the widely extended fabric of the web in which all mankind was to be caught. This theory was in itself partially sound. Starting from the principle that the price of grain in New York is regulated by the price in London, and is not effected by currency fluctuations, Mr. Gould argued that if it were possible to raise the premium on gold from 30 to 40 cents at harvest time, the farmer’s grain would be worth $1.40 instead of $1.30, and as a consequence the farmer would hasten to send all his crop to New-York for export over the Erie railway, which was sorely in need of freight. With the assistance of another gentleman, Mr. Gould calculated the exact premium at which the western farmer would consent to dispose of his grain, and thus distance the three hundred sail which were hastening from the Danube to supply the English market. Gold, which was then heavy at 34, must be raised to 45.

“This clever idea, like all the other ideas of these gentlemen of Erie, seems to have had the single fault of requiring that some one somewhere should be swindled. The scheme was probably feasible; but sooner or later the reaction from such an artificial stimulant must have come, and whenever it came, some one must suffer. Nevertheless, Mr. Gould probably argued that so long as the farmer got his money, the Erie railway its freights, and he himself his small profits on the gold he bought, it was of little consequence who else might be injured; and indeed by the time the reaction came, and gold was ready to fall as he expected, Mr. Gould would probably have been ready to assist the process by speculative sales in order to enable the Western farmer to buy his spring goods cheap, as he had sold his autumn crops dear. He himself was equally ready to buy gold cheap and sell it dear on his private account, and as he proposed to bleed New York merchants for the benefit of the Western farmer, so he was willing to bleed Broad street for his own. The patriotic object was, however, the one which, for obvious reasons, Mr. Gould preferred to put forward most prominently and on the strength of which he hoped to rest his ambitious structure of intrigue.”

Here is the story in brief: In March, 1869, the price of gold touched 130¼, which was the lowest figure that it had reached in three years. Jay Gould, as president of the Erie railway and the principal owner of the Tenth National Bank, had the command of large sums of money. He proposed to Fisk that they take advantage of the low price of gold and “corner” it. Fisk did not think the scheme practicable, and declined at first to go in. Subsequently he reconsidered his determination and joined in the undertaking zealously. Gould bought $7,000,000 of gold at 132 and put up the price to 140. He induced other brokers to buy heavily, and within a few days gold advanced to 144. It soon dropped back to 136. The element of uncertainty in Mr. Gould’s plan was the policy of the government with reference to gold sales. Should the government at any time release some of the millions stored in the Sub-Treasury here, no “corner” could be successful.

The first step in the conspiracy after the bribing of Corbin and the purchase of a large quantity of gold was to secure the appointment of the right sort of man as Assistant Treasurer at New York. Though nominally a subordinate officer and having no original authority, the assistant treasurer draws the salary of a cabinet officer, and his influence is large. Corbin undertook this part of the scheme and secured the appointment of Gen. Butterworth, who seemed to give great satisfaction to Gould. Butterworth was afterward exonerated by Congress of all guilty connection with the gold conspiracy, but Gould purchased for his account $1,000,000 of gold. But then Gould also had the effrontery at one stage of the negotiations to buy $500,000 of gold for Gen. Porter, the President’s private secretary, which that gentleman promptly declined. It was said, also, that $500,000 was purchased in the name of Mrs. Grant, but she never received any of the profits and had no connection with the conspiracy.

Butterworth secured, it was necessary to make an impression on the President. Says Mr. Adams: “On the 15th of June, 1869, the President came to New York, and was there the guest of Mr. Corbin, who urged Mr. Gould to call and pay his respects to the chief magistrate. Mr. Gould had probably aimed at precisely this result. He called, and the President of the United States not only listened to the president of Erie, but accepted an invitation to Mr. Fisk’s theatre, sat in Mr. Fisk’s private box, and the next evening became the guest of these two gentlemen on their magnificent Newport steamer.”

The President was to be sounded in regard to his financial policy on the occasion of this memorable trip to Boston, and when the selected guests sat down at nine o’clock to supper the conversation was directed to the subject of finance. “Some one,” says Mr. Gould, “asked the President what his view was.” The “some one” in question was, of course, Mr. Fisk, who alone had the impudence to put such an inquiry. The President bluntly replied that there was a certain amount of fictitiousness about the prosperity of the country, and that the bubble might as well be tapped in one way as another. The remark was fatal to Mr. Gould’s plans and he felt it, in his own words, “as a wet blanket.”

Mr. Fisk, in his testimony, frankly said:

“On our passage over to Boston with Gen. Grant we endeavored to ascertain what his position in regard to finances was. We went down to dinner about nine o’clock, intending, while we were there, to have this thing pretty thoroughly talked up, and, if possible, to relieve him from any idea of putting the price of gold down.”

Mr. Gould in his testimony said of the President: “He was our guest. At this supper the question came up about the state of the country, the crops, and the prospects ahead. The President was a listener; the other gentlemen were discussing. Some were in favor of Boutwell’s selling gold, and some were opposed to it. After they had all interchanged their views, some one asked the President what his view was. He remarked that he thought there was a certain amount of fictitiousness about the prosperity of the country, and that the bubble might as well be tapped in one way as another. That was about the substance of his remark. He then asked me what I thought about it. I remarked that I thought if that policy was carried out it would produce great distress, and almost lead to civil war.”

However, Gould was already in, and he was not a man to back out as long as he saw any chance for success, and he finally succeeded in really impressing on the President’s mind that in order to move the crops it was necessary that gold should sell at 145. Gould’s first purchases had been made as low as 130¼, which was about the normal price.

But it should be said at the outset that there is not a particle of evidence that Gen. Grant was ever personally concerned in the speculation or that he winked at members of his official household being so. On the contrary, the evidence is all the other way. Grant never seemed to like Gould. When the latter succeeded in getting his first interview with the President, Gen. Grant reprimanded his servant for allowing him so easy an access to his person, and at a later day the President remarked to his Secretary that he did not like to have that man—referring to Gould—around so much. “He is always trying to get something out of me,” was the President’s remark.

After the party returned to New York, Gen. Grant, Mr. Gould and Mr. Corbin had private interviews on the gold question at Mr. Corbin’s house. As a result of these interviews, according to Mr. Gould’s testimony, the President remarked that the government would do nothing during the fall months to put down the price of gold or to make money tight. Just after those interviews Mr. Gould purchased two millions in government bonds for Mr. Corbin’s account. The next interview with President Grant on this great subject was at Newport, where James Fisk, Jr., followed him.

Fisk testified that Corbin told him that Mrs. Grant had an interest in the gold speculations; that five hundred thousand of gold had been taken by Mr. Gould at 131 and 132, which had been sold at 137; that Mr. Corbin held for himself about two millions of gold, five hundred thousand of which was for Mrs. Grant and five hundred thousand for “Porter.”

The story of the conspiracy, as Mr. Clews tells it, is interesting as well, and has certain points of difference from the others. He says:

“Although the policy of stopping the sale of gold had been agreed upon in deference to the views of the best financiers of the country, yet Mr. Gould and his fellow strategists thought it was best to make assurance doubly sure on this point, in order that nothing might stand in the way of the great speculative intrigue to get a “corner” in gold. President Grant was conservative on the subject. The conspirators, therefore, conceived the design of arranging things so that Secretary Boutwell could not depart from this policy, no matter what emergency might arise.

“This bold and wicked strategy could only be successful by first getting President Grant convinced that the theory of stopping the gold sales was the only commercial salvation for the country, in the then condition of business stagnation and the possible panic threatened. The theory was then to impress him with the necessity of giving Secretary Boutwell an absolute order not to sell gold, and afterward to fix things so that it would be impossible for the President to revoke that order until the brilliant speculative purposes of the clique in cornering gold should be accomplished.

“The scheme was but little short of treason, regarded from a patriotic point of view, and it is very questionable if the perpetrators would have stopped short of this dastardly act had they not been convinced that their purpose was fully compassed by a method less villianous and shocking. It was considered indispensable by the conspirators for the consummation of their plans that Grant should be got out of the way by some means or other. Fortunately for him and for the honor of the nation, the plan succeeded without the necessity of offering him any violence.

“It was arranged that Gen. Grant should accompany a party one beautiful evening in the middle of June, who were going to attend the great Peace Jubilee of Patrick Sarsfield Gilmore in Boston. Jim Fisk did the executive work in the arrangement. There was a fine champagne supper on board the Boston boat and several gentlemen were present who were thoroughly conversant with financial question’s and could talk glibly on the state of the country. Mr. Gould said, in his testimony: ‘I took the ground that the government ought to let go of the loan and let it find its commercial level; that in fact it ought to facilitate an upward movement in gold in the fall.’

“This reference to ‘its commercial level’ is rich, coming from the head center of the plotters who wanted to put the article up to 200.

“About the time the above events were transpiring, the Assistant Secretary of the Treasury, Mr. H. H. VanDyck, resigned his office in this city. Mr. Gould’s chief ambition was to name his successor in order that he might be able to control the treasury when the time to get a corner in gold should be ripe. Mr. Abel R. Corbin came in quite handy at this juncture to help to further the designs of Mr. Gould. He was a man of fair education and considerable experience both in business and politics. He had been a lobbyist in Washington for some years. He was well informed on financial matters, a pretty good writer, and could talk like a book. His wife was a sister of Mrs. Grant and he had good opportunities for reaching the presidential ear, which he employed to the best advantage.

“A gentleman named Robert B. Catherwood, who was married to a step-daughter of Mr. Corbin, was approached by Gould and Corbin on the subject of the Assistant Treasurership. They were anxious that Mr. Catherwood should take the office and told him that he would make a great deal of money in a perfectly legitimate manner if he were once installed.

“So Mr. Catherwood stated in his testimony before the investigating committee, but he adds: ‘My ideas differed from theirs in what constituted a legitimate manner and I declined the office.’

“The office then sought another man in the person of Gen. Daniel Butterfield. He received the intimation of his appointment in a very different spirit from Mr. Catherwood, showing that he was fully equal to the occasion. He wrote a letter to Mr. Corbin, thanking him kindly for the offer, saying that he was under numerous obligations to him, and expressing a hope that he would be eminently successful in his undertaking. Gen. Butterfield received his commission in due course.

“Corbin talked with Grant until he received a positive assurance that Boutwell was not to sell any more gold. At a meeting in Grant’s house, where Gould and Corbin were present, the President said: ‘Boutwell gave an order to sell gold, and I heard of it and countermanded the order.’

“It was not until Gould had received positive assurance from the President’s own lips, that he considered his scheme perfect. But the links of this strategic chain were now nearly all forged. The bankers and merchants were largely in his favor through commercial necessity, the Sub-Treasury was ‘fixed,’ as he thought, and the executive fiat had placed the Treasury of the United States itself where it could not spoil the deal if Grant did not change his mind. There were reasons, of course, to apprehend that he would do so in case of an emergency; for he never was privy to the scheme, no matter what his traducers and political enemies may have said.

“To insure perfect safety, then, Grant must be put out of the way temporarily. This was the crowning effort of the conspirators. After the Boston Peace Jubilee, this Cabal spent the remaining part of the summer in maturing its designs.

“It seemed necessary that all the members of the Cabal should be fully acquainted with the combination to Grant’s purposes as regarded his orders to Boutwell, and that his ideas should remain fixed on the theory of increasing exportation for the country’s safety. Accordingly, it was arranged that Jim Fisk should visit the President at Newport, where he was on a visit, some time about the middle of August, a month or so prior to Black Friday. It would seem that Grant at this date was still wavering and adhering to his policy of selling gold, in spite of the order which he had given Boutwell. He may have been suspecting that the anxiety of Gould, Corbin & Co. for the prosperity of the country was not altogether genuine. The necessity of bringing further pressure to bear upon him was, therefore, clearly manifest.

“Referring to the interview at Newport, Fisk said: ‘I think it was some time in August that General Grant started to go to Newport. I then went down to see him. I had seen him before, but not feeling as thoroughly acquainted as I desired for this purpose, I took a letter of introduction from Mr. Gould, in which it was stated that there were three hundred sail of vessels then on the Mediterranean, from the Black Sea, with grain to supply the Liverpool market. Gold was then about thirty-four. If it continued at that price, we had very little chance of carrying forward the crop during the fall. I know that we felt nervous about it. I talked with Gen. Grant on the subject and endeavored, as far as I could, to convince him that his policy was one that would only bring destruction on us all. He then asked me when we should have an interview, and we agreed upon the time. He said: ‘During that time I will see Mr. Boutwell, or have him there.’

“The President was carefully shadowed after this by the detectives of the clique, and great care was taken to throw men across his path who were fluent talkers on the great financial problem of the day, the absolute necessity of stimulating the export trade and raising the premium upon gold for that patriotic purpose. In this way, President Grant began to think that the opinion of almost everybody he talked with on this subject was on the same side, and must, therefore, be correct.

“About the first of September, it was considered that the opinions of the President had been worked up fairly to the sticking point, and Gould bought $1,500,000 in gold at 132½ for Corbin. Gould, however, was timid in his purchasing at first, as he had heard that a number of operators who were short of gold were making arrangements to give Secretary Boutwell a dinner. On further assurance from Corbin that the President had written Boutwell to sell no gold without consulting him, Gould prepared to go ahead with the execution of his great scheme. Nothing remained to be done in the completion of the plot except to stow away the President in a place of safety until the financial storm should blow over.”

CHAPTER IX.
CULMINATION OF CONSPIRACY—BLACK FRIDAY.

September is the memorable month of the gold conspiracy in Wall street. Between the 20th of August and the first of September, Gould, in company with Woodward and Kimber, two large speculators, made a pool to raise the premium on gold, and some ten or fifteen millions were bought, but with very little effect on the price.

“BLACK FRIDAY” IN WALL STREET.

An event now took place which would have seemed to justify the implicit belief of an Erie treasurer in the corruptibility of all mankind. The unsuspicious President again passed through New York, and came to breakfast at Mr. Corbin’s house on the 2d of September. He saw no one but Mr. Corbin while there, and the same evening at ten o’clock, departed for Saratoga. Mr. Gould declared afterward, however, that he was told by Mr. Corbin that the President, in discussing the financial situation, had shown himself a convert to the Erie theory about marketing the crops, and had stopped in the middle of a conversation in which he had expressed his views and written a letter to Secretary Boutwell. In regard to this letter, Secretary Boutwell testified as follows:

“I think on the evening of the 4th of September I received a letter from the President, dated at New York, as I recollect it; I am not sure where it was dated. In that letter he expressed an opinion that it was undesirable to force down the price of gold. He spoke of the importance to the West of being able to move their crops. His idea was that if gold should fall, the West should suffer and the movement of the crop would be retarded. The impression made on my mind by the letter was that he had rather a strong opinion to that effect. Upon the receipt of the President’s letter, I telegraphed to Judge Richardson, ‘Send no order to Butterfield as to sales of gold until you hear from me.’”

Mr. Gould had therefore succeeded in reversing the policy of the National Government, but this was not all. He knew what the government would do before any officer of the government knew it. Mr. Gould was at Corbin’s house on the 2d of September, and it seems certain that he saw Corbin privately, unknown to the President, within an hour or two after this letter to Mr. Boutwell was written, and that it was at this interview, while the President was still in the house, that Mr. Corbin gave him the information about the letter, perhaps showed him the letter itself. It was immediately at this time that Gould bought $1,500,000 worth of gold for Corbin.

No time was lost, and from this day Gould bought largely of gold. He did everything to give the public the impression that the government was behind the “deal.” An article written by Corbin was published as an editorial in the Times and attracted attention, as the editor, John Bigelow, had just had a conversation with the President and was supposed to speak with authority. Notwithstanding the authorship of the article, it is just to say that the Times detected the odor of Wall street about it and quarantined the article before making it public. Its effectiveness for Gould was much lessened. Gould wrote to Boutwell with a view of obtaining an official statement from him, but received a reply that said little and that diplomatically. Meanwhile Gould had been buying millions in gold and had formed a pool that bought millions more. That the movement was fictitious is shown by the fact that the impression on prices was comparatively small. Fisk looked on incredulously. “The country is against you,” was his criticism of the scheme.

Down to this moment Jim Fisk had not appeared in the affair. It was not until after September 10th that Gould appears to have decided that there was nothing else to be done but to take him into confidence. Fisk immediately bought seven or eight millions and the market began to respond slowly to these enormous purchases.

“Meanwhile Mr. Gould had placed another million and a half of gold to the account of Gen. Butterfield and notified him of the purchase; so Mr. Gould swears, in spite of Gen. Butterfield’s denial. The date of this purchase is not fixed. Through Mr. Corbin a notice was also sent by Gould about the middle of September to the President’s private secretary, Gen. Porter, informing him that half a million was placed to his credit. Gen. Porter instantly wrote to repudiate his purchase, but it does not appear that Butterfield took any notice of Gould’s transaction on his account. On the 10th of September the President had again come to New York, where he remained his brother-in-law’s guest till the 13th, and during this visit Mr. Gould appears again to have seen him, although Mr. Corbin avers that on this occasion the President intimated his wish to the servant that this should be the last time Mr. Gould obtain admission.

“Things were now so managed that the President was placed in a position that his honor was seriously in danger of being compromised, yet so ably was the matter engineered that he was perfectly unconscious of the designs of the plotters. He was prevailed upon to go to a then obscure town in Pennsylvania, named Little Washington. The thing was so arranged that his feelings were worked upon to visit that place for the purpose of seeing an old friend who resided there. The town was cut off from telegraphic communications, and the other means of access were not very convenient. The President set out on his journey on the morning of the 13th, and there he was ensconced to remain for a week or so, about the time the Cabal was fully prepared for action.

“Gould then said to Fisk: ‘This matter is all fixed up. Butterfield is all right. Corbin has got Butterfield all right and Corbin has got Grant fixed all right, and in my opinion they are all interested together.’

“This was patriotism with a vengeance. Just think of the audacity of it! Gould enters into a scheme to place the President in a position where he could not interfere with the plan of getting a ‘corner’ on gold, and then he turns around and accuses the first magistrate of the republic with being privy to a plot that was calculated to create a panic and cause widespread disaster in business circles and make him an object of universal contempt.”

Some of the members of the pool got frightened and sold out, but Gould continued to buy. “I had to buy,” testified Gould afterward, “or show the white feather. The other fellows deserted me like rats.” Gould had the material aid of the Tenth National Bank, an institution which he owned and which he used as an adjunct to his speculative operations. The extent to which he used it in the gold conspiracy was shown by the fact that it in one day overcertified Gould’s checks to the amount of $7,500,000. Garfield called this bank “a manufactory of certified checks.”

As Gould bought the bears sold “short” and the battle became intensely exciting.

Fisk’s assistance was as valuable as Gould expected it to be. He took no stock in the crop theory, but the idea of making the administration a partner in the diabolical enterprise seems to have attracted him. “Nothing,” said Garfield in his report to Congress, “nothing but the scent of corruption could sharpen the appetite of Fisk for the game his leader (Gould) was pursuing. The compounded villainy presented by Gould and Corbin was too tempting a bait.” So Fisk was drawn into the movement when his aid was most needed. This corner was a glittering edifice built on a foundation of deceit and corruption. It could not long stand. The most that Gould and Fisk could do was to frighten the “shorts” into covering before Grant awakened to the realization of how he was being used and issue orders to sell gold. Wall street was soon filled with rumors that the administration was in the deal and the excitement ran high.

“The malign influence,” says the Congressional report already quoted, “which Cataline wielded over the reckless and abandoned youth of Rome finds a fitting parallel in the power which Fisk held in Wall street when, followed by the thugs of Erie and the debauchees of the opera, he swept into the gold-room and defied both the street and the Treasury.”

The magnitude of the conspiracy is shown by the fact that before Black Friday Gould had employed fifty to sixty brokers to make his purchases, and $50,000,000 to $60,000,000 of gold had been bought by William Heath & Co., Woodward, H. K. Enos, E. K. Willard, and others of the brokers. He required all this to advance the price of gold from 135½ to 140½.

Fisk’s entrance into the game was a powerful help to Gould, for it not only furnished another purchaser for gold, but directed public attention from himself to Fisk. The ex-peddler loved to bask in the sun of public notoriety. Gould was timid, but Fisk had the brazen courage of a courtesan.

Gould and Fisk now became exceedingly nervous over the firmness of the President’s policy. He induced Mr. Corbin to write a letter directly to the President himself. This letter, written on the seventeenth, under the influence of Gould’s anxiety, was instantly sent away by a special messenger of Fisk’s, who rode twenty-eight miles on horseback from Pittsburg, and delivered it in person to the President. He read the letter, and had his suspicions at once aroused. He said laconically to the messenger: “It is satisfactory; there is no answer.” He began to see through the game, and at once desired Mrs. Grant to write to Mrs. Corbin requesting her husband to have nothing more to do with the Gould-Fisk gang.

The messenger telegraphed “All right” to the conspirators.

“We now come to the week which was to witness the explosion of all this elaborately constructed mine. On Monday the 20th, gold again rose. Throughout Tuesday and Wednesday, Fisk continued to purchase without limit and forced the price up to 40. At this time, Gould’s firm of Smith, Gould & Martin, through which the operation was conducted, had purchased some $50,000,000, and yet the bears went on selling, although they could only continue the contest by borrowing Gould’s own gold. Gould, on the other hand, could no longer sell and clear himself, for the reason that the sale of $50,000,000 would have broken the market to nothing. The struggle had become intense. The whole country was looking on with astonishment at the battle between the bulls and the bears. All business was deranged and all values unsettled. There were indications of a panic in the stock market; and the bears, in their emergency, were vehemently pressing the government to intervene. Gould now wrote to Mr. Boutwell a letter so inconceivably impudent that it indicates desperation and entire loss of his ordinary coolness:

“Sir: There is a panic in Wall street, engineered by a bear combination. They have withdrawn currency to such an extent that it is impossible to do ordinary business. The Erie company requires $800,000 to disburse. Much of it in Ohio, where an exciting political contest was going on and where we have about ten thousand employed, and the trouble is charged on the administration. Cannot you consistently increase your line of currency?”

From a friend, such a letter would have been an outrage, but from a member of the Tammany ring, the principal object of detestation to the government, such a threat or bribe, whichever it may be called, was incredible. Mr. Gould was, in fact, at his wits’ end. He dreaded a panic and felt that it could no longer be avoided.

The conspirators interpreted the telegram from their messenger, reading “all right” to mean a favorable answer to the letter, and they were much elated. But the President, supposing that the messenger was only a clerk from the post-office, had said “all right” merely to indicate that he had received the letter and required his presence no longer. His suspicions were aroused after the messenger had left, when he ascertained that he had brought the letter at post-haste all the way from New York. That night Mrs. Grant wrote to Mrs. Corbin a note stating that the President had heard that Mr. Corbin was engaged in Wall street speculations, and if it were true he desired that he should immediately dissociate himself from them. This letter filled Gould with consternation. He and Corbin sat in the latter’s house all night reading and rereading the note and endeavoring to grasp the meaning between the lines. “If you show that note,” said Gould, finally, “I am a ruined man.” Corbin said he must obey orders and leave the street, but he insisted Gould should first take up the gold held in Corbin’s name and pay him the profits. Corbin had already received a check for $25,000. But Gould had already all the gold he wanted, and after standing for a while in silence by the door, his brow black with mystery, he left the house.

The game was up. One stroke of a woman’s pen had punctured the dazzling bubble. A word from the President was sufficient to collapse the biggest corner on record. How to save himself? That was the question which, with knit brow and lips compressed with hidden excitement, Gould debated as he returned home that night. No thought for others who were deep in the game with himself. No thought for Fisk, his friend and associate. His mind labored for himself alone. He soon reached a conclusion. While there was yet time he would dump his heavy load of gold on the market and let others take what he could not carry. His only capital now was the early information he possessed of the President’s aroused suspicions; of his change of purpose. He did not tell even Fisk of Mrs. Grant’s letter to Mrs. Corbin, but let Fisk continue his purchases in ignorance of the real situation. He only remarked to Fisk that Corbin was getting weary and wanted his profits, or something to that purpose. Thursday—the day preceding Black Friday—Gould began his dumping process. “I sold that day,” he testified afterward, “and only bought enough to make the street think I was still a bull.”

Here is Mr. Clews’ story of days immediately preceding the fatal Friday.

“On Wednesday, the 22d of September, two days preceding ‘Black Friday,’ the clique, it is believed, owned several millions more gold than there was in the city, outside the vaults of the sub-treasury. Belden bought about eight millions of gold on that day, while Smith, Gould, Martin & Co. were also heavy purchasers. The clique held a caucus in the office of Wm. Heath & Co. in Broad street and concluded that it had gold enough to put the price to 200 if it could carry the gold without lending and compel the shorts to purchase. But the idea of finding a market for over thirty millions of gold was also a gigantic problem, and they felt the risk of being ground between the upper and the nether millstones of their scheme.

“On the morning of Thursday another council of war was held in the office of Belden & Co., on Broadway. At this meeting, Gould, Fisk, Henry N. Smith and William Belden were present. The proceedings of this meeting were kept a profound secret, but one result of it was that Belden gave his clerk the famous order to put gold to 144 and keep it there. On that day Belden purchased about twenty millions of gold, the price opening at 141½ and closing at 143½.

“The chiefs of the Cabal had another private meeting up town that evening. The great question of closing up the transactions on the following day was the chief topic of discussion. These operators held contracts for over $100,000,000 in gold. Gould said that the ‘short’ interest was $250,000,000. The total amount of gold in the city did not exceed $25,000,000, and the difference between this and the aggregate amount of the contracts of the clique was the enormous amount that would have to be settled in the event of a ‘corner.’

“Fisk proposed that the clique show its hand, publish the state of affairs, and offer to settle with the shorts at 150. His plan was rejected by his brother conspirators.”

And now opens that remarkable day in September, 1869, known as “Black Friday.” Wall street has passed through other days of excitement and calamity, but even the panic days of 1873 and 1884 pale before the awful passion and fury of Black Friday.

The New York World of September 25, 1869, thus describes the day:

“The scene during the conflict almost beggars description and exceeds anything ever before witnessed in Wall street. It was a tussle of enormous magnitude, fierce and desperate. It was a day long to be remembered and not easily forgotten by those who witnessed it or were caught in the maelstrom that carried everything before it.”

The conspirators were early in the street, and the offices of Smith, Gould & Martin, Fisk & Belden and William Heath & Co. were the center of enormous excitement. William Belden, who was Fisk’s partner, played a conspicuous part in this day’s history. He was a man cool and daring—the fit companion of such men as Gould and Fisk. The day, however, left a stain on his record that could never be obliterated, and when, in 1888, Belden formed a co-partnership with a member of the Stock Exchange, the governing committee of the institution stated that unless the member severed his partnership with Belden he must leave the Exchange.

Gould, Fisk, Belden and their brokers held a counsel of war and laid out the work of the day. Heath was to look after this, Willard was to attend to that, Belden was to direct this and Fisk was to direct that, while “Gould”—the language of the Congressional report is now quoted—“Gould, the guilty plotter of all these criminal proceedings, determined to betray his own associates, and silent and imperturbable, by nods and whispers directed all.” “I determined,” said Mr. Gould afterward, “not to open my mouth that day, and I did not.”

What a study for a dramatic painter Gould would have made that day!

There was undoubtedly some secret understanding between Fisk and Belden to which Gould was a party, by which all the orders given that day could be repudiated if the market went against them. A ready tool was found in Albert Speyer, who accepted verbal orders from Belden in the presence of Gould and Fisk to buy, and who went into the board-room and did buy immense quantities of gold at the highest prices. The street was filled with the wildest rumors. Prices rapidly advanced to 165. The shorts trembled before the rising tide that seemed about to sweep over them. Many were frightened into covering their contracts. Gould continued to sell. Fisk and Belden continued to buy. The excitement rose point by point to the wildest pitch. Old operators lost their heads, men rushed hatless and half crazy through the streets, their eyes bloodshot, their faces pale with anxiety, their brains on fire. There came rumors of contemplated selling of gold by the Treasury, and the street went mad. Where these rumors started no one ever knew, but they were the forerunners of actual fact. James Brown, the Scotch banker, appeared in the board and began to offer gold at declining figures. Then the earthquake started, and the golden edifice built by Gould began to tumble. Soon the Treasury order to sell $4,000,000 of gold appeared, and then the terrible collapse. Prices fell from 165 to 133½. The board-room was the scene of contending furies. Albert Speyer completely lost control of himself; his hair is said to have turned white that night after he went home a ruined man. Wall and Broad streets were filled with men wild with excitement. Infuriated mobs surrounded the offices of Fisk & Belden and Smith, Gould & Martin. Threats of violence were made. Speyer went about saying: “Some one has threatened to shoot me. Let him shoot.” The Gold Exchange Bank was obliged to suspend operations. Its clearances that day amounted to over $300,000,000 of gold. Trading was stopped in the Gold Board. Fisk & Belden suspended and their contracts were repudiated. The fortunes of hundreds were swept away in that day’s battle. Several firms were driven to the wall and announced their failures. The administration was involved in suspicion which it took years to remove. The nation was disgraced and its credit was broken.

But Gould, “the guilty plotter of all these criminal proceedings,” went home saved. What he made or what he lost in that struggle is unknown, but though he had involved others in ruin and had betrayed others, he had saved himself from overthrow. To have gone down in the fight would have been a display of heroism. To save himself alone from the wreck was dishonor.

It is not strange that in his sworn autobiography delivered to the Committee on Labor and Education, Mr. Gould omitted all mention of Black Friday, but when as a witness before the Committee on Corners he was asked about the Black Friday panic, he calmly said that it was the “result of overtrading,” and that its real cause was “the fluctuations in the price of gold caused by the war!” It is a singular coincidence that exactly twenty-two years after Black Friday, on the very anniversary of the day in 1891, Gould caused another big flurry in Wall street. After several years of depression, a “boom” in stocks was in progress, when the sudden announcement was made that the Missouri Pacific, of which Gould was president, would pass its dividend. The announcement caused a revolution in prices and the “boom” completely collapsed.

Mr. Clews tells a graphic story of what he saw:

“On the morning of the fatal day, Belden and William Heath had an early breakfast together at the Fifth Avenue Hotel, and repaired immediately to their offices. Belden announced that gold was going to 200. ‘This will be the last day of the Gold Room,’ he added. Moved by Belden’s threat, a large number rushed to cover. In the language of Henry N. Smith, ‘They came on with a rush to settle.’ He was settling in the office of Smith, Gould & Martin, at 150 to 145, while Albert Speyer, acting as broker for Fisk and Gould, was bidding up to 160 for a million at a time. It was only when the price came down to 133 that Speyer realized the humorous absurdity of his position. He had then bought 26 millions since morning at 160.

“A voracious demand for margins about midday brought the work to a crisis. The scene at the office of Heath was indescribable when Belden went there to see Gould and his confederates, to find out what was to be done next with the frenzied purchasers. An eye-witness thus describes the scene at Heath’s office: ‘I went outside while Belden went in. I walked up and down the alley-way waiting for him to come out. Deputy sheriffs, or men appearing to be such, began to arrive and to mount guard at Heath’s office to keep out visitors. After waiting a prodigious long time, as it seemed to me, Jay Gould came creeping out of the back door, and looking round sharply to see if he was watched, slunk off through a private rear passage behind the buildings. Presently came Fisk, steaming hot and shouting. He took the wrong direction at first, nearly ran into Broad street, but soon discovered his error and followed Gould through the rear passage. Then came Belden, with hair disordered and red eyes, as if he had been crying. He called: ‘Which way have they gone?’ and upon my pointing the direction, he ran after them. The rear passage led into Wall street. At its exit the conspirators jumped into a carriage and fled the street.”

They did not fly the street, however, but went to the Broad street office of Smith, Gould & Martin, where the crowd assembled, evidently with riotous intent, apparently bent upon an application to Judge Lynch for justice; and had any of the gentlemen appeared outside the confines of the front wall, the chances were that the lamp-post near by would have very soon been decorated with a breathless body. To insure their safety inside, however, a small police force kept guard outside, which made the barricade complete. These gentlemen remained under this shelter until the small hours of the morning, busily endeavoring to find out where they stood in the result of the gold deal; and the more they pondered over it, the greater grew the doubt in their minds whether they were standing on their heads or their heels.”

The story told by Mr. Adams is also worthy of repetition as a graphic description of the terrors of the day. Beginning with the morning before, he says:

“It was the morning of Thursday, the 3d; Gould and Fisk went to Broad street together, but as usual Gould was silent and secret, while Fisk was noisy and communicative. There was now a complete separation in their movements. Gould acted entirely through his own firm of Smith, Gould & Martin, while Fisk operated principally through his old partner, Belden. One of Smith’s principal brokers testifies: ‘Fisk never could do business with Smith, Martin & Gould very comfortably. They would not do business for him. It was a very uncertain thing, of course, where Fisk might be. He is an erratic sort of genius. I don’t think anybody would want to follow him very long. I am satisfied that Smith, Gould & Martin controlled their own gold and were ready to do as they pleased with it without consulting Fisk. I do not think there was any general agreement. None of us who knew him cared to do business with him. I would not have taken an order from him nor had anything to do with him.’ Belden was considered a very low fellow. ‘I never had anything to do with him or his party,’ said one broker employed by Gould. ‘They were men I had a perfect detestation of; they were no company for me. I should not have spoken to them at all under ordinary circumstances.’ Another says, ‘Belden is a man in whom I never had any confidence in any way. For months before that I would not have taken him for a gold transaction.’

“And yet Belden bought millions upon millions of gold. He himself says he had bought twenty millions by this Thursday evening, and this without capital or credit except that of his brokers. Meanwhile Gould, on reaching the city, had at once given secret orders to sell. From the moment he left Corbin he had but one idea, which was to get rid of his gold as quietly as possible. ‘I purchased merely enough to make believe I was a bull,’ says Gould. This double process continued all that afternoon. Fisk’s wild purchases carried the price up to 144, and the panic in the street became more and more serious as the bears realized the extremity of their danger. No one can tell how much gold which did not exist they had contracted to deliver or pay the difference in price. One of the clique brokers swears that on this Thursday evening the street had sold the clique one hundred and eighteen millions of gold, and every rise of one per cent, on this sum implied a loss of more than one million dollars to the bears. Naturally the terror was extreme, for half Broad street and thousands of speculators would have been ruined if compelled to settle gold at 150 which they had sold at 140. It need scarcely be said that by this time nothing more was heard in regard to philanthropic theories of benefit to the western farmer.

“Mr. Gould’s feelings can easily be imagined. He knew that Fisk’s reckless management would bring the government upon his shoulders, and he knew that unless he could sell his gold before the order came from Washington he would be a ruined man. He knew, too, that Fisk’s contracts must inevitably be repudiated. This Thursday evening he sat at his desk in the Erie offices at the opera house, while Fisk and Fisk’s brokers chattered about him. ‘I was transacting my railroad business. I had my own views about the market and my own fish to fry. I was all alone, so to speak, in what I did, and I did not let any of those people know exactly how I stood. I got no ideas from anything that was said there. I had been selling gold from 35 up all the time, and I did not know till the next morning that there would probably come an order about twelve o’clock to sell gold.’ He had not told Fisk a word in regard to Corbin’s retreat nor his own orders to sell.

“When the next day came, Gould and Fisk went together to Broad street and took possession of the private back office of a principal broker, ‘without asking the privilege of doing so,’ as the broker observes in his evidence. The first news brought to Gould was a disaster. The government had sent three men from Washington to examine the bank which Gould owned, and the bank sent word to Mr. Gould that it feared to certify for him as usual, and was itself in danger of a panic, caused by the presence of officers, which created distrust of the bank. It barely managed to save itself. Gould took the information silently, and his firm redoubled sales of gold. His partner, Smith, gave the orders to one broker after another—‘Sell ten millions!’ ‘The order was given as quick as a flash, and away he went,’ says one of these men. ‘I sold only eight millions.’ ‘Sell, sell, sell! do nothing but sell!—only don’t sell to Fisk’s brokers,’ were the orders which Smith himself acknowledges. In the gold-room Fisk’s brokers were shouting their rising bids, and the packed crowd grew frantic with rage and terror as each successive rise showed their increasing losses. The wide streets outside were thronged with excited people; the telegraph offices were overwhelmed with messages ordering sales or purchases of gold or stocks; and the whole nation was watching eagerly to see what the result of this convulsion was to be. All trade was stopped, and even the President felt that it was time to raise his hand. No one who has not seen the New York gold-room can understand the spectacle it presented; now a perfect pandemonium, now silent as the grave. Fisk, in his dark back office across the street, with his coat off, swaggered up and down, ‘a big cane in his hand,’ and called himself the Napoleon of Wall street. He really believed that he directed the movement, and while the street outside imagined that he and Gould were one family, and that his purchases were made for the clique, Gould was silently flinging away his gold at any price he could get for it.

“Whether Fisk really expected to carry out his contract, and force the bears to settle or not, is doubtful, but the evidence seems to show that he was in earnest and felt sure of success. His orders were unlimited. ‘Put it up to 150,’ was one which he sent to the gold-room. Gold rose to 150. At length the bid was made—‘160 for any part of five millions,’—‘162 for five millions.’ No answer was made and the offer was repeated—‘162 for any part of five millions.’ A voice replied, ‘Sold one million at 62,’ The bubble suddenly burst, and within fifteen minutes, amid an excitement without parallel even in the wildest excitements of the war, the clique workers were literally swept away and left struggling by themselves, bidding still 160 for gold in millions which no one would any longer take their word for, while the premium sank rapidly to 135. A moment later the telegraph brought the government order from Washington to sell, and the result was no longer possible to dispute. Mr. Fisk had gone too far, while Mr. Gould had secretly weakened the ground under his feet.

“Gould, however, was saved. His fifty millions were sold; and although no one yet knows what his gains or losses may have been, his firm was now able to meet its contracts and protect its brokers. Fisk was in a very different situation. So soon as it became evident that his brokers would be unable to carry out their contracts, every one who had sold gold to them turned in wrath to Fisk’s office. Fortunately for him it was protected by armed men whom he had brought with him from his castle of Erie; but nevertheless the excitement was so great that both Mr. Fisk and Mr. Gould thought it best to retire as rapidly as possible to a back entrance leading into another street, and seek the protection of the opera house. There nothing but an army could disturb them; no civil mandate was likely to be served without their permission within these walls, and few men would care to face Fisk’s ruffians in order to force an entrance.

“The subsequent winding up of this famous conspiracy may be stated in few words. But no account could possibly be complete which failed to reproduce in full the story of Mr. Fisk’s last interview with Mr. Corbin, as told by Fisk himself. ‘I went down to the neighborhood of Wall street Friday morning, and the history of that morning you know. When I got back to our office, you can imagine I was in no enviable state of mind, and the moment I got up street that afternoon I started right around to old Corbin’s to rake him out. I went into the room and sent word that Mr. Fisk wanted to see him in the dining-room. I was too mad to say anything civil, and when he came into the room, said I, ‘You damned old scoundrel, do you know what you have done here, you and your people?’ He began to wring his hands, and ‘Oh!’ he says, ‘this is a horrible position. Are you ruined?’ I said I didn’t know whether I was or not; and I asked him again if he knew what had happened? He had been crying, and said he had just heard; that he had been sure everything was all right, but that something had occurred entirely different from what he had anticipated. Said I, ‘That don’t amount to anything; we know that gold ought not to be at 31, and that it would not be but for such performances as you have had this last week; you know damned well it would not if you had not failed.’ I knew that somebody had run a saw right into us, and said I, ‘This whole damned thing has turned out just as I told you it would.’ I considered the whole party a pack of cowards, and I expected that when we came to clear our hands they would sock it right into us. I said to him, ‘I don’t know whether you have lied or not, and I don’t know what ought to be done with you.’ He was on the other side of the table, weeping and wailing, and I was gnashing my teeth. ‘Now,’ he says, ‘you must quiet yourself.’ I told him I didn’t want to be quiet. I had no desire to ever be quiet again, and probably never should be quiet again. He says, ‘But, my dear sir, you will lose your reason.’ Says I, ‘Speyers’ (a broker employed by him that day) ‘has already lost his reason; reason has gone out of everybody but me.’ I continued, ‘Now what are you going to do? You have got us into this thing, and what are you going to do to get out of it?’ He says, ‘I don’t know. I will go and get my wife.’ I said, ‘Get her down here.’ The soft talk was all over. He went up stairs and they returned, tottling into the room, looking older than Stephen Hopkins. His wife and he both looked like death. He was tottling just like that. (Illustrated by a trembling movement of the body.) ‘I have never seen him from that day to this.’

“This is sworn evidence before a committee of Congress, and its humor is perhaps the more conspicuous because there is every reason to believe that there is not a word of truth in the story from beginning to end. No such interview ever occurred, except in the unconfined apartments of Mr. Fisk’s imagination. His own previous statements make it certain that he was not at Corbin’s house at all that day, and that Corbin did come to the Erie offices that evening and again the next morning. Corbin himself denies the truth of the account without limitation; and adds that when he entered the Erie offices the next morning, Fisk was there. ‘I asked him how Mr. Gould felt after the great calamity of the day before.’ He remarked, ‘Oh, he has no courage at all. He has sunk right down. There is nothing left of him but a heap of clothes and a pair of eyes.’ The internal evidence of truth in this anecdote would support Mr. Corbin against the world.

“In regard to Mr. Gould, Fisk’s graphic description was probably again inaccurate. Undoubtedly the noise and scandal of the moment were extremely unpleasant to this silent and impenetrable intriguer. The city was in a ferment, and the whole country pointing at him with wrath. The machinery of the gold exchange had broken down, and he alone could extricate the business community from the pressing danger of a general panic. He had saved himself, it is true; but in a manner which could not have been to his taste. Yet his course from this point must have been almost self-evident to his mind, and there is no reason to suppose that he hesitated.”

“His own contracts were all fulfilled. Fisk’s contracts all except one, in respect to which the broker was able to compel a settlement, were repudiated. Gould probably suggested to Fisk that it was better to let Belden fail, and to settle a handsome fortune on him than to sacrifice something more than $5,000,000 in sustaining him. Fisk, therefore, threw Belden over, and swore that he had acted only under Belden’s order. One of the first acts of the Erie gentlemen after the crisis was to summon their lawyers and set in action their judicial powers. The object was to prevent the panic-stricken brokers from using legal process to force settlements and to render the entanglement inextricable. Messrs. Field & Shearman came and instantly prepared a considerable number of injunctions, which were sent to their judges, signed at once, and immediately served. Gould then was able to dictate the terms of settlement, and after a week of complete paralysis, Broad street began at last to show signs of returning life.

“The fate of the conspirators was not severe. Mr. Corbin went to Washington, where he was snubbed by the President, and at once disappeared from public view, only coming to light again before the congressional committee. General Butterfield, whose share in the transaction is least understood, was permitted to resign his office without any investigation. Speculation for the next six months was at an end. Every person involved in the affair seemed to have lost money, and dozens of brokers were swept from the street. But Mr. Jay Gould and Mr. James Fisk, Jr., continued to reign over Erie, and no one can say that their power or their credit was sensibly diminished by a shock which, for the time, prostrated all the interests of the country.”

CHAPTER X.
GOULD AND THE WESTERN RAILWAY SYSTEMS.

After Mr. Gould was ousted from Erie, he entered into that career of acquisition which made him the master of several of the most important railroads in the United States, of the Yale system of telegraph and of the chief line of transportation in New York city. In nearly all his railroad operations he repeated, to a greater or less extent, his career in Erie. His scheme was to buy up cheap and bankrupt roads, reorganize them, issue new stock and bonds, unload on some other road, or else, by the payment of dividends, get the public interested in the property and sell at big profits. Or he would reverse the operation and take a great property and squeeze it like a lemon. His career in Union Pacific comes naturally first in order. For ten years he was master of this great system which, with the Central Pacific, constitutes the first and most important of the lines leading to the Pacific coast. His record in this road has been a matter of official investigation, and this part of Mr. Gould’s history, as well as that of the Erie and Black Friday periods, is based on sworn testimony. But first, it is but fair that Mr. Gould’s own account of his connection with Union Pacific, as stated in his testimony before the Senate Committee on Labor and Education, should be given. Having omitted all mention of Erie Mr. Gould said:

GOULD BEFORE THE CONGRESSIONAL COMMITTEE.

“I then went into the Union Pacific road. I met Horace Clark and Augustus Schell out West, and they gave me so good an account of the road that I concluded I would buy in it. I telegraphed to New York an order to buy at a certain price. When Mr. Clark got home he was taken ill, and as soon as his brokers learned that his illness was to be fatal, they sold out his stock. That broke the market and filled orders which I had sent at a price lower than I ever expected. When I got home I found myself the owner of a large amount of this property, and at once inquired into its condition. I learned that it was saddled with a large floating debt, and that there were ten million dollars of bonds coming due within a month. It was in rather a blue condition. The directors were consulting who should be the receiver. I made up my mind that I would carry it through, and I told them that if they would furnish half of the money to pay the debt, I would furnish the other half. The stock went down to 15. It was a large loss, but still I kept right on buying, so when the turn came there did not seem to be any top to it. It went up to 75, and I immediately went to work to bring the road up. I went out over it, started coal mines, and to the surprise of everybody it soon began to pay dividends and has never passed a dividend since.

“Well,” continued Mr. Gould, “when this road began to be a financial success and developed other ways there arose quite a clamor, and it was said to be Jay Gould’s road, as though it were a dangerous thing to have one man control a road. I thought that it was better to bow to public opinion, so I took the opportunity when I could to place the stock in the hands of investors. In the course of a very few months, instead of owning control of the road I was entirely out of it, and the stock was 20 per cent. higher than I had sold it for. Instead of being thirty or forty stockholders, there were between six and seven thousand, representing the savings of widows and orphans. There were also a great many lady stockholders. That was about four years ago, after Congress enacted very harsh legislation, after they had broken the bargain they had made to get the road through in its early stages.”

“You refer to the Thurman act?” asked the chairman.