Fifty years in Wall Street
when even more would be needed. I wrote to Architect Mullet, calling his
attention to these facts, and insisting that, in confining the building
to three stories, he was making a mistake; that it was not in keeping
with the magnificence of the structure; that it should have one or more
additional stories, with a mansard addition besides, and that the
business experience of the past most certainly demonstrated that the
room would soon be needed by the Government for the proper conduct of
its affairs in this the greatest business center of the country. Within
a week Mr. Mullet called to see me, and I convinced him that I was
correct in my criticism and predictions. He said, in reply: “But there
is no appropriation; the money appropriated is exhausted, and the
building cannot be enlarged.” I asked him: “Well, what is necessary to
be done in the matter? Suppose I write to Mr. Boutwell, the Secretary of
the Treasury, about it, and urge that the building be enlarged as I
suggest.” Mr. Mullet approved of the suggestion, and I added: “I will
write to several members of Congress to the same effect.” This I did,
and it was not long afterward that Mr. Mullet informed me that my
efforts in the matter had been successful, and he had received orders to
go ahead and make the building four stories in height, with a mansard
roof story besides. This additional room was not needed at the time, but
it has already become inadequate for the accommodation of the Government
postal employees, and a few others who have been granted quarters there.
And now there is a proposition under consideration for the construction
of an additional Government building in this city which will cover two
blocks of ground or more, and in which may be centered the various
departments of Government, which are now scattered in a half dozen or
more places. Is not this evidence of growth? Is not this evidence of
development which justifies what has been said as to our prospective
growth? Yet this is merely incidental to the strides of progress going
on; and, if we are walking at this pace, will not our children’s
children be racing at the different paces suggested by some of the
predictions I have made?
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CHAPTER LVIII.
JAY GOULD.
HIS BIRTH AND EARLY EDUCATION.—CLERK IN A COUNTRY STORE.—HE INVENTS A
MOUSE TRAP.—BECOMES A CIVIL ENGINEER AND SURVEYS DELAWARE
COUNTY.—WRITES A BOOK AND SELLS IT.—GETS A PARTNERSHIP IN A
PENNSYLVANIA TANNERY AND SOON BUYS HIS PARTNER OUT.—HE COMES TO NEW
YORK TO SELL HIS LEATHER, FALLS IN LOVE WITH A LEATHER MERCHANT’S
DAUGHTER AND MARRIES HER.—SETTLES IN THE METROPOLIS AND BEGINS TO
DEAL IN RAILROADS.—BUYS A BANKRUPT ROAD FROM HIS FATHER-IN-LAW,
REORGANIZES IT AND SELLS IT AT A CONSIDERABLE PROFIT.—HENCEFORTH HE
MAKES HIS MONEY DEALING IN RAILROADS.—HIS METHOD OF BUYING,
REORGANIZING AND SELLING OUT AT A LARGE PROFIT.—HOW HE MANAGED ERIE
IN CONNECTION WITH FISK AND DREW.—HIS OPERATIONS ON BLACK
FRIDAY.—CHECKMATED BY COMMODORE VANDERBILT AND OBLIGED TO SETTLE.—HE
MAKES MILLIONS OUT OF WABASH AND KANSAS & TEXAS.—HIS VENTURE IN
UNION PACIFIC.—HIS CONSTRUCTION COMPANIES.—ORGANIZATION OF AMERICAN
UNION TELEGRAPH, AND HIS METHOD OF ABSORBING AND GETTING CONTROL OF
WESTERN UNION.—THE STRIKE OF THE TELEGRAPHERS AND HIS GREAT
ENCOUNTER WITH THE KNIGHTS OF LABOR AND TRADES UNIONISTS.—GOULD’S
FIRST YACHTING EXPEDITION.—AN EXCEEDINGLY HUMOROUS STORY OF HIS
EARLY EXPERIENCE ON THE WATER.—HIS STATUS AS A FACTOR IN RAILROAD
MANAGEMENT.—HIS ACQUISITION OF BALTIMORE & OHIO TELEGRAPH, &C.
If Fenimore Cooper, Sir Walter Scott, Charles Dickens or Dumas, in the
height of the popularity of any of these great writers of fiction, had
evolved from his inner consciousness a Jay Gould as the hero of a novel,
its readers would have found serious fault with the author for
attempting to transcend the rational probability allowed to the latitude
of fiction. Few novel readers, in fact, would have patiently submitted
to such a strain on their credulity prior to the era in the financial
development of this country which produced some of the leading
characters which Wall Street has brought to the front, as stern
realities of every day life, since my advent in the great arena of
speculation.
Among these Jay Gould is conspicuous, and of all the self-made men of
Wall Street he had probably the most difficulty in making the first
thousand dollars of the amazing pile which he now controls.
Jay Gould was born at Stratton Falls, Delaware county, New York, about
the year 1836. He was the son of John B. Gould, a farmer, who kept a
grocery store. At the age of sixteen young Gould became a clerk in a
variety store belonging to Squire Burnham, about two miles from the
Falls. Here, in his leisure hours, he assiduously improved the little
learning he had received at the village school, by applying himself to
the study of book-keeping in the evenings.
It was when he was at this store, according to the most reliable
accounts, that he manifested his natural aptitude for making sharp and
profitable bargains. His employer, the Squire, had his eye on a piece of
land in Albany, which he expected to obtain cheap and so make a profit.
He whispered his intention to some friend in the store and his young
assistant overheard him. When he went to put his design of purchasing
the land in execution he found that young Mr. Gould had been there
before him, and had secured the title.
About this time there was a firm which had undertaken to survey the
county and make office maps of it, and young Gould was employed to
assist them. Having mastered the elementary principles of geometry, and
being naturally quick and correct at figures, he soon became a fair
expert in common land surveying, and made himself exceedingly useful to
his employers. But the idea of not only being his own boss but an
employer of other people’s brains and muscles was one of his ruling
propensities, and he used every effort to attain this object. In a short
time he bought out the firm, wrote a history of the county to accompany
the maps and peddled his book among the residents.
This natural inclination to buy out every concern with which he has been
connected has been the ruling passion of his life, and still tenaciously
adheres to him. Prior to his negotiations with the firm of surveyors, he
had invented a mouse trap in his intervals of leisure in the store, and
with the proceeds of this and the bargain in the land, out of which he
had outwitted his employer, he was enabled to make himself master of the
situation with the surveyors. Shortly after this Gould became interested
in a Pennsylvania tannery with Zadoc Pratt, who was the capitalist.
Through the advice of Israel Corse, the Commission Merchant of the firm,
Col. Pratt proposed to dissolve the partnership. Gould induced Charles
M. Leupp & Co. to purchase Pratt’s interest for $150,000. The business
did not meet the expectations of Leupp, who in a fit of despondency
committed suicide. After his death Gould failed to retain possession of
the property, which was sold to H. D. H. Snyder, thus terminating Mr.
Gould’s career as a Pennsylvania tanner.
On his visits to New York Mr. Gould was attracted by the greater
advantages which the Empire City afforded for extending his business,
and came here to reside. He had ingratiated himself in the favorable
esteem of one of the grocery merchants with whom he had done business.
The merchant took him to his house to board and Mr. Gould fell in love
with his handsome daughter. It was a mutual affair of the heart, like
that of his son George and Miss Edith Kingdon, and a speedy marriage was
the result. The results of the happy union seem to have been all that
could be desired, and the domestic felicity of Mr. and Mrs. Gould, so
far as the public have been able to ascertain, has never suffered the
slightest jar or interruption.
The father-in-law owned shares in a railroad which was in a bad
financial condition. He employed his new son-in-law to see what he could
do to extricate him from a position in which he was likely to become
embarrassed, and he wanted to sell his shares. Mr. Gould examined the
road, (with the locality of which he had been well acquainted in his
boyhood,) saw the favorable possibilities of its future, under good
management, and instead of selling his father-in-law’s shares to a
stranger, he took them at their market value himself, purchased more,
finally obtained control of the entire property, and sold it to a rival
company at a large profit.
This, I believe, was Mr. Gould’s first transaction in railroad matters,
and from that day to this his great speculative forte has been buying
and selling railroads. It was in that kind of business, and not in the
stock market, as is popularly supposed, that he made the great bulk of
his enormous fortune.
On his entrance to Wall Street he began business alone. Afterwards he
formed a partnership with Henry N. Smith and — Martin, the firm taking
the name of Smith, Gould & Martin. Martin is now in a lunatic asylum,
and Henry N. Smith, who was the chief cause of the failure of Wm. Heath
& Co. for a million dollars, is now a poor pensioner on the bounty of
his wife. But Mr. Gould still towers aloft, in the full enjoyment and
the continued progress of his speculative prosperity, without being
dismayed by any competitor, however powerful, and overcoming all
obstacles, no matter how gigantic.
As I have noticed pretty fully some of Mr. Gould’s greatest speculative
transactions, mostly behind the scenes in the chapter on Black Friday
and also in the account of the “Commodore’s Corners,” it will be
unnecessary to repeat them here.
There was one clever transaction in the Black Friday affair that should
be put on record to the credit of the able management of that great
deal. One prominent individual connected therewith was personally
responsible for $4,500,000. This was a pretty heavy load at that time
even for him to carry, but it did not weigh very heavily upon him for
any appreciable length of time. He adroitly managed to shift it over on
to the shoulders of that broad-backed, soulless creature called the Erie
Corporation, making it responsible by simply signing himself “T. R.,”
instead of “J.G.,” the large letters representing the ordinary
contraction “Tr.” for Treasurer. By this simple and ingenious device
this shrewd gentleman got rid of the burthensome legacy on the negative
side, bequeathed to him by the “Black Friday corner.”
There is a story told, with several variations, in regard to a
sensational interview between Mr. Gould and Commodore Vanderbilt. The
scene is laid in the parlor of the Commodore’s house. It was about the
time that the latter was making desperate efforts to get a corner in
Erie, and at that particular juncture when, having been defeated in his
purpose by the astute policy of the able triumvirate of Erie—Gould, Fisk
and Drew—he had applied to the courts as a last resort to get even with
them.
They had used the Erie paper mill to the best advantage, in turning out
new securities of Erie to supply the Vanderbilt brokers, who vainly
imagined that they were getting a corner in the inexhaustible stock. Mr.
Vanderbilt was wild when he discovered the ruse and had no remedy but
law against the perpetrators of this costly prank. These adroit
financiers usually placed the law at defiance, or used it to their own
advantage, but this time they were so badly caught in their own net that
they had to fly from the State and take refuge at Taylor’s Hotel in
Jersey City.