Fifty years in Wall Street
signed the paper. The paper was signed by all present. The basis
of the consolidation was $50,000,000.”
When asked how he explained the payment of dividends by the
Union Pacific with a condition of affairs which requires a sale
of stock for the extinction of a floating debt, Mr. Ames said
that the declaration of the dividend was made upon the statement
of the net earnings, and the road might very well have earned
the dividends several times over and at the same time have been
building roads and borrowing money and using its funds for other
purposes, in addition to the property, which would not interfere
with the right to declare dividends. Mr. Ames also said that the
directors of the Union Pacific were largely controlled in
signing the agreement read at the forenoon session by the fact
that they were cornered by Jay Gould. “I think it has resulted
favorably for the Union Pacific,” he continued, “and I would not
take back the action if I could. I made nothing by the
consolidation, as I did not sell my Kansas Pacific stock, but
hold it now. Mr. Gould made about $3,500,000.”
Judge Dillon cross-examined Mr. Ames, and showed from his
evidence that he had no personal ends served by the
consolidation. He said that his interest in the Union Pacific is
larger now than it was in 1880, and that he is one of the
largest stockholders.
JAY GOULD AND HIS SYSTEM.
The following from the New York _Times_ of April 27, 1887, contains a
graphic account of Mr. Gould’s mode of reviewing his system of
railroads:
On first thought it seems almost impossible that Jay Gould has
only been a railroad magnate of the first class little more than
half a decade, yet such is the fact. In 1879 he owned only the
nucleus of his present Southwestern system of railroads, and as
the rival of the Wabash through considerable territory was the
Missouri Pacific, he felt by no means at ease regarding the
ultimate fate of his venture. Commodore Garrison owned a
controlling interest in Missouri Pacific, which was managed by
his brother Oliver. Commodore Garrison did not like Mr. Gould,
and would not have objected to make Gould’s purchase of Wabash a
dear bargain. He probably would have done so had it not been for
Oliver Garrison. The latter and Ben W. Lewis, Gould’s manager of
the Wabash, were close friends, and Garrison, as chief executive
of the Missouri Pacific, did nothing to injure Gould’s property.
But when Mr. Lewis called upon Mr. Gould in New York one day
toward the close of 1879, and tendered his resignation on the
ground of other interests which claimed his attention, Gould
immediately saw breakers ahead, and said so. Lewis suggested
that he remove the breakers by buying the control of Missouri
Pacific. The suggestion was not allowed to get moldy. Gould
called upon Oliver Garrison and offered $1,500,000 for the
Garrison interest in the road. Garrison was much surprised, and
said it would be necessary to consult with the Commodore. He
said, however, that $1,500,000 was at least $500,000 too low.
When the Commodore heard of Gould’s offer he rubbed his hands,
laughed, and put the price at $2,800,000. Gould retorted that he
could have bought it on the previous day for $2,000,000. The
Commodore explained that the difference between yesterday and
to-day was $800,000. Gould said nothing and retired. He made
another effort on the following day. The Commodore had been
thinking. His thoughts cost Mr. Gould $1,000,000, for his price
on the third day of the negotiations was $3,800,000. Mr. Gould
did not express his thoughts, but his speech demonstrated that
he appreciated the danger and expense of delay. He said, “I’ll
take it,” and he did. Thus from a beginning of less than 1,000
miles he secured control of a system of over 5,000, forming the
Missouri Pacific, Iron Mountain, and International and Great
Northern and their branches into one compact system. The
bargain, in comparison with the present value of the properly,
was as close a one as Mr. Gould ever managed to make, and from
the day it was closed he has lost no opportunity of extending
his railroad properly, which, with lines that are yet on paper,
but are almost certain to be built, is soon likely to embrace at
least 6,000 miles of rail.
Though the General Manager’s office is at St. Louis, and none of
the Gould roads—for the Wabash is not considered in the
system—run east of the Mississippi, nothing of importance is
transacted there without the knowledge and sanction of Mr.
Gould. Private wires run from the St. Louis office to the
Western Union Building, in which is Mr. Gould’s private office,
where he spends some hours each day sitting at a desk that never
ought to have cost more than $25.
He has traveled many times over every mile of his railroads.
There is an immensity of interest in such a trip when made for
the first time, or even the second or third, but it has been
made so often by Mr. Gould that he has thoroughly absorbed all
the pleasure to be obtained from it except that which smacks of
dollars and power. His trips occupy about three weeks from the
time his special car, the Convoy, leaves St. Louis until it
returns to that hot and dusty city of pageants and conventions.
When word is flashed to St. Louis that Mr. Gould is on his way,
every official on the system packs his head full of information,
and there is unwonted activity from Omaha to Galveston and from
Fort Worth to San Antonio. All of the system’s executive force
was selected either by Mr. Gould or by trusted officials in whom
he had implicit faith, and the heads of divisions who work for
Jay Gould could not work harder for anybody else, although in
some instances their bank accounts do not show it.
Mr. Gould lately was in the Southwest on a tour of inspection.
On his trips he is always accompanied by General Superintendent
Kerrigan, a New Yorker by birth, a South-westerner by education.
Physically they are in marked contrast. The cleanly shaven,
fair-complexioned Superintendent would make two of his employer.
In manner they are much alike, though Kerrigan has a spice of
bluffness that is lacking in the other. He has the composed,
unexcitable manner of Gould to perfection, and is never known,
no matter how great the provocation may be, to speak except in a
low-pitched tone. He is a walking railroad encyclopedia, and has
the topographical features of the Southwest—every corner of
it—at his fingers’ ends. He has been employed on railroads of
the system for over thirty years. From his Superintendent Mr.
Gould obtains such details as the latter gathers from the
Division Superintendents and other officials, but in making a
trip Mr. Gould insists upon stopping at every point included in
one of Mr. Kerrigan’s regular trips of supervision. He is always
accompanied by a stenographer, who is also a typewriter, and the
Superintendent and the heads of divisions follow the same plan.
Upon arriving at a station at which it has been decided to make
an inspection, Mr. Gould asks how long a stop will be made. The
answer may be “an hour.” Mr. Gould looks at his watch. He then
accompanies the Superintendent on a part of his rounds, listens
quietly to his talk with the railroad officials of the place,
and having heard all he cares to listen to, wanders around by
himself while the Superintendent picks up the information which
later he will give to his employer. Mr. Gould manifests no
impatience until the hour has been exhausted. But if the
engineer is not ready to start on the minute, and all hands are
not in their places on the car, he begins to fidget, and is
restless until a fresh start is made.
He is a strong advocate of method. The day’s work is laid out in
the morning and almost before the train starts in the morning he
has settled how many stops can be made during the day and where
the night can be spent. He dines and sleeps on board his car
from the start to the finish of a three weeks’ trip. At night
the Convoy is run to the quietest part of the yard, as the owner
objects to more noise than he can avoid at night, though he can
apparently stand as much as any one else in daylight. His car is
always a curiosity along the line, and people come from far and
near to look at it as it stands in the evening in a secluded
spot, secure in its loneliness. In some parts of the country
through which his roads run he is quite as much of a curiosity
in the eyes of the country folk as a circus, and were he to
stand on the platform after the manner of James G. Blaine, would
attract quite as big a crowd as that gentleman. He is never
apparently anxious to achieve notoriety in that way, and is
quite as modest in his demeanor while on one of his tours as he
is in his office or his Fifth Avenue mansion. In the latter, as
a few newspaper reporters know, he is more unassuming and far
more polite than a majority of his thousand-dollar employes.
Mr. Gould meets some odd as well as prominent people on his
trips and occasionally has a peculiar experience. On his first
visit to Galveston, Texas, he discovered that it was on an
island. Like a good many others he imagined it was on the
mainland. On this occasion a number of citizens had been
appointed to do him honor and he had promised to take up his
quarters at a hotel. The committee had neglected to secure
carriages for the party, and made a desperate effort just before
the arrival of his car to repair the omission. This it was
unable to do. There was an election at Galveston on that
particular day. It was a hot one, both the day and the election,
and everything on wheels had been bought up by the contending
parties. Twenty dollars was offered for a hack and refused. The
committee felt forlorn until Mr. Gould laughed at its dilemma
and remarked that he saw no hills that he couldn’t climb. This
is the only joke charged against Mr. Gould by the people who
live on the line of his roads, for the highest point of
Galveston is only three feet above the sea level. The
inhabitants claim four feet, and denounce as a libel the
statement made by people who live inland to the effect that tide
water is three feet higher than Galveston.
While skimming along over the International and Great Northern,
between Houston and Galveston, Mr. Gould cannot look on either
side of him without looking at land owned by A. A. Talmage,
manager of the Wabash Railroad. Mr. Talmage owns a tract or
ranch—though there are but few cattle on it—of 160,000 acres.
For this land Mr. Talmage paid 12½ cents per acre. He would
probably refuse to sell it to-day for $6 an acre. If Mr. Talmage
owned nothing else besides this ranch he might be considered
above want. Mr. Gould owns some land in different parts of the
country also, but as a proprietor of the soil he occupies a much
lower grade than Manager Talmage. George Gould probably owns as
much land—railroad land grants not considered—in the Southwest
as his father, and is always on the lookout for bargains. These
are always to be had at the close of a disastrous agricultural
or cattle season. Newcomers in Texas are liable to forget that