Jay Gould: Titan or Tyrant?

INTRO

Hey everyone. Welcome back. 

A few months ago long time listener and supporter of the pod Darren suggested I produce an episode looking into the life and legacy of one of the most infamous men of the Gilded Age, Jay Gould. If you’ve been watching the HBO series The Gilded Age, then you may be more familiar with Gould than you think - the character of George Russell is inspired by none other than the railroad titan himself.  

But looking into Jay Gould is no easy feat. To date, there are only a few biographies of the magnate, likely due to the ferocity with which he guarded his privacy. He ordered that his papers be burned upon his death and rarely sat for interviews with biographers or journalists. There are some primary sources, but not enough to get to know the man behind the headlines. Much of what we know about Gould today comes from contemporary accounts written up in newspapers which in the 19th century weren’t exactly beacons of truth. That being said, Gould had an outsized influence on the evolution of the American economy and generated a tremendous amount of wealth through speculation and railroad management. He was an enigma and someone who was considered by some of his contemporaries as the supreme villain of the age. So was Jay Gould a man hellbent on world domination who would destroy anyone who got in his path? Or was he an overly ambitious tycoon seeking to protect and expand his fortune at any cost?

So grab your cup of coffee, peeps. Let’s do this. 

Jason Gould was born on May 27, 1836 in Roxbury, New York to mother Mary and father John. Entering the world prematurely, the Gould’s held off on naming the son they had longed for but soon after his birth Jason was shortened to Jay. Gould’s mother died at just 35 years old from typhoid fever and like many widowers of the era, his father remarried quickly. John Gould was unlucky in love three times over when his second wife died less than a year after marrying and a third wife died just two years into their union. Gould also lost his sister Nancy who died at 11. From what I have been able to gather, Gould’s homelife was likely devoid of much affection and support. His father, losing three wives in a matter of years, turned to alcohol and was said to be quite cruel.

Growing up with an alcoholic parent may have instilled in Gould at a young age his reserved nature. Described as short, but scrappy, Gould did not enjoy the family business - farming and spent his time devouring books - a past time his father did not support. Gould decided to leave home at 13 in pursuit of more challenging education, finding his local schoolhouse to be lacking. He enrolled into Hobart Academy and came up with a clever way to pay his tuition. Gould decided he would teach himself accounting and got a job keeping the books of a local blacksmith to pay his way. Gould considered pursuing further education by attending college, but decided that it was little more than an indulgence and that he could likely achieve the same results by teaching himself. 

Gould studied surveying believing this would be his ticket out of living a farmer’s life, producing maps of counties in New York, Ohio, and Michigan. Gould contracted typhoid in 1854 at the age of 18, preventing him from his work as a surveyor. As someone obsessed with his work, Gould rushed back before he was fully recovered, only to suffer a further setback by getting struck with a bowel infection. Again, doctors told the young man to relax and give himself time to heal. This was not welcome news to Gould who continued to work while not feeling 100%. When his sister Polly died of tuberculosis, Gould realized he needed to pace himself and decided to finally take some time to recover from his prolonged illness. Although I question exactly how much Gould was resting since in 1856, Gould published a regional history book titled History of Delaware County, and Border Wars of New York. A book, mind you, that he had to write twice since his original printer burned down. You can read the book in its entirety on the Internet Archive. 

Perhaps bored with surveying and writing books about regional history, Gould's next endeavor was leather. Partnering with the seasoned Zaddock Pratt, Gould set up shop in Pennsylvania where he learned all he could about the trade from his mentor. When the economy tightened in 1857, Gould convinced Pratt to sell his stake in the tannery business for $60,000 - the same amount of money he convinced major leather dealer Charles Leupp to pay in exchange for a two-third ownership of the tannery. Yet, it seems as though not all was right with Charless Leupp. In his fifties when he entered into the partnership with Gould, there are some who say Leupp was in the early stages of dementia - hallucinating things that were not there and developing a heightened sense of paranoia. Whether a byproduct of mental illness, or concern about potentially losing business should anyone find out that Leupp was double dealing as both dealer and manufacturer - Leupp asked Gould to keep his name off of the official partnership paperwork. Gould agreed. 

Everything seemed to be working well until Leupp committed suicide, leading to a contentious legal battle between Leupp’s other partner David Lee and Gould. Initially, Lee indicated his desire to sell his share of the business and set a meeting with Gould in New York to finalize the deal. When Gould arrived, he learned that Lee was actually planning on seizing the tannery by force. Lee gathered about 45 men, paying them in whiskey and locked himself inside the tannery daring Gould to enter - promising a fight to the death if he did, and demanding that Gould leave town immediately. Technically speaking, Lee held more shares in the business itself, but thanks to Gould’s agreement with Leupp, Gould owned the building and had the legal right to remove Lee. Realizing he was outnumbered, Gould solicited support from roughly 50 men and returned to the tannery. As the owner of the building, Gould was intimately familiar with the entrances and exits and strategically placed his supporters before entering the tannery. Gun fire broke out, but Lee had made a miscalculation. Paying his supporters in liquor meant that the men on guard at the tannery were drunk and unable to put up a sustained fight. Gould eventually overpowered the group and Lee eventually surrendered. Despite winning the quote unquote tannery war, the whole debacle left a bad taste in his mouth. A man who as a teenager told friends he was committed to becoming rich, Gould decided it was time to head east telling a friend in a letter quote, “there are magician’s skills to be learned on Wall Street and I mean to learn them,” end quote. 

After settling into the big city, Jay Gould began working as a stockbroker and was speculating in small railway securities before the first shots of the Civil War were fired. This, historian Maury Klein argues, is where Gould earned his quote unquote unsavory reputation. Gould amassed an incredible fortune and was the prime example of a self-made man. He came to New York with no family money to rely on and even fewer connections to help him get established. As one historian noted, quote: “the transformation of Gould from a trader into a business leader of national proportion was one of the most startling events in American business history,” end quote. Throughout the war, Gould dealt in railroad stocks and became the manager of the Rensselear and Saratoga Railway in 1863. 1863 was also the year Gould decided to become a family man, marrying Helen “Ellie” Miller on January 22nd after a two year courtship. Together the couple would have six children and despite earning a reputation as a stonecold businessman, Gould was a committed and loving husband and father. 

Despite his home life, Gould remained committed to building his empire when he set his eyes on the Eerie Railroad, partnering James Fisk and Eerie’s treasurer Daniel Drew to block Cornelius Vanderbilt from taking control and by purposely undercutting the value of the Eerie stock - a ploy that earned him the president’s seat in 1867. Shortly thereafter Gould partnered with former episode topic William Boss Tweed to continue the financial manipulation of Eerie stock and eventually appointed Tweed as the railroad’s director. 

In addition to his work manipulating railroad stock, Gould also tried to corner the gold market - leading to a showdown with President Ulysses S. Grant and contributed to a financial panic in 1869. Known as “Black Friday,” the financial crisis stemmed from Gould’s attempt to control the price of gold. During the Civil War, the fiscal policy of the United States shifted from using coins made from silver and gold to issuing greenbacks - or paper money - to pay its debts. While the United States shifted to issuing paper currency, Europe remained on the gold standard thus any international trade required that any merchant looking to do business overseas had to exchange greenbacks for gold - and here is where Gould saw his chance. In essence, Gould and his associates tried to convince President Grant that farmers would do better economically if the United States Treasury continued to deal in paper currency and keep its gold reserves out of public circulation. In making this argument, Gould - who had been buying up as much gold as possible - hoped that he could almost unilaterally set the price of gold and as historian Richard White explains, quote: “those involved in the import-expor trade would have to choose between paying Gould an immense premium and bankruptcy,” end quote. To help convince the president, Gould recruited Grant’s brother-in-law, his private secretary, and the assistant treasury secretary. 

Gould’s scheme almost worked, but Grant learned of the true intent behind the magnate’s recommendation and ordered the Treasury Department to release $4 million in gold into the U.S. economy. In an effort to save his sister and brother-in-law from financial ruin, President Grant shared his plans with his sister ahead of time. Word got back to Gould in time who pivoted immediately from buying up as much gold as possible to dumping what he could. This led to the value of gold to plummet from its high of $163 dollars to $133 inciting a panic and prompting a lot of public outcry against Gould. Famed author Mark Twain described Gould as quote “the mightiest disaster which has ever befallen this country,” end quote and Gould was physically attacked multiple times - including being thrown down a flight of stairs and being punched in the face by attorney Joseph Marrin over a financial dispute. 

Despite the financial setback with his failure to corner the gold market, Jay Gould had amassed a $25 million dollar fortune and continued to build his empire, refocusing on the rail. In 1874, Gould focused his attention westward and bought large blocks of stock in the Union Pacific Railroad, eventually assuming control. He continued his quest to dominate the rials of the west and by the end of 1881, Gould had acquired or owned large stakes in the Wabash and Kansas Pacific, Union Pacific, and the Missouri Pacific Railroads. In essence, Gould controlled over 15,000 miles of track, or 15% of the nation’s rail systems. Much like in the HBO series The Gilded Age, Gould had a vision for a transcontinental rail system under his control and his spent most of the remainder of his life in pursuit of it. 

Gould leveraged his ownership of these rails to seize control of other businesses such as the Western Union Telegraph Company, purchasing the company only after using smaller telegraph companies to undercut the Western Union’s value. Gould also had a brief stint as a newspaper man, owning the New York World from 1879 to 1883. And though he was hated by many, there is no denying that Gould was one of the most impactful forces driving western development. With his dedication to expanding his railroad empire, Gould helped put cities like St. Louis, Dallas, Memphis, and Denver on the map. He was one of the biggest - if not the biggest employers in the country. As Gould biographer Greg Steinmetz argues quote, “America would have developed without Gould, only not as fast or efficiently,” end quote.  

Sitting on many millions of dollars, Gould was not like his contemporaries. He did not spend vast sums of money on large mansions or overly fancy clothes. He did not publicly donate to major philanthropic causes like Carnegie and Rockefeller - though he did make private donations. Always a bit of an outsider, Gould preferred to spend his money on simpler pleasures, frequently staying at home curled up with a good book. He wasn’t completely above spending a pretty penny, however, and as a fan of flowers, Jay Gould owned the largest and likely the finest greenhouse in the United States. Gould also made one opulent purchase - a 243 foot yacht. But unlike his contemporaries who would take their yachts out in the harbor on full display or use their vessel to house a mistress or two, Gould used his yacht only for family outings. 

And while Gould was a smart business man, even he wasn’t completely unflappable. Gould’s success was built partially by his decision to borrow from the securities of his enterprises to finance his expansion which caused his debts to climb to unhealthy and dangerous levels. This worked for Gould until panic started to set in 1884, putting him at significant risk of losing everything. Sensing their opportunity to put their business nemesis out in the cold once and for all, several of Gould’s competitors attacked his company’s stocks. Whether by miracle or smart maneuvering, Gould escaped ruin by telling his competitors that he would publicly announce his inability to pay his debts. This announcement would assuredly have rippling effects throughout the U.S. economy and would prove disastrous to his competitors. Thus, the men agreed to stop attacking Gould’s empire - but not before extracting a payout for themselves. The situation proved sobering for Gould who, learning a valuable lesson, spent the next few years selling off a few assets and securing his position. But the battle left him exhausted and Gould found he could no longer put in the long hours he did as a younger man and began to suffer from insomnia and stomach ailments. 

Gould eventually contracted tuberculosis and passed away at 57. According to Gould’s obituary, at the time of his death, his net worth was estimated at 200 million dollars. When you adjust that figure for inflation, the number runs north of 5 billion. Yes billion with a B. 

Jay Gould was a speculator, financier, and railroad man who helped influence the development of the United States through devious, sometimes downright cut throat means. While some consider him the supreme villain of his era, there is no denying that Jay Gould helped drive economic growth of much of the west. His devotion to creating a rail network sparked competition and gave rise to thousands of businesses, industries, and economic opportunities. As historian Maury Klein observed Gould quote, “helped generate an economic boom that benefitted millions of Americans,” end quote. Gould is also responsible for helping drive down the costs of railroad transportation thereby making it more accessible to Americans from all walks of life. So why was Gould so hated? We can only speculate. 

And what is the answer to the question I posed at the top of the episode? Was Jay Gould a tyrant? Or just a protective industrialist? I think I will leave that for you to decide. My sincerest thanks again to Darren for suggesting I take a look into the life and legacy of Jay Gould. I always enjoy listener requests as it gives me a chance to break from the normal research and find brand new rabbit holes to explore. If you ever want me to cover a topic - let me know! You can find me on social media places like Instagram, Threads, and BlueSky or through my website at www dot civics and coffee dot com. 

I also recently launched a YouTube channel as a companion to the show where I posting bonus history content. Be sure to subscribe if you haven’t already. 

Thanks, peeps. I will see you next week.

OUTRO