The Rise of Big Business
|Digital History ID 3173|
He was the prototype for the "Robber Baron" and the corrupt railroad king. The railroad "pirate" Jay Gould stirred up the most enmity. He was painted as an unscrupulous pirate who manipulated and watered stock, deliberately running businesses down and building them up again to his own advantage.
Jay Gould considered himself to be the most hated man in late-19th century America. He was vilified by the press as a reckless speculator and brutal strikebreaker. To many late 19th century Americans, he personified the unscrupulous, greedy robber baron.
In an age of scandal and corruption, Jay Gould was regarded as a master of bribery and insider stock manipulation. He paid off President Grant's brother-in-law to learn the president's intentions about government gold sales; he bribed members of New York's legislature; and he tried to corner the gold market. But Gould was much more than a robber baron. At a time when the rules of modern American business were just being written, he was one of the architects of a consolidated national railroad and communication system. One of his major achievements was to lead Western Union to a place of dominance in the telegraph industry.
Born into poverty on an upstate New York in 1836, Gould was too sickly to go into farming. Instead, he went into surveying and then into tanning animal hides. He speculated first in hides and then in railroad stocks, engaging in one of the most colorful struggles in American business history: a fight with Commodore Vanderbilt for control of the Erie Railroad. To prevent gangs of toughs sent by Vanderbilt from gaining access to his records, Gould placed cannons on the Jersey City waterfront and launched a flotilla of four vessels of armed gunmen. As quickly as Vanderbilt bought stock in the railroad, Gould illegally issued more. When Gould was placed under the custody of a court officer for this illegal act, he bribed members of New York's legislature to change the law.
He reduced the wages of imported Chinese laborers in his mines to just $27 a month. He was damned as a speculator, rigging markets for short-term gains. But in fact he had a number of actual achievements to his name. He was actually an empire builder who sought to create railroad and communication systems capable of meeting the needs of an expanding nation. He operated New York City's elevated railroad and led Western Union to victory in its battle for control of the telegraph industry.