The Gould Standard
Miller, Kristie
The Gould Standard Wall Street's hard man with a soft touch. by Kristie Miller Jay Gould was blasted in his obituary as "a wrecker of industries and an impoverisher of men." But Edward Renehan's...
...He avoided alcohol, tobacco, swearing, and gambling (except on Wall Street...
...But he leavens the sometimes arcane financial shenanigans that involve bulls and bears, shorting stocks and watering stocks, with sketches of the entire pirate band— including Drew, Vanderbilt, the gaudy Jim Fisk, even Fisk's mistress, Josie Mansfield...
...The fact of my father's poverty is not worth one dime to me," he told a persistent reporter...
...In the 1880s, railroad companies offered the greatest potential for expansion...
...Gould's first major undertaking was the so-called Erie War, a complicated tussle over railroad stock in which Gould and his partner, Jim Fisk, took on Vanderbilt and caught Drew in a "bear trap...
...By the age of 21, Gould had come to realize that brokers "take what seems the smallest share" of an enterprise, "but is in fact the largest," since it was pure profit...
...Perhaps, Renehan suggests, this is because Gould, unlike the Rockefellers and Vanderbilts, left no large charitable bequests...
...Horatio Alger could hardly have topped the picturesque story of Gould's first job as a surveyor, making "noon marks"—a line through a farmer's window that would be struck by the noontime sun, enabling him to set a clock...
...When General Custer died at Little Big Horn, Gould observed that its result would be to "annihilate the Indians & open up the Big Horn & Black Hills to development," greatly benefiting his concerns...
...Dark Genius goes to considerable lengths to show that Gould was a tender family man who wore simple suits and pottered in his garden, was loyal to his friends and generous to his personal staff...
...More to the point is Renehan's account of Gould's behavior when Fisk, his friend and partner, was shot by a rival in love: Gould bowed his head upon his hands and wept "unrestrainedly with deep, audible sobs...
...But Edward Renehan's biography seeks to portray the railroad magnate and Wall Street financier as "an exemplary, successful, long-term CEO . . . skillfully steering all his concerns through choppy economic seas in the 1880s...
...Renehan supposes a reader with some knowledge of business transactions...
...He merely traveled for his health / And spoke in soothing tones...
...Dark Genius offers a finely nuanced portrait of Gould, the eighth richest man in American history (adjusting for inflation, Gould outranks Bill Gates, J.I...
...Gould also kept silence about his personal life, never trying to garner sympathy with his rags-to-riches backsto-ry...
...It also recalls to mind a poem about Captain Kidd in A Book of Americans (1933) by Rosemary and Stephen Vincent Benet: All the "newer history books," they wrote, "say [Kidd] never pirated / Beneath the Skull-and-Bones...
...Renehan admits that Gould hoped to make a "speculative killing," but argues that Gould was also trying to build up the Erie's freight-hauling business by raising the price of commodities...
...Later he would say that he minded bad press only because "it came back on" his family...
...those who did were further helped with scholarships...
...Clearly, only dimes, and not his personal reputation, had value for the man...
...One scandalmonger advanced a partner's suicide by two years to make it seem that Gould had been the cause of the deranged man's death...
...He maintains that Gould got bad press, not only in his own time, but also subsequently, from "three generations of biographers...
...A feeling that time was short drove him on, as did a frantic desire to escape his father's hardscrabble farm...
...Renehan mentions time and again Gould's small stature, barely five feet, and physical frailty...
...He actually cultivated his negative image, quoting Machiavelli's advice from The Prince that it was better to be feared than to be loved...
...He had found his niche...
...Gould displayed not only a genius for details but also an almost puckish sense of humor when he engaged in a rate war with Vander-bilt...
...In the process, they unwittingly enriched many small investors...
...Instead, he chose to give anonymously during his lifetime, after the press mocked his good works as feeble attempts to atone for his financial sins...
...Morgan, and Sam Walton) and delves into both his gaudy financial history and his quiet personal life...
...But it is hard not to admire one who had so little talent—or patience— for "spin...
...Renehan admits that Gould could be an "unpredictable Wall Street pirate," but insists that, unlike the "sinister" Daniel Drew—aka the Great Bear because of his brilliant and disastrous stock manipulations—Gould used speculation on Wall Street "to take control of companies he could manage, improve and merge...
...When Vanderbilt dropped the per-carload rate for cattle to a "ridiculous" one dollar, Gould and Fisk bought up all the livestock coming into Buffalo and shipped it on Vander-bilt's line, realizing enormous profits...
...His mother died when he was not quite five, a sister succumbed to tuberculosis, and Jay himself nearly died of pneumonia as a young man...
...Kristie Miller is the author, most recently, of Isabella Greenway: An Enterprising Woman...
...Renehan points out that Gould was no worse than contemporaries such as Cornelius Vanderbilt and John D. Rockefeller...
...And he was always good for colorful copy, as when the New York World noted on one parlous occasion that Gould "seemed to contemplate the coming conflagration as serenely as if he had a complete monopoly of the trade in Lucifer matches and petroleum...
...From the beginning, Renehan shows that Gould was focused, hardworking, and sober, believing, he told a friend, that "happiness consisted not so much in indulgence as in self-denial...
...Renehan notes that Gould's legend as the "Mephistopheles of Wall Street" would besmirch his genuine subsequent achievements: taking control of the Union Pacific and building up a network of railways throughout the Southwest, garnering "hard-won profits" for shareholders...
...That he lost heavily himself did not prevent him from earning an "irretrievably tarnished reputation" from this escapade...
...Gould often invited young employees to use his library...
...Gould tried some underhanded influence on President Ulysses S. Grant and, on September 24, 1869, "Black Friday," bankrupted nearly a thousand individual investors...
...Their titanic battle nearly eclipsed local press coverage of the impeachment trial of Andrew Johnson, and gave the pair of upstarts the "odd negative celebrity" of scoundrels who out-scoundreled the dastardly Drew...
...Hardly the action of a monster...
...in politics I was an Erie Railroad man every time...
...Given Gould's enormous capacity for work, this seems somewhat irrelevant...
...Interestingly enough, many details of Gould's early life (he was born in 1836) come from Gould's testimony before Senate hearings on the relations between capital and labor in the 41st Congress (1869-1870...
...Gould's next big enterprise was an attempt to corner the gold market...
...In politics, Gould avowed that "in a Republican district I was a strong Republican, in a Democratic district I was a Democrat...
Vol. 12 • October 2006 • No. 5
