The farmer who ended up controlling 15,000 miles of United States railroad

There is a concept within American business historiography that is the robber barons. It refers to a whole series of entrepreneurs from the late 19th century who built their empires by taking advantage of an era of wild capitalism and using practices considered dishonorable. In this series, we have spoken of some of them, such as John Jacob Astor, Andrew Carnegie, Cornelius Vanderbilt, or Leland Stanford, and now we will speak of a great railroad magnate, Jason Jay Gould, also often included in this group.

Our protagonist was born into a family of poor farmers and soon made it clear that the harsh life of the countryside was not for him. He was able to get a basic education and then focused on mathematics and, above all, topology. This latter subject provided him with his first income, as he dedicated himself to mapping several counties in the state of New York. He also discovered the world of fur dyes and for a time was involved through association with several businessmen in the sector. In the state of Pennsylvania, in Sands Cut, he created a fur tanning plant, the largest in the country, which employed two hundred and fifty people. Over the years, that locality would change its name to become Gouldsboro, in his honor.

But where he saw a real opening to make money was in the weaknesses of some railway companies listed on the capital markets, such as the Rensselaer and Saratoga Railway and the Rutland and Washington Railway. According to some sources, to enter this market he had the key help of his father-in-law, Daniel S. Miller. At just twenty-three years old, he set about it, and perfected his methods during the Civil War by investing in public debt and gold. With the profits made, he bought enough shares of a railway company that had been dragging many financial problems for years, the Erie Railroad, to take control of it and end up being the maximum responsible. The takeover of this company, where Gould acted with several partners, was a real war against already established millionaires, such as the aforementioned Vanderbilt, and where they managed to manipulate market prices.

A more ambitious operation was the one Gould and his partners launched in 1869, which consisted of appropriating the entire national gold supply to manipulate its price. With control of this raw material, they began to sell at much higher prices than before their intervention, which made them very rich but which, in turn, led to a panic that was dubbed Black Friday. In the conspiracy, in addition to Gould, were James Fisk and Abel Corbin; the latter, brother-in-law of President Ulysses S. Grant, which made the scandal even bigger, because the conspirators had the complicity of the Secretary of the Treasury.

The reputation of being the epicenter of crony capitalism. At the time of his death, some obituaries said of him that he was the richest man in the world, even above Rockefeller and Astor.

In the last years of his life, he expanded his businesses and also gained control of Western Union –at that time a telegraph company–, the transoceanic communications cable, the Associated Press news agency, and a good handful of newspapers, such as the New York World. At the time of his death, some obituaries said of him that he was the richest man in the world, even above Rockefeller and Astor.