Gould became rich from buying railroad lines and stocks at bargain prices and selling them for huge profits at a time when American financial markets were largely unregulated. He was almost singlehandedly responsible for the Panic of September 24, 1869, known as Black Friday, when his manipulation of gold prices caused a panic in Wall Street financial markets and a precipitous plunge in stock prices.
Jay Gould was probably one of the most notorious among the robber barons of America’s Gilded Age during the mid-nineteenth century. Gould worked his way up from poverty on a rural New York farm to fabulous wealth. He was expert at manipulating the businesses he controlled to maximize his own profits, often at the expense of business partners and stockholders. This was facilitated by the laissez-faire system that typified the capitalism of those years.
This Currier & Ives print from 1869 shows Jay Gould attempting to corner the gold market, represented by bulls and bears in a cage.
Gould made the bulk of his vast fortune (he was worth some $77 million at his death in 1892) in railroads, starting with the Erie Railroad. In the process of gaining control, he apparently bribed officials, including state legislators. He soon expanded his reach all over the country, buying up rail lines at bargain prices and artificially driving up stock prices, mainly by making false claims about profits. By the early 1880’s, he controlled more rail trackage than anyone else in the United States. Gould even bought a New York City newspaper, in which he published stories that directly aided his business ventures.
Gould made his most notorious maneuver in 1869, when he attempted to manipulate the price of gold to artificially increase its value. This was not done primarily to make a profit in the metal but as an aid to one of his ever-percolating railroad schemes. On September 24, the United States Treasury countered his moves by dumping gold, and its price plummeted, causing a ripple effect on stock prices, which also tumbled. This date has become known as
He also had some positive accomplishments. Thousands of miles of additional track were added to at least one of his railroads, and shipping rates were reduced on his routes as a consequence of his trying to force competitors out of business. Among Gould’s other business ventures were ownership of most of the New York City elevated railroad system and a telegraph company. Undeniably clever, but known for using his great business acumen mainly for self-enrichment, Gould is remembered for being the man who nearly plunged the United States into economic chaos.
Ackerman, Kenneth. The Gold Ring: Jim Fisk, Jay Gould and Black Friday, 1869. New York: Carroll & Graf, 2005. Klein, Maury. The Life and Legend of Jay Gould. Baltimore: Johns Hopkins University Press, 1986. Renehan, Edward. Dark Genius of Wall Street: The Misunderstood Life of Jay Gould, King of the Robber Barons. New York: Basic Books, 2005.
U.S. Department of the Treasury