The correspondent of the London _Times_ recently sent over here to write

up a description of the country, dwells emphatically on this

characteristic of Mr. Gould and other great millionaires and railroad

magnates, who contribute so largely to the general prosperity of which

they seem to be the indispensable mediums.

It was as the managing power in the Erie Railroad that Mr. Gould laid

the broad foundation of his fortune. His speculative connections with

Erie are more fully dealt with in the lives of Daniel Drew and Commodore

Vanderbilt. The money and influence which he gained, in connection with

the Erie corporation, enabled him to extend his operations in the

acquisition of railroad property until, through Union Pacific and its

various connections, Wabash and a number of Southwestern roads, it

seemed probable, at one time, that he was in a fair way of grasping the

entire control of the trans-continental business in railroad matters.

And this was prior to the time when he obtained his present hold on

telegraph facilities.

Some of the able schemes in which Mr. Gould has had credit for playing

an important part, and sometimes a role that was considered rather

reprehensible, were managed, so far as the outside business was

concerned, chiefly by one or more of his wicked partners. In one of the

most noteworthy of those projects, namely, the attempt to capture the

Albany & Susquehanna Railroad, Mr. Gould seldom or never appeared in

person before the public. His partner, James Fisk, Jr., was cast in that

role and played it with great ability. With the essential aid of those

two shining lights of the New York bar, David Dudley Field and Thomas G.

Shearman, the Prince of Erie, (as Jim Fisk was called,) came pretty near

snatching possession of 142 miles of a very important railroad, with the

control of only 6,500 out of 30,000 shares of the stock, and 3,000

shares of these 6,500 had been illegally obtained, as was eventually

decreed by the court.

Mr. Fisk, though the silent member of the Erie firm, had also control of

Judge Barnard, of the Supreme Court of the City and County of New York.

The Albany & Susquehanna road would have been a valuable prize for Erie.

It runs from the eastern extremity of the New York Central at Albany to

a junction with Erie at Binghamton. At that time Erie aspired to be a

successful competitor with Central for New England business, and had

determined to monopolize the coal trade between that section and

Pennsylvania. This connecting link of 142 miles was therefore regarded

as a very valuable acquisition by both the large roads. Hence it was

worth a desperate effort, and Jim Fisk showed that he had a true

appreciation of its value, for he organized a company of New York

roughs, placed himself at their head, and being armed with bludgeons and

pistols and an injunction from Judge Barnard, obtained from him in New

York city—while he was really in Poughkeepsie at the time—went to Albany

and took forcible possession of the offices of the railroad. He had the

President, Secretary, counsel and receiver of the road arrested and put

under $25,000 bonds each. Mr. Fisk went through the farce of an election

of Erie candidates for the offices which he had forcibly made vacant in

the Albany & Susquehanna, bringing his roughs up to vote as

stockholders.

The President of the road, Mr. Joseph H. Ramsey, fought stoutly for his

rights and ousted the intruders. He had spent eighteen years building

the road, and was naturally attached to it. He also found a Judge to aid

him. Justice E. Darwin Smith, of Rochester, eventually rendered a

decision in favor of the Ramsey party, with the opinion that “Mr. Fisk’s

attempt to carry the election by his contingent of ‘toughs’ was a gross

perversion and abuse of the right to vote by proxy, tending to convert

corporation meetings into places of disorder, lawlessness and riot.”

Costs were decreed to the Ramsey directors, and a reference made to

ex-Judge Samuel L. Selden, of the Court of Appeals, who fixed the

allowance to be paid by the Fisk board to the Ramsey board at $92,000.

It is worthy of note that the Fisk board consisted of the unlucky number

of thirteen.

The Erie party appealed, but long before the appeal could be heard the

Albany & Susquehanna was leased in perpetuity to the Delaware & Hudson

Canal Company, against whom the Erie party was not strong enough to go

to law. Thus ended the struggle for this great connecting link.

It is worthy of remark that this was one of the few cases in which,

where Mr. Gould made up his mind to obtain the control, possession or

ownership of property, he did not succeed.

The methods of acquiring the control and the possession of other

people’s property have been raised to the dignity of a fine art by Mr.

Gould. This art has been prosecuted, too, through “legitimate” means. He

has had the law at his back every time, and been supported in his

marvellous acquisitions by the highest Court authority.

The manner in which he managed to get Western Union into his hands

affords a very striking illustration of his methods and the great secret

of his success.

When first laying his schemes to obtain the control of the telegraph

property he got up a construction company to build a telegraph line.

This was a company of exceedingly modest pretensions. It had a capital

of only $5,000. It built the lines of the Western Union Telegraph

Company, with which Mr. Gould paralleled most of the important lines of

Western Union, and cut the rates until the older and larger corporation

found that its profits were being reduced towards the vanishing point.

Then it was glad to make terms with its competitor; a union of interests

was the result, and Mr. Gould obtained control of the united concern.

“Impossible,” said Norvin Green, in high dudgeon, when the insidious

intentions of Mr. Gould were broached to him a few months before the

settlement took place. “It would bankrupt Gould and all his connections

to parallel our lines, and to talk of harmony between him and us is the

wildest kind of speculation.” The genial Doctor was then master of the

situation in Western Union, or imagined himself so at that time, and

regarded with contempt the efforts of Gould and his colleagues to bring

the company to terms. In a few months afterward the Doctor tamely

submitted to play second fiddle to the little man whom he had formerly

despised.

The arrangement in reference to the cable companies followed the capture

of Western Union. The struggle is still pending for the entire monopoly

in the cable business, and it now seems only a question of time when the

Bennett-Mackay party will have to succumb, leaving Gould in the supreme

control of the news of the world. If this should happen he would become

an immense power for either good or evil both in speculation and

politics. In fact it would be too great a monopoly to be entrusted to

the will of one man. Although it might be judiciously managed, as the

cup of his ambition would then be surely full, yet the experiment would

be extremely hazardous.

The controlling interest in the Elevated Railroads of this city,

recently achieved by Mr. Gould through his business and speculative

relations with Mr. Cyrus W. Field, are of too recent date to require any

special notice or comment here. Suffice it to say, that I fear my friend

Mr. Field has not come out at the big end of the horn, although

everything has no doubt been in conformity with the most approved

business principles and in strict adherence to the most honorable

methods of dealing in railroad securities. It is significant, however,

that Mr. Field has preserved a prudent reticence on the subject.

Mr. Gould, from my point of view, has been a public benefactor in the

bold and successful stand which he has maintained against strikers.

Though Western Union lost over half a million dollars by the strike of

the telegraphers, which greatly alarmed the stockholders, yet Mr. Gould

held out until the strikers were obliged to give in. He pursued the same

policy, with a similar result, in the case of the Knights of Labor.

During the strike of the latter I explained my views on the subject in a

circular to my customers as follows:

“The Knights of Labor have undertaken to test, upon a large

scale, the application of compulsion as a means of enforcing

their now enlarged demands. This has necessitated a crisis of a

very serious kind. The point to be determined has been, whether

capital or labor shall in future determine the terms upon which

the invested resources of the nation are to be employed. To the

employer, it is a question whether his individual rights as to

the control of his property shall be so far overborne, as to not

only deprive him of his freedom, but also expose him to

interferences seriously impairing the value of his capital. To

the employes, it is a question whether, by the force of

coercion, they can wrest to their own profit powers and control

which, in every civilized community, are secured as the most

sacred and inalienable rights of the employer. This issue is so

absolutely revolutionary of the normal relations between capital

and labor, that it has naturally produced a partial paralysis of

business, especially among industries whose operations involve

contracts extending into the future. There has been at no time

any serious apprehension that such an utterly anarchial movement

could succeed, so long as American citizens have a clear

perception of their rights and their true interests; but it has

been distinctly perceived that this war could not fail to create

a divided if not a hostile feeling between the two great classes

of society; that it must hold in check, not only a large extent

of ordinary business operations but also the undertaking of

those new enterprises which contribute to our national progress,

and that the commercial markets must be subjected to serious

embarrassments. * * * * * From the nature of the case, however,

this labor disease must soon end one way or another; and there

is not much difficulty in foreseeing what its termination will

be. The demands of the Knights and their sympathizers, whether

openly expressed or temporarily concealed, are so utterly

revolutionary of the inalienable rights of the citizen, and so

completely subversive of social order, that the whole community

has come to a firm conclusion that these pretensions must be

resisted to the last extremity of endurance and authority.”

The manner in which Mr. Gould acquired his great control in some of the

Western and Southwestern railroads was pretty fully developed in the

recent investigation held in this city, Boston and San Francisco by the

Pacific Railway Commissioners. Mr. Gould’s testimony, as reported in the

daily papers of May, 1887, probably contains almost as correct and

succinct an account of his pooling arrangements and schemes in

connection with certain railroads and his methods of making money out of

them as can be obtained anywhere. His testimony, on the whole, was

exceedingly affable, comprehensive and precisely to the point, and has

not been contradicted in any material points by any of the succeeding

witnesses that have yet been examined on this widely interesting

subject. Its substance was as follows:

[_From the Herald, May 18, 1887._]

A dapper little man in plain pepper and salt (the pepper

predominating) business suit entered the Pacific Railway

Commissioners’ offices yesterday morning and sat down quietly

with his not over shiny silk hat on his knee.

The natty gentleman, unobtrusive possessor of the small dark and

brilliant eyes, was the man of millions.

He had lots of information for the Commission, and he gave them

more of the inside facts of the early consolidation deals of the

Union Pacific than they hoped to get.

It had been expected that Mr. Gould would prove a wily witness,

hard to corral and liable to shy over the fence at the slightest

provocation, but at the very outset his manner was a complete

surprise. He told the Commission that he was suffering from

neuralgia, and said that he could not speak very loud in

consequence. There were times during his examination that his

tone was faint, and it was only loud two or three times, when he

became very much interested in some explanation. At all times,

however, it was well modulated, and now and again had a musical

cadence about it that was very pleasing. He first became

interested in Pacific roads in 1873. He bought Union Pacific

stock in the market, but it went down to fourteen cents on the

dollar. He held about 100,000 shares. He had a consultation with

Sidney Dillon, and finally made a proposition to fund the

floating debt in bonds, of which he took a million dollars’

worth at above their par value. In 1874 he became a director and

served on the executive committee. He continued in the direction

during 1874, 1875 and 1876, and went over the road twice a year.

He had no interest in the Fisk suit, but knew it was brought. He

had no contingent interest whatever in the suit.

He became interested in the Kansas Pacific in 1878, but thought

he knew the road in 1874. He remembered a proposition looking

toward a unity of interest between the Denver Pacific and the

Colorado Central.

Being examined as to the positions of the roads, and as things

did not appear to be very clear, Mr. Gould, putting his hand to

his inside pocket, said: “I have a little map here if you are

not familiar with the location.”

The little map was brought out and all hands gathered around it,

while Mr. Gould’s index finger went on an excursion over States

and Territories in absolute defiance of the Inter-State Commerce

Law. He recalled the fact that the plan of consolidation was

considered as early as 1875, after Mr. Anderson read some

extract from a paper, but he said it was not carried out then.

He might even have had a talk with Scott about it on further

consideration.

The little road connecting with the Colorado Central was built

by him, and was the result partly of the contest between the

Union Pacific and the Kansas Pacific. Prior to 1878 he could not

recollect having owned any stock or securities of the Kansas

Pacific. His interest in the Union Pacific has increased to

200,000 shares, the total issue of stocks being 367,000 shares.

He kept books of his transactions. Mr. Morosini kept them a part

of the time.

Q. Where are the books? A. I have them.

Q. Where? A. In my possession.

Q. Are they at the service of the Commission? A. If they desire

them, with the greatest of pleasure.

This was the first sensation of the day, and the witness smiled

blandly as he felt the full force of it.

Up to this time he had answered every question promptly. There

appeared to be no hesitation on his part, and, indeed, there was

none during the entire day’s session. Almost every preceding

witness had taken refuge behind “I don’t know,” or “I cannot

remember,” or “Really I am not sure,” but there was none of this

from Gould. And the apparently full and free offer of his books

capped the climax.

After this whenever his memory was in any way at fault the

witness fell back on the books. In asking him what he had bought

certain stocks for he said the books would show.

“Will your books also show who the broker was?”

“Oh, yes; certainly, certainly, certainly.”

In the matter of the St. Louis pool he had conversed with a

number of persons.

Q. With whom did you converse? A. I presume with all the signers

of the agreement.

Q. Will you tell us all about the preliminary measures leading

up to this? A. I would have the neuralgia a good deal worse than

I have if I undertook to tell you all of the details.

This was the original proposition of consolidation, which was a

stock instead of a bond agreement, and it was soon demonstrated

that it would not work.

Q. How soon after this was the new arrangement entered into? A.

Almost immediately afterward, I think. The object was the

funding of a heterogeneous mass of securities into one class of

securities.

Q. Did you confer with others? A. I conferred with myself as

well as others. What I thought was a fair price for me was a

fair price for the others.

Q. To whom did you deliver your bonds? A. I suppose to the

committee, but I do not know.

Q. But you would not deliver $2,000,000 to a man in whom you did

not have confidence? A. Probably not.

Q. Who kept the accounts? A. I don’t know.

Q. You don’t remember? A. I don’t charge my memory with these

things after they are over, but my books will show, and they are

at the service of the Commission.

Mr. Gould’s manner in saying this was unusually suave and

polite, and the lines of his mouth relaxed just enough to

suggest a smile.

In speaking a few moments later of the securities bought by Mr.

Gould from the “St. Louis parties” he was asked of whom he

bought them.

“I cannot tell about that off-hand, but my books will show it.”

“Which of the St. Louis people did you confer with?”

“I think they came on here to see me. They were tired out and

wanted to sell, and came over to do it.”

“Then you bought all the securities first and tried to get some

other gentlemen to go in with you afterward?”

“Yes, several gentlemen whom I thought would be of service to

the road. There ought to be some books. Somebody must have kept

accounts of the transactions. My recollection is that these

people came on and told me they wanted to sell. I asked them how

much they thought they ought to have and they gave me the price

quoted in the agreement.”

“I simply said, ‘I will take them,’ and that was all there was

to it. That is my recollection. In 1879 I owned about $4,000,000

worth.”

The examination led into the stamped income bonds of the Kansas

Pacific, and Mr. Gould was asked as to the condition of the

road. He thought it was poor. The road had a large intrinsic

value, but it had been badly financed and its securities were

way down.

Q. Did you not buy some of your securities abroad? A. I bought

two millions of Denver Pacific at seventy-four cents, I think,

from some Amsterdam people. I was in London and heard that they

wanted to sell. I was afraid to go over, because I had very

little time, and thought they would probably take a couple of

days to smoke before finding out whether they would sell or not.

But I was mistaken. I went over and got to Amsterdam in the

morning; washed and had my breakfast. I saw them at eleven,

bought them out at twelve, and started back in the afternoon.

When Mr. Gould was asked as to the prices he had paid for the

securities with which he had acquired the Kansas Pacific bonds

he took out his papers and handed the Commission a series of

neatly written reports on these purchases and sales.

He purchased in 1879 St. Jo. and Denver first mortgage bonds,

$1,562,886.69, for $603,204.78.

Of these, $617,000 worth he sold to Russell Sage, F. L. Ames,

Sidney Dillon, S. H. H. Clark, Ezra H. Baker, F. G. Dexter and

Elisha Atkins for $246,800.

On January 24, 1880, he surrendered $956,779.76 in these bonds

and scrip in exchange for 9,568 shares of Union Pacific at par.

For St. Jo. and Denver Pacific receivers’ certificates to the

number of fifty-nine he paid $60,695, and on January 24, 1880,

he surrendered them for 590 shares of Union Pacific at par, or

$59,000.

Of St. J. and Denver stock during 1879 he acquired 8,819 shares,

and sold 3,806 shares to the same persons purchasing the bonds.

On January 24 he surrendered the 5,013 shares he had remaining

on hand at par for $100,200.

During the same time he bought $784,000 worth of the St. Joseph

Bridge bonds for $586,940, of which he sold to Sage and Dillon

$150,000 worth for $112,500.

He also bought 4,000 shares of stock for $6,000, making the

total cost of $634,000 bonds and 4,000 shares of stock $480,440.

Received in exchange for the whole business, 6,340 shares of

Union Pacific stock at par, making $634,000.

The gentlemen to whom Gould sold the securities were all

directors of the Union Pacific. These gentlemen, the witness

thought, retained their bonds until the consolidation, as they

were bought with a purpose. “The Denver stock was called

trimmings,” said Mr. Gould, smiling, “and went with the bonds.”

On the consolidation of the company he transferred 27,000 shares

of Union Pacific Railroad stock for new stock.

He had transferred his Union Pacific stock at one time to some

other parties on account of a peculiar law in Massachusetts,

which enables an attachment of stock on a suit, whether there

was anything in it or not.

“I found out about that law,” said Mr. Gould, “and put the stock

in somebody’s else’s name. You can’t tell anything,” he

continued, sharply, “about any stock list. There are many shares

of stock held by brokers for years.”

After the consolidation he had begun to distribute his stock

among other holders.

“I made up my mind,” he said, “it would be better to have four

or five stockholders do a little of the walking instead of one.”

Q. That idea was very much stimulated by the rise in the stock

after the consolidation, was it not? A. Yes, because the stock

went up then so much that there wasn’t enough to go round.

The witness told the story of the employing of General Dodge and

Solon Humphreys to recommend the consolidation. They were fair

men, he thought, and would make a fair report.

He had not talked to them after they went West to make their

report.

Q. How is that? A. Well, he naively replied, while they were

making their examination my interests had changed.

Q. They had changed? A. Yes, I had bought the Missouri Pacific.

Q. Did General Dodge and Mr. Humphreys look into the past

history of the road? A. I consider the future of a road more

important than its past.

Q. Yes, but what I want— A. The past was no criterion as to the

Union Pacific road.

Q. But don’t you think that General Dodge and Mr. Humphreys—? A.

“All my life,” said Mr. Gould, warming up; “all my life I have

been dealing in railroads—that is, since I have been of age, and

I have always considered their future and not their past.”

“That is the way I have made my money,” said he. “The very first

railroad I ever bought had a most deplorable past, but its

future was fair. I paid ten cents on the dollar for its bonds,

and finally sold the stock for $1.25. It was the future of the

Union Pacific that drew me into it. I went into it to make

money.”

“You were not in favor of the consolidation at the time it was

made?”

“No, my interests had changed.”

“Did you try to stop it?”

“Well,” said Mr. Gould, slowly, “my opposition to it was known

and they were greatly alarmed.”

“Who?”

“Ames, Dexter, Atkins and Dillon. They came on from Boston to

see me about it. They had heard that I was going to build an

extension to the Denver Pacific and connect the Missouri

Pacific. They said I was committed to the consolidation and laid

right down on me. I offered my check for $1,000,000 to let me

out, and I have offered it since.

“I will pay it now,” said the witness, with a strong rising

inflection of the voice and looking hard at the Union Pacific

people in the room.

“I offered them a million, but they would not let me out of the

room until I had signed an agreement to carry out the

consolidation.”

“Where is that paper?”

“I suppose it is in Boston. If I could have carried out my

Missouri Pacific plan I would have a property now that would be

worth par.”

“I don’t think you have any reason to complain of your profits

in the matter,” replied Mr. Anderson, at which Mr. Gould partly

closed his eyes to hide their twinkle, and said nothing.

The paper which he signed was an agreement to carry out the

consolidation on certain terms. The consolidation was an assured

fact after January 15, because the witness held the controlling

interest.

“But I have now ceased to be the tower of the Union Pacific,” he

said.

In asking Mr. Gould about his connection with Lawyer Holmes at

the time of the consolidation, Mr. Anderson asked him whether he

was sure about a certain conversation.

“Yes,” he said, “for I had it impressed on my mind.”

“How was that?”

“Well, I remember parting with a lot of stock at ten cents for

which I could have got par a few days afterward. Wouldn’t that

impress the occasion on your memory, Mr. Anderson?”

Everybody laughed at this, and the witness, although he had lost

a million or two, laughed as heartily as the loudest.

As far as the Denver Pacific stock was concerned Mr. Gould said

it was worth practically nothing unless the consolidation was

made. It was the signature of the Union Pacific that made it

good.

“Do you consider that the trustees fulfilled their duty in

letting this stock out of trust?” he was asked.

“I consider that it was the only thing to do, and I stand on

what was done. I am ready to take the responsibility for it that

day, or this day, or any other day.”

[_From the New York Times, May 19, 1887._]

Jay Gould gave another day to the Pacific Railway Commission

yesterday. His manner was, as usual, cool and collected, and he

was apparently full of a patient desire to tell everything he

knew. Yet Mr. Gould told very little, although he answered

hundreds of questions, some of them puzzling enough to drive a

less long-headed financier into a corner. The Denver Pacific

stock and the way it got out of the trust were first taken up.

Mr. Gould said he thought the course taken was best for

everybody. Naturally he wanted the Denver Pacific to go into the

consolidation, holding as he did, $1,000,000 of the securities,

and being trustee of over $3,000,000 more. At first it was

doubtful if the Union Pacific would take it, but it did for the

franchises. “I want to say again,” declared Mr. Gould, “that no

director or person connected with the Union Pacific ever made a

dollar out of Denver Pacific. I am glad to put a final nail in

that coffin.”

His plan at one time was to build a line from Denver to Ogden,

via Salt Lake and Loveland Pass. It would have been shorter than

the Union Pacific and obtained more local business, for the

Union Pacific ran north of the mineral belt and the Southern

Pacific south of it. After he obtained the Missouri Pacific he

saw what a good thing he had in it, but he was persuaded to give

his pledge to go on with the consolidation of the other roads.

The Boston folk became agitated within a month after he bought

the Missouri Pacific, and got the pledge from him. If the

Missouri Pacific had been put through it would have injured the

Union Pacific a great deal.

“According to the ethics of Wall Street,” Mr. Gould was asked,

do you consider it absolutely within the limits of your duty,

while a director of the Union Pacific, to purchase another

property and to design an extension of the road which would

perhaps ruin the Union Pacific?”

“I don’t think it would have been proper. That’s the reason I

let it go.”

“Did you consider your duty to the Government?”

“I had considered it.”

“How would the Government claim have been affected by building a

parallel line?”

“It would have been wiped out.”

After the Thurman bill had been sustained by the Supreme Court

Mr. Gould had a plan to build a road from Omaha to Ogden, just

outside the right of way of the Union Pacific, and give that

road back to the Government. It would give others “a chance to

walk.” The Government tried to squeeze more out of the turnip

than was in it. For $15,000,000 a road could be built where it

had cost the Union Pacific $75,000,000.

“You were not devoted to the interests of the Government?”

“I wanted to protect them. Their legislative action hurt their

own interests and put those of the stockholders in jeopardy. The

Government repudiated their own contracts. Cash was offered to

pay the Government the Union Pacific debt. I had the debt

reckoned up and offered to pay it. In 1877 or 1878 I made the

offer to the Judiciary Committee, of which Mr. Edmunds was

Chairman. I made the offer myself. The debt was estimated at

$15,000,000 or $17,000,000. But the Government would not concede

that interest terminated with the bonds. No action was taken on

the proposition.”

Mr. Gould thought he wrote his own resignation as Director of

the Union Pacific. He resigned because he ought not to deal with

the company while one of its directors. He put it in President

Dillon’s office. Mr. Dillon knew what it meant.

“What did it mean?”

“That if the consolidation went through it involved large

transactions with Jay Gould, and if I had stayed in it would

have complicated things. Before January 10, 1880, no bargain was

made to pay par for St. Jo. and Western bonds, nor Kansas

Central, nor 239 for Central Branch stock. That came afterward.”

The Colorado Central lease was canceled on account of a State

law against consolidating competing lines. Mr. Gould did not

know that the Dodge and Humphreys letter was to be presented to

the meeting of January 24. He was probably informed of the

consolidation on the day it took place. He was also probably

present at the first meeting of the new company on January 24.

Mr. Gould’s resignation from the Kansas Pacific Board was gone

over, and in summarizing his reasons for resigning Mr. Gould

said he did not want to be mixed up with trusteeships and

directorships. When he was not a Union Pacific director he felt

at liberty to take care of himself. There was a chance that the

properties might be made hostile to him, and then it would have

been improper for him to be a director. He did not know that

Russell Sage was to move the acceptance of his resignation.

“At the Kansas Pacific meeting a list of the branch lines

obtained from you was read. President Dillon said the company

had bought them. What did he mean?”

“Possibly he referred to the directors’ agreement with me.”

“But we can find no record of this in the books. Don’t you think

he referred to the agreement with the Boston gentlemen?”

“Very likely, but it had no authority until it was accepted or

rejected.”

Mr. Gould was set to explaining some discrepancies between the

accounts of his dealings in branch securities, handed in on

Tuesday, and the list submitted by Controller Mink. Mr. Mink

gave 15,162 shares of St. Jo. and Western stock, and Mr. Gould

8,119. The difference was explained by Mr. Gould’s getting some

stock for building the Hastings and Grand Island. He retained

control of the $150,000 St. Jo. Bridge bonds he sold Dillon and

Sage and turned them over with his own. His $479,000 Kansas

Central bonds and 2,521 shares of the stock cost him $431,820.25

at the time he bought the Missouri Pacific. They all went into

the consolidation for $479,000. Mr. Gould bought the Central

Branch of the Union Pacific from Oliver Ames and President

Pomeroy, who came to New York and induced him to go and look at

the property.

“I thought it was doing a big business,” said he. “Afterward I

learned they had kept the freight back for a week to impress me.

So I saw a freight train at every station when I got there. I

bought the road anyway.” Its total cost to Mr. Gould was

$1,826,500. Over the Central Branch, whose stock was disposed of

by Mr. Gould for 239, there was a little stir in the hearing,

but the witness tranquilly explained that the road was

practically stocked at only $2,500 a mile, and therefore the

stock ought to range way above par.

“Has the road earned dividends?” he was asked.

“I don’t think so.”

“Have the aggregate earnings exceeded the fixed and Government

charges?”

“I never figured it out. Stock doesn’t always depend upon

dividends altogether. I paid 750 for my Missouri Pacific—4,000

shares at that figure. You pay more for rubies than for diamonds

and more for diamonds than for glass.”

Then the examination turned to the days just after the

consolidation, and the witness was asked if there was any

corporate action of the new company before the stock was turned

over to him.

“All I know,” he said, “is that the stock of the new company was

delivered.”

“Was the new company bound to carry out the Kansas Pacific

obligations of this sort?”

“Well, I suppose it assumed the Kansas Pacific obligations.”

“Why were you not paid in Kansas Pacific consols instead of

stock?”

“I suppose they preferred stock to bonds. I was clever to them

and took stock.”

Another turn carried questions and answers to other differences

in the accounts, but the commission got little light. “It’s safe

to say the lawyers got the difference,” chuckled Mr. Gould, at

the end of the set of questions. He had made large cash

advances, at different times, to the Kansas Pacific to meet the

floating debt, and very likely these would have to be counted in

to explain matters in all cases. There was one point upon which

the witness strongly insisted, and that was that all through the

negotiations and transactions no class of people nor any

particular holders of securities experienced any discrimination

in their favor, as compared with the treatment given everybody

else.

After the consolidation Mr. Gould said he had few transactions

in Union Pacific branch lines. He had an interest in the Denver

& South Park, however, a minority interest at first, but

subsequently he bought the whole road from Governor Evans. “I’m

showing you my whole hand,” he said, cheerfully, at the end of

the catalogue of the branches. Of the Union Pacific’s legal

expenses he knew of none which were not perfectly legal.

“Who were the road’s counsel in Washington?”

“Messrs. Shellabarger & Wilson were the only ones, as far as I

knew.”

“Have you ever been to Washington on business of the company?”

“Yes. And I paid my own hotel bills.”

“Do you recall persons sent to Washington from other places in

the interest of the road?”

“Judge Usher and Mr. Poppleton.”

“Who represented the Kansas Pacific?”

“Judge Usher. I don’t know that they had anybody in Washington.”

“How often did you go to Washington for the road?”

“I was there while the Thurman bill was pending. It passed, and

I haven’t been there since. No, I take that back. I was down

before the Labor Committee. I got rather disgusted.”

“Do you know whether anything was spent to influence

legislation?”

“No, sir. I know of no such expenditure.”

“Where could we find records of such transactions?”

“I don’t think such transactions exist.”

“Do you remember advising, at a meeting, that Mr. Ordway, of

Washington, be employed in the interests of the Kansas Pacific?”

“No, sir.”

Mr. Anderson read from the minutes of a Kansas Pacific meeting,

in 1876, and Mr. Gould remembered that Senator Rollins, a great

friend of Mr. Ordway, asked him to write a letter about it. He

knew of nothing coming from the letter.

“Do you remember any talk of fighting the Credit Mobilier?”

“I saw some of their stockholders and they said they would turn

in their stock to us. Others wouldn’t. The Credit stockholders

alleged that the Union Pacific owed their company a great deal

of money. I succeeded in getting the great bulk of the stock

turned over before a judgment was obtained.”

“You remember your address to the Union Pacific president and

directors.”

“I wanted to put myself in a position to bring a suit.”

“Who opposed this proposed action of yours?” asked Mr. Anderson,

reading from the minutes of a directors’ meeting that Mr. Dexter

moved “to decline to bring suit, as requested by Mr. Gould.”

“I think the directors declined, and I brought the suits

individually.”

“There is another letter of yours to the directors, requesting

them to begin suit against the Credit for a full accounting of

all profits, under certain alleged contracts,” etc.

“I think that was on a different set of contracts.”

Mr. Frederick L. Ames, the first witness called, testified that

he was formerly a stockholder in the Union Pacific Railroad, and

is a cousin of the Hon. Oliver Ames, Governor of the

Commonwealth. He was familiar with the relations of this road

and the Kansas Pacific Road prior to 1877. “I personally

attended,” he said, “to the affairs of the road under the

direction of my father, Oliver Ames. The first dividend of the

road was paid in 1875 or 1876. I do not remember the rate paid.

I was somewhat familiar with the condition of the Kansas

Pacific. I did not think the stock of much value in 1877. Mr.

Jay Gould was instrumental in buying up the Kansas Pacific

securities in 1876. I understood that he owned a large amount of

the funding bonds and unstamped incomes. I never knew what the

respective interests of any of the gentlemen interested were. I

owned no securities that entered into that pool. I received two

certificates for $50,000 each. I have not these in my possession

now. They were turned over to somebody. These certificates were

probably issued to every member of the pool. I think I paid

$100,000 to the Farmers’ Loan and Trust Company.”

Mr. Anderson—Have you been able to find those certificates, Mr.

Mink?

Controller Mink—They are not in our possession, sir.

Mr. Anderson—It is very strange that we cannot get any clue to

these certificates.

Continuing, Mr. Ames testified as to the manner in which the

business of the pool was conducted, a copy of the consolidated

mortgage being introduced in evidence.

“I do not remember,” he said, “that I ever contributed the

$388,000 funding bonds named in this mortgage. My connection

with this pool was limited to the advancement or the $100,000.

The pooling rates and mortgage rates were identical. I was a

director in the Kansas Pacific Road in 1879. I cannot explain

why bonds were issued to persons having claims against the road

at a rate which would exaggerate its indebtedness more than

$1,000,000. I exchanged my bonds for Kansas Pacific bonds. I do

not remember that, in 1880, $2,950,000 of preferred stock was

issued to Jay Gould at 75 when the bonds were worth 94. I do not

know of any other transaction of the kind. I do not know how the

Kansas Pacific Road came to be indebted to Jay Gould for

$2,000,000 at this time. All the directors were in favor of the

consolidation except Jay Gould. He was unwilling to accede to

any such terms as we thought we were entitled to, and seemed

very much agitated at the course we had taken. The final

consummation was reached at Mr. Gould’s house. I do not remember

that we would not let Mr. Gould leave the room until he had

signed the paper. The paper was signed by all present. The basis

of the consolidation was $50,000,000.”

When asked how he explained the payment of dividends by the

Union Pacific with a condition of affairs which requires a sale

of stock for the extinction of a floating debt, Mr. Ames said

that the declaration of the dividend was made upon the statement

of the net earnings, and the road might very well have earned

the dividends several times over and at the same time have been

building roads and borrowing money and using its funds for other

purposes, in addition to the property, which would not interfere

with the right to declare dividends. Mr. Ames also said that the

directors of the Union Pacific were largely controlled in

signing the agreement read at the forenoon session by the fact

that they were cornered by Jay Gould. “I think it has resulted

favorably for the Union Pacific,” he continued, “and I would not

take back the action if I could. I made nothing by the

consolidation, as I did not sell my Kansas Pacific stock, but

hold it now. Mr. Gould made about $3,500,000.”

Judge Dillon cross-examined Mr. Ames, and showed from his

evidence that he had no personal ends served by the

consolidation. He said that his interest in the Union Pacific is

larger now than it was in 1880, and that he is one of the

largest stockholders.

JAY GOULD AND HIS SYSTEM.

The following from the New York _Times_ of April 27, 1887, contains a

graphic account of Mr. Gould’s mode of reviewing his system of

railroads:

On first thought it seems almost impossible that Jay Gould has

only been a railroad magnate of the first class little more than

half a decade, yet such is the fact. In 1879 he owned only the

nucleus of his present Southwestern system of railroads, and as

the rival of the Wabash through considerable territory was the

Missouri Pacific, he felt by no means at ease regarding the

ultimate fate of his venture. Commodore Garrison owned a

controlling interest in Missouri Pacific, which was managed by

his brother Oliver. Commodore Garrison did not like Mr. Gould,

and would not have objected to make Gould’s purchase of Wabash a

dear bargain. He probably would have done so had it not been for

Oliver Garrison. The latter and Ben W. Lewis, Gould’s manager of

the Wabash, were close friends, and Garrison, as chief executive

of the Missouri Pacific, did nothing to injure Gould’s property.

But when Mr. Lewis called upon Mr. Gould in New York one day

toward the close of 1879, and tendered his resignation on the

ground of other interests which claimed his attention, Gould

immediately saw breakers ahead, and said so. Lewis suggested

that he remove the breakers by buying the control of Missouri

Pacific. The suggestion was not allowed to get moldy. Gould

called upon Oliver Garrison and offered $1,500,000 for the

Garrison interest in the road. Garrison was much surprised, and

said it would be necessary to consult with the Commodore. He

said, however, that $1,500,000 was at least $500,000 too low.

When the Commodore heard of Gould’s offer he rubbed his hands,

laughed, and put the price at $2,800,000. Gould retorted that he

could have bought it on the previous day for $2,000,000. The

Commodore explained that the difference between yesterday and

to-day was $800,000. Gould said nothing and retired. He made

another effort on the following day. The Commodore had been

thinking. His thoughts cost Mr. Gould $1,000,000, for his price

on the third day of the negotiations was $3,800,000. Mr. Gould

did not express his thoughts, but his speech demonstrated that

he appreciated the danger and expense of delay. He said, “I’ll

take it,” and he did. Thus from a beginning of less than 1,000

miles he secured control of a system of over 5,000, forming the

Missouri Pacific, Iron Mountain, and International and Great

Northern and their branches into one compact system. The

bargain, in comparison with the present value of the properly,

was as close a one as Mr. Gould ever managed to make, and from

the day it was closed he has lost no opportunity of extending

his railroad properly, which, with lines that are yet on paper,

but are almost certain to be built, is soon likely to embrace at

least 6,000 miles of rail.

Though the General Manager’s office is at St. Louis, and none of

the Gould roads—for the Wabash is not considered in the

system—run east of the Mississippi, nothing of importance is

transacted there without the knowledge and sanction of Mr.

Gould. Private wires run from the St. Louis office to the

Western Union Building, in which is Mr. Gould’s private office,

where he spends some hours each day sitting at a desk that never

ought to have cost more than $25.

He has traveled many times over every mile of his railroads.

There is an immensity of interest in such a trip when made for

the first time, or even the second or third, but it has been

made so often by Mr. Gould that he has thoroughly absorbed all

the pleasure to be obtained from it except that which smacks of

dollars and power. His trips occupy about three weeks from the

time his special car, the Convoy, leaves St. Louis until it

returns to that hot and dusty city of pageants and conventions.

When word is flashed to St. Louis that Mr. Gould is on his way,

every official on the system packs his head full of information,

and there is unwonted activity from Omaha to Galveston and from

Fort Worth to San Antonio. All of the system’s executive force

was selected either by Mr. Gould or by trusted officials in whom

he had implicit faith, and the heads of divisions who work for

Jay Gould could not work harder for anybody else, although in

some instances their bank accounts do not show it.

Mr. Gould lately was in the Southwest on a tour of inspection.

On his trips he is always accompanied by General Superintendent

Kerrigan, a New Yorker by birth, a South-westerner by education.

Physically they are in marked contrast. The cleanly shaven,

fair-complexioned Superintendent would make two of his employer.

In manner they are much alike, though Kerrigan has a spice of

bluffness that is lacking in the other. He has the composed,

unexcitable manner of Gould to perfection, and is never known,

no matter how great the provocation may be, to speak except in a

low-pitched tone. He is a walking railroad encyclopedia, and has

the topographical features of the Southwest—every corner of

it—at his fingers’ ends. He has been employed on railroads of

the system for over thirty years. From his Superintendent Mr.

Gould obtains such details as the latter gathers from the

Division Superintendents and other officials, but in making a

trip Mr. Gould insists upon stopping at every point included in

one of Mr. Kerrigan’s regular trips of supervision. He is always

accompanied by a stenographer, who is also a typewriter, and the

Superintendent and the heads of divisions follow the same plan.

Upon arriving at a station at which it has been decided to make

an inspection, Mr. Gould asks how long a stop will be made. The

answer may be “an hour.” Mr. Gould looks at his watch. He then

accompanies the Superintendent on a part of his rounds, listens

quietly to his talk with the railroad officials of the place,

and having heard all he cares to listen to, wanders around by

himself while the Superintendent picks up the information which

later he will give to his employer. Mr. Gould manifests no

impatience until the hour has been exhausted. But if the

engineer is not ready to start on the minute, and all hands are

not in their places on the car, he begins to fidget, and is

restless until a fresh start is made.

He is a strong advocate of method. The day’s work is laid out in

the morning and almost before the train starts in the morning he

has settled how many stops can be made during the day and where

the night can be spent. He dines and sleeps on board his car

from the start to the finish of a three weeks’ trip. At night

the Convoy is run to the quietest part of the yard, as the owner

objects to more noise than he can avoid at night, though he can

apparently stand as much as any one else in daylight. His car is

always a curiosity along the line, and people come from far and

near to look at it as it stands in the evening in a secluded

spot, secure in its loneliness. In some parts of the country

through which his roads run he is quite as much of a curiosity

in the eyes of the country folk as a circus, and were he to

stand on the platform after the manner of James G. Blaine, would

attract quite as big a crowd as that gentleman. He is never

apparently anxious to achieve notoriety in that way, and is

quite as modest in his demeanor while on one of his tours as he

is in his office or his Fifth Avenue mansion. In the latter, as

a few newspaper reporters know, he is more unassuming and far

more polite than a majority of his thousand-dollar employes.

Mr. Gould meets some odd as well as prominent people on his

trips and occasionally has a peculiar experience. On his first

visit to Galveston, Texas, he discovered that it was on an

island. Like a good many others he imagined it was on the

mainland. On this occasion a number of citizens had been

appointed to do him honor and he had promised to take up his

quarters at a hotel. The committee had neglected to secure

carriages for the party, and made a desperate effort just before

the arrival of his car to repair the omission. This it was

unable to do. There was an election at Galveston on that

particular day. It was a hot one, both the day and the election,

and everything on wheels had been bought up by the contending

parties. Twenty dollars was offered for a hack and refused. The

committee felt forlorn until Mr. Gould laughed at its dilemma

and remarked that he saw no hills that he couldn’t climb. This

is the only joke charged against Mr. Gould by the people who

live on the line of his roads, for the highest point of

Galveston is only three feet above the sea level. The

inhabitants claim four feet, and denounce as a libel the

statement made by people who live inland to the effect that tide

water is three feet higher than Galveston.

While skimming along over the International and Great Northern,

between Houston and Galveston, Mr. Gould cannot look on either

side of him without looking at land owned by A. A. Talmage,

manager of the Wabash Railroad. Mr. Talmage owns a tract or

ranch—though there are but few cattle on it—of 160,000 acres.

For this land Mr. Talmage paid 12½ cents per acre. He would

probably refuse to sell it to-day for $6 an acre. If Mr. Talmage

owned nothing else besides this ranch he might be considered

above want. Mr. Gould owns some land in different parts of the

country also, but as a proprietor of the soil he occupies a much

lower grade than Manager Talmage. George Gould probably owns as

much land—railroad land grants not considered—in the Southwest

as his father, and is always on the lookout for bargains. These

are always to be had at the close of a disastrous agricultural

or cattle season. Newcomers in Texas are liable to forget that

disastrous years only occur occasionally, and that in three

favorable seasons the profits will be large enough to stand one

bad season in three. They may hear of all this after they sell

out, but the old settler is not offering information that can

only be bought with experience until it is valuable as a

mournful reflection.

The Iron Mountain Railroad has a station called Malvern. It is

44 miles south of Little Rock. As his car pulls into Malvern Mr.

Gould sees on a narrow gauge railroad that also has a station

there an engine with a diamond-shaped head-light. The narrow

gauge road runs from Malvern to Hot Springs. Mr. Gould has no

interest in it, but he knows it was built and is owned—every

spike in it—by a man who received his first start in life from

the same man who placed him on his feet. The Hot Springs

railroad is owned by “Diamond Joe” Reynolds, who was started in

business many years ago by Zadock Pratt, of the town of

Prattsville, Greene county, N. Y., when the young man lived in

Sullivan county, right across the line of Delaware county,

Penn., where Jay Gould was enabled by Mr. Pratt to tan hides

with oak and hemlock bark, not after the fashion of Wall Street.

Reynolds and Gould were assisted by Mr. Pratt about the same

time. Reynolds is not as wealthy to-day as Mr. Gould, but he

owns all the money he wants, and Mr. Gould has often said it did

not need fifty millions to secure contentment. “Diamond Joe”

Reynolds is a rich man and he spends much of his time between

Chicago and Hot Springs. On his first visit to Hot Springs he

was compelled to stage it from Malvern. The ride disgusted him

as much as the Springs delighted him. He found a man who had

obtained a charter for a railroad from Malvern to the Springs

and who had no money. The charter and some money changed hands.

Reynolds built the railroad and owns it, rolling stock and all.

The road is 24 miles long. He made his money in wheat, but not

in Sullivan county. After getting a start there he went West and

shipped wheat from Wisconsin to Chicago. He shipped it in sacks

and marked the sacks with a diamond and inclosed in it the

letters “J. O.” It was from this circumstance, because the sacks

and trade mark became widely known, that he obtained the

sobriquet of “Diamond Joe,” and not as those who have only heard

of him think for a penchant for gems, and Mr. Reynolds is modest

as well as rich.

Mr. Gould travels like a rocket while inspecting his roads. In

this way he gets a certain amount of exercise, for, as travelers

know, a heavy train drawn at the rate of 50 miles an hour will

make little fuss in comparison with the antics of a single car

tacked to an engine making the same rate. Mr. Gould often

travels in the Convoy at a 50-mile gait, and during such a trip

he has been known to change seats—from one side of the car to

the other—not of his own volition, but without changing

countenance. So long as Superintendent Kerrigan keeps his hand

off the bell rope Mr. Gould makes no remonstrance, but accepts

his shaking without a grumble. He changed engineers on one of

his recent trips without knowing it. The engineer had been

running slowly, for reasons of his own, in spite of numerous

pulls at the bell cord. When, however, he discovered that dinner

was under way he pulled the throttle open, and the locomotive

darted ahead suddenly as if going through space. The jar cleaned

the table like a flash. At the next station the engineer was

promoted to a freight train.

A REMINISCENCE OF KANSAS PACIFIC.

There is an interesting piece of information regarding the deal in

Kansas Pacific in the testimony of Mr. Artemus H. Holmes, formerly the

attorney of that company, showing how the stock made a marvelous leap

from two or three dollars to par in seven days. Mr. Holmes testified as

follows:

From 1873 to 1877 the market value of all the Kansas Pacific

securities was extremely low. The Kansas Pacific stock was $2 to

$3 a share and practically valueless. Land grant bonds were

worth 10 cents on the dollar, and Denver extension about 40, but

ranged from 50 to 70 in 1876 to 1878. The first mortgage bonds

were below par, the company’s credit was gone and the stock

unmarketable. Sidney Dillon, who was then President of the

Kansas Pacific Company, was anxious to have the matter settled

as quickly as possible. At the former’s suggestion a friendly

suit was brought on January 17, 1880, before Judge Donohue, in

the Supreme Court, in this city, to settle the ownership of the

Denver Pacific stock. The trustees said they could not do

anything with the stock that would injure it. On January 20,

1880, Horace M. Ruggles, as referee, heard argument, the case

was closed in two days, the decision was made January 23 and the

decree signed by Judge Donohue on January 24, giving the stock

to the Gould party. Mr. Holmes stated: “All the time this was

pending the articles of consolidation were being drawn up, but I

did not know anything about it until they were signed on January

24.” Referee Ruggles decided that 29,000 snares of Denver

Pacific stock free from mortgages should pass to the Kansas

Pacific. This was put into the Union Pacific and 29,000 shares

of the consolidated company’s stock given in exchange, which

sold at par. The witness was sharply questioned as to what he

knew about Referee Ruggles’ report. He was asked if he knew who

wrote the report, or had any knowledge as to who did.

Q. In order to prepare the decree which was signed on Jan. 24,

you must have had the finding before you, did you not? A. No.

Q. How could you prepare it without knowing what the finding

was, for the decree was presented the very next day? A. I must

withdraw that answer, and change it to yes.

Gov. Pattison—Do I understand you to say that the stock which

was exchanged had risen in a few days from $2 to $3 a share to

par. Mr. Holmes said that was a fact, and then this question was

put to him:

Q. In other words, Mr. Dillon had sworn on Jan. 17, 1880, that

the stock had no financial value, and yet on Jan. 24 it was

worth par. A. Yes.

This discloses another of Mr. Gould’s valuable secrets of the way to

make money rapidly.

GOULD’S FIRST YACHTING EXPERIENCE.

There is a humorous story told of Mr. Gould’s first yachting experience,

which was recently published in the Philadelphia _Press_, and its

veracity vouched for by a living witness to the event. It is

characteristic of Mr. Gould in some special respects, and runs as

follows:

At the residence of a club man, whose reputation as a

_raconteur_ is nearly as great as that of his Burgundy, I

noticed a pretty model of a jib and mainsail yacht. Replying to

my admiring inquiry the club man explained:

“That is the model of a boat upon which were passed some of the

sunniest hours of my life. She was owned by one of the Cruger

family, of Cruger-on-the-Hudson, and has an added interest from

the fact that upon her Jay Gould acquired his first yachting

experience, and so eventful a one that I’ll bet he remembers it

to this day.

“Crugers—one of the oldest and best known families in the State,

intermarried as they are with other Knickerbockers like the

Schuylers, Livingstons and Van Rensselaers—owned all the land in

the neighborhood of the station subsequently named after them. A

portion of this property consisted of a brick yard, which was

rented to the son of old Schuyler Livingston. It was in 1853 or

1854, and Jay Gould had just failed in the tannery business in

Pennsylvania.

“Young Livingston’s leased brick yard wasn’t paying, and he

concluded that it needed a shrewd business man at its head. He

advertised for a partner, and one day there appeared in response

a small, dark gentleman, looking scrupulously neat in his black

broadcloth. He gave his name as Jay Gould. Pending negotiations,

Mr. Gould became the guest of the Crugers at the old mansion on

the hill. Every effort was put forth to entertain him during his

stay, the more as he seemed to regard favorably a partnership

with their young friend.

“One day Mr. Cruger invited Gould to a sail to Newburgh, and got

ready his yacht, of which that model is the reduction. Several

of us youngsters were taken along to help work the boat. Eugene

Cruger, a nephew of the yacht’s owner, was one of us. Peekskill

was reached and the whole party went up to the hotel.

“All the way up the river we had noticed that Mr. Gould was

uneasy, shifting about constantly on the deck, where he sat, and

squirming and twisting as if seeking to find a softer spot.

Nothing was said about it, of course, but when we landed Mr.

Gould himself furnished the explanation. From the heat of the

sun the yellow paint on the boat’s deck had become baked and

chalky, and it was not long before the little man discovered

that the dry powder was coming off on his trousers. Hence his

uneasiness. He concluded by saying he was afraid his broadcloth

nether garments would be, if they were not already, ruined, and

was determined to abandon the trip and return by rail. This Mr.

Cruger would not hear of, and promised to obviate the

difficulty. We all adjourned to a general store and Cruger

bought, for two shillings and a half, a pair of jean overalls.

These Mr. Gould put on when we went aboard the boat and

expressed his unqualified satisfaction at the result.

“On our trip back from Newburgh we again called at Peekskill,

and once more the party started for the hotel. This time Mr.

Gould declined the invitation to take something and preferred to

remain on board. About an hour was spent in the hotel, when

suddenly Mr. Cruger remembered that he wanted some white lead,

and young Eugene Cruger and I went with him to the store to

carry it down to the boat.

“‘How’d the overalls work, Mr. Cruger?’ was the salutation of

the storekeeper. Then before answer could be returned, he added

admiringly: ‘That friend o’ yourn is purty shrewd.’

“‘Who, Mr. Gould? Yes, he appears to be a thorough business

man.’

“‘Well, I sh’d say so! He can drive a mighty sharp bargain.’

“‘Drive a sharp bargain?’ repeated Cruger, all at sea. ‘What do

you mean?’

“‘Why, don’t you know he was in here ’bout three quarters of an

hour ago, and sold me back the overalls you bought for him.’

“‘Thunder, no!’ roared Cruger in astonishment.

“‘Well, sir, he jest did that. He kem in here, tole me he’d no

fu’ther use for ’em, that they was as good as when I sold ’em,

an’ after we’d haggled awhile he ’greed ter take two shillin’

fur ’em, which I paid him. Here’s the overalls.’

“I can shut my eyes now,” went on the jolly club man, with a

hearty laugh, suiting the action to the words, “and call up Mr.

Cruger’s face with its mingled expression of amazement and

incredulity. He left the store in silence. Not until we had

nearly reached the boat did he speak. Then he only said, ‘Boys,

I’ll fix him for that?’ We reached home without any reference to

the incident. On the way back Mr. Gould sat upon his

pocket-handkerchief.

“The same night Mr. Cruger perfected his plan. Next day Mr.

Cruger proposed a fishing party. Mr. Gould declined to go. He

had concluded, he said, not to take an interest in young

Livingston’s brickyard, and would return to the city on the

afternoon train. A business engagement, involving quite a sum of

money, had to be kept. His host argued with him, but for a time

to no purpose. The saturnine little man had a tremendous amount

of determination in his composition. Finally a compromise was

effected, it being agreed that he should put Gould off at a

station in time to catch the train. That he must catch it

without fail, he most emphatically declared.

“The day passed on and we were off Sing Sing, when we saw the

smoke of the coming train. We had been running free before the

wind, but immediately Mr. Cruger, who was at the stick, shoved

it down; we hauled in on the sheets and headed for the Eastern

shore. Mr. Gould was by this time on his feet, clinging to the

windward coaming, the deepest anxiety pictured on his face. Just

there the water shoals rapidly. We were within fifty feet of the

shore, opposite the railroad depot. The time had now come for

Mr. Cruger’s revenge.

“‘Let go the main and jib sheets!’ he shouted. ‘Down with your

board!’

“Never was order more eagerly obeyed. The sheets whizzed through

the blocks, ready hands slipped out the pin and jammed down the

centre-board, and in a second the yacht, with a grating shock

and shaking sails, came to a stand, fast on the sandy bottom.

There she was bound to stay until the obstructing board was

lifted again.

“‘What’s the matter?’ exclaimed Mr. Gould, anxiously. Of course

he had not detected the ruse, for he knew no more about the

working of a yacht than a sea cow does about differential

calculus.”

“‘I’m afraid we’re aground,’ replied Mr. Cruger, with a fine

assumption of sadness. ‘Boys, get out the sweeps and push her

off.’

“We struggled with the long oars in a great show of ardor, while

Gould watched us in breathless suspense, between hope and fear.

But as we had taken care to put the sweeps overboard astern, the

harder we shoved the faster we stuck. The little man’s

suspicions were not in the slightest degree aroused and he

turned in despair to Mr. Cruger.

“‘What shall I do!’ he almost wailed. ‘I’ve got to catch that

train!’

“‘Then,’ replied the joker, solemnly, ‘you’ll have to wade or

swim.’

“Already the train was in sight, two miles away, and whatever

was to be done had to be done quickly. As I have said, there was

plenty of grit in the embryo railroad king, and quick as a wink

he was out of his sable clothes and standing before us clad only

in his aggressively scarlet undergarments. Holding his precious

broadcloth suit above his head, he stepped into the water,

which, shallow as it was, reached to the armpits of the little

gentleman. Then he started for the shore, his short, thin legs

working back and forth in a most comical fashion as he strove to

quicken his pace. The station platform was crowded with people,

and very soon the strange figure approaching them was descried.

A peal of laughter from 500 throats rolled over the water to us,

the ladies hiding their blushes behind parasols and fans. The

men shouted with laughter. Finally the wader reached the base of

the stone wall, and for a moment covered with confusion—and but

little else—stood upon the rock, one scarlet leg uplifted,

looking for all the world like a flamingo on the shore of a

Florida bayou, while the air was split with shrieks of laughter,

in which we now unreservedly joined. Then came the climax of the

joke, which nearly paralyzed the unfortunate victim.

‘Haul on your sheets, boys, and up with the board!’ was Cruger’s

order. As the yacht gathered headway and swept by within ten

feet of the astonished Mr. Gould, we laughingly bade him

good-bye, advising a warm mustard bath when he got home.

“Then his quick mind took in the full force of the practical

joke we had worked upon him and his dark face was a study for a

painter. But the train had already reached the station, taken on

its passengers and the wheels were beginning to turn again for

its run to the city. As Gould scrambled up the wall, his glossy

black suit still pressed affectionately to his bosom, the ‘All

aboard!’ had sounded and the cars were moving. Every window was

filled with laughing faces as he raced over the sand and stones

and was dragged by two brakemen on to the rear platform, panting

and dripping. The last glimpse we caught of him was as the train

entered the prison tunnel. Then, supported on either side by the

railroad men, he was making frantic plunges in his efforts to

thrust his streaming legs into his trousers as the platform

reeled and rocked beneath him.”

“Did he ever return Mr. Cruger the two shillings?” the writer

inquired.

“Return the two shillings!” echoed the club man. For a moment he

was silent. Then, as a retrospective gleam crept into his eyes,

he slowly shook his head and, with seeming irrelevancy, said:

“I—guess—you—are—not—very—well—acquainted—with—Mr.—Jay—Gould.”

The above story was submitted to Mr. Eugene Cruger at his

residence, No. 1211 Livingston Avenue, together with the inquiry

as to its accuracy. Mr. Cruger made the following reply: “I must

say that I can’t imagine who can have furnished these

particulars, for most of those who took part in the incidents

related have gone forever. Whoever the informant may be,

however, it cannot be denied that you have received a true

account of what occurred. I enjoyed the affair at that period,

but time has softened things and the recollection is not without

its unpleasant side.”

The success of Mr. Gould in securing the Baltimore and Ohio Telegraph to

be consolidated with Western Union, has placed him at the head of the

greatest telegraph monopoly in the world, practically beyond

competition. It remains to be seen whether or not Congress will take any

action towards the creation of a Government telegraph that will afford a

guarantee of protection against extortionate rates. It is true that

Western Union has lowered its rates, but this is generally regarded as a

conciliatory move of a temporary character on the part of Mr. Gould for

the purpose of showing that Government telegraphy is not a necessity,

and that as soon as the attention of Congress is turned away from the

question rates will go up again.

While I should not approve of the Government going so far as to condemn

Western Union property, and making a purchase thereof on an appraised

valuation, still I do believe that proper Congressional action should be

taken to provide supervision and protective control over the telegraphic

communication throughout the country. My idea is that the Government

should interfere rather as a regulator than an owner, being careful to

avoid everything that could be construed into monopoly on its own part,

any more than in connection with our railroad system.

Mr. Gould went to Europe late in the fall, and visited several places

there ostensibly for health, pleasure, and recreation. What his secret

and ultimate designs may be has not yet transpired, although they have

been a leading topic of much conjecture among financiers and Wall Street

magnates since his arrival on the other side. One of the best things got

off on this subject was, that when Mr. Gould sent in his card to one of

the Rothschilds, the latter requested the messenger to inform the

gentleman that Europe was not for sale.

He returned about the end of March to find some of his railroads,

especially in Missouri Pacific system, in a somewhat crippled condition.

With a feeling of deep humility that I have made many important

omissions in Mr. Gould’s variegated career, although I have surrendered

all the space to him that I can very well afford, I now beg to take my

leave of him, at least so far as the present edition is concerned.

[Illustration:

_Cyrus W. Field._

]

------------------------------------------------------------------------

CHAPTER LIX.

MEN OF MARK.

CYRUS W. FIELD—HON. STEPHEN V. WHITE—AUSTIN CORBIN—PHILIP D. ARMOUR—HON.

LEVI P. MORTON—JOHN A. STEWART—ANTHONY J. DREXEL—THE JEROME

BROTHERS—ADDISON CAMMACK—RUSSELL SAGE—CHAUNCEY M. DEPEW—JAMES M.

BROWN—STEDMAN THE POET—VICTOR H. NEWCOMBE—MOSES TAYLOR—FORMER GIANTS

OF THE STREET—HENRY KEEP—ANTHONY W. MORSE.

CYRUS W. FIELD.

Cyrus W. Field has been termed a locomotive in trousers. The simile

illustrates the indefatigable energy of the man. His indomitable

resolution and his energy of character have placed him high among the

distinguished men of the age. He was born at Stockbridge, Mass., in

1819. His father was a clergyman. At fifteen years of age, Cyrus W.

Field came to New York with a trifling sum in his pocket. For three

years he was in the employ of A. T. Stewart, the dry goods merchant, and

then went to Lee, Mass., to work in his brother’s paper mill. Two years

later he became a partner in the paper firm of E. Root & Co., in Maiden

Lane, but the co-partnership was not successful. Later on he again went

into the paper business, and by 1853 had acquired a competence,

whereupon he partially withdrew from mercantile pursuits, and his health

having failed he took a trip to South America. He was about to withdraw

entirely from business, when he was induced, with considerable

difficulty, to look into a project for laying a telegraphic cable to

England. Frederick N. Gisbourne had interested Matthew D. Field, a civil

engineer, and a brother of Cyrus W. Field, in a project for establishing

a telegraph line between New York and St. John’s, Newfoundland, partly

on poles, partly under ground, and partly under water. At St. John’s,

the fastest steamers ever built were to sail for Ireland, and the time

between the two countries was to be shortened to six days or less. A

company had attempted to carry out this project, and had become

bankrupt. The idea was un-American; it was unsatisfactory; much quicker

communication was needed. It was not till Mr. Field conceived the idea

of laying a cable direct from Newfoundland to Ireland, that he became

really interested in the enterprise. He was assured by high scientific

authority that the idea could be carried out. In March, 1854, Mr. Field

went to St. John’s, Newfoundland, and obtained from the legislature a

charter, granting an exclusive right for fifty years, to establish a

telegraph line from the Continent of America to Newfoundland and thence

to Europe. Then, with considerable difficulty, he obtained in New York

subscriptions amounting to $1,500,000, which he thought would be

sufficient. The line really cost $1,834,500, being more than 2,600 miles

long. His first attempt failed in 1857. He succeeded in the following

year, and then the cable became silent, and the incredulous public

thought that this would end all attempts to do something that seemed

miraculous. For seven years no attempt was made to lay a cable, as the

Civil War intervened, but in 1865 Mr. Field again took up the

enterprise, in which he had never lost faith. By this time sub-marine

telegraphy had been greatly improved, a better cable was constructed,

and a better machine for laying it was invented. The famous steamer

_Great Eastern_ took the cable, but after going some 1,200 miles, the

great vessel gave a lurch that broke the cable and an attempt to grapple

it was unsuccessful. In 1866, however, a cable was successfully laid. A

private citizen seldom receives such honors as was showered on Mr.

Field, in 1866, when Europe and America realized that largely through

the exertions of one man, they were joined by the Atlantic cable. He had

pushed a vast project to a successful consummation in spite of

incredulity, ridicule, indifference and strenuous opposition.

Peter the Hermit did not preach the crusade with more fervor and

enthusiasm than this priest of commerce, so to speak, advocated the

great work with which history will always link his name. If any one had,

a few centuries ago, ventured to predict that the day would come when

there would be six or seven cable telegraphs stretched along the ocean

bed between America and Europe—along dim prehistoric valleys, four miles

under water and over great sub-marine mountains—by means of which a

message could be sent nearly three thousand miles and an answer received

in thirty seconds; he would have been in danger of incarceration as a

lunatic, or even of death on the scaffold or at the stake. This daring

utilitarian age, however, has grown accustomed to startling exhibitions

of human ingenuity. Mr. Field owns considerable Western Union stock, and

is interested in a number of railroads, including the Manhattan

Elevated. He owns one-fifth of the stock of the Acadia Coal Co., is a

special partner in the grain firm of Field, Lindley & Co., and owns the

_Mail and Express_, one of the great papers of the metropolis. He has a

house in Gramercy Park and a fine mansion at Irvington on an estate of

about 500 acres. He is a large owner of real estate in that very

pleasant section, owning some 56 houses besides considerable land. He is

fully six feet in height, of light complexion, with penetrating,

bluish-gray eyes, which peer sharply into those of an interlocutor. The

nose is prominent, the brows knit with years of thought, the mouth and

jaw indicate great decision of character. He is a man of courtly manners

and exceptional abilities.

[Illustration:

_Philip D Armour_

]

HON. STEPHEN V. WHITE.

Hon. Stephen V. White is a short, compactly built, dark-complexioned man

of 54. In manners he is courteous and unassuming; in business methods he

is quick and straightforward. He is a Director in the Western Union and

the Lackawanna road. He is a bold, dashing operator in stocks, and in

Wall Street has met with considerable success. One of his greatest

favorites is Lackawanna. He expects to see it some day go to 200. He has

several times badly squeezed the shorts in that stock, and, now that he

has practically demonstrated what they ought to have known before,

namely, that the stock can easily be cornered, the bears are apt to

fight shy of it. He has a large _clientele_, and, being a natural

leader, he has plenty of followers in his speculative campaigns. He was

born in North Carolina. He was graduated from Knox College at Galesburg,

Illinois. He studied law in the office of the Hon. John J. Kasson,

afterward United States Minister to Germany. He drifted to St. Louis,

and there became a reporter for the Missouri _Democrat_. He went to Des

Moines, practised law for nine years, and was elected a Judge. He came

to New York, and for a time practised law, but soon became a stock

broker as well. He still occasionally appears as counsel in the Federal

Courts, and sometimes in the Supreme Court of the United States. He is a

ready and forcible speaker, full of vim and fire. He was a warm personal

friend of the late Henry Ward Beecher, the grand old Chrysostom of the

nineteenth century, who has left the world brighter for his memory and

darker for his absence. In the frank, keen, practical financier and

lawyer, and the great, warm hearted preacher, glowing with fervid

idealism and generous enthusiasm and high aspirations for the human

race, there were kindred qualities that made them friends. Mr. White, in

1886, was elected to Congress from Brooklyn, where he resides. He is

scholarly in his tastes, well versed in the classics, and is especially

fond of astronomy, for the study of which he has a fine observatory in

his palatial home. He is popular in Wall Street.

[Illustration:

_L. P. Morton_

]

AUSTIN CORBIN.

Within a year Austin Corbin has become a prominent figure in the

financial world, winning wide business celebrity by his identification

with the reorganization of the Reading Railroad. He is by nature the

reverse of an iconoclast, namely, a builder up. He would construct

rather than destroy. He would save a property if it were at all

possible, and in pulling that poor, tired, financial pilgrim Reading out

of the slough of despond, and in directing its way toward a primrose

path of prosperity, he is engaged in a congenial task. He is about 58

years of age, and was born in Newport, New Hampshire. He studied law,

and was graduated from the Harvard Law School. For a time he practised

law in his native town as a partner of Ex-Governor Metcalf, of New

Hampshire, but in 1851 he went to Davenport, Iowa. There he really

organized the first national bank under the new system, which was to

prove of such incalculable financial benefit to the nation. Mr. Corbin

made the first application under the new law, but it happened to be

faulty in some minor technicalities, and before their trivialities could

be corrected four other national banks were organized, so that his bank

became number five under the new system. He came to New York in 1865,

and established a banking-house here. He is President of the Reading,

Long Island, Indiana, Bloomington & Western, Elmira, Cortland &

Northern, and Manhattan Beach Railroads. He is a member of the Union

League, Manhattan and Saturday Night Clubs of New York, the Somerset

Club of Boston, and the Conservative Club of London. He is a man of

strict probity, genial in his manners, and deservedly held in high

esteem.

PHILIP D. ARMOUR.

Philip D. Armour was born in a little village near Watertown in the

interior of New York State, in 1832. He is powerfully built, with broad

shoulders, a large head and firm, square features and light gray eyes,

that never seem excited or disturbed. His manners are quiet, composed

and courteous. In 1849, leaving his native village, he went to

California. He crossed the plains with a six-mule team which he drove

himself. He worked for a few years in the gold fields, accumulated a

little capital, and in 1855 went to Milwaukee and engaged in the grain

and warehouse business. He prospered moderately but steadily. Then he

thought of going into the lumber business, but bought an interest in the

pork packing establishment of Layton & Plankington, the former retiring.

At this time he was worth half a million. He soon increased this

three-fold. In the war, provisions were very high, but when Gen. Grant

was closing in on the Confederacy for the final struggle that could only

end in the triumph of the North, Mr. Armour saw that prices must come

down with the Confederacy. He came at once to New York and began to sell

pork short. He began to sell at $40 a barrel. He covered at $18 and

netted, it is said, nearly two million dollars. He now enlarged his

business, established new packing houses in Chicago and Kansas City as

well as agencies all over the world. He has sold sixty million dollars’

worth of food products in a year. He has five thousand names on his pay

roll. He has cornered pork three times within recent years, and in 1880

made, it is said, three millions in punishing bears who tried to sell

the market down. A campaign against the bears in pork or meats he calls

protecting his cellars. Those cellars are well protected. No bearish Ali

Baba has the pass-word to go in and plunder them, and the number of

cinnamons and grizzlies, big and little, who have licked their paws in

rueful remembrance of the attempt are not a few. He has made millions in

successful grain speculations. He invested four millions in St. Paul

stock, buying it outright. He is now one of the recognized financial

leaders of the country, as aggressive as a Wellington at the proper time

and cautious as a Fabius when caution is the watchword of wisdom. He

lives in a plain house on Prairie Avenue in Chicago, and is himself a

man devoid of ostentation. He works from 7 A. M. till 6 P. M. His

fortune is estimated at fifteen millions of dollars.

Hon. Levi P. Morton received his business training in the dry goods

trade. Then he became a banker. He has a national reputation as a

financier. He is shrewd, genial and successful. President Garfield made

him Minister to France. He had previously done good service as a member

of Congress. He is now in his sixty-third year. He is a lineal

descendant of George Morton, one of the Pilgrim Fathers who came to this

country in 1623. Mr. Morton was born in the State of New Hampshire. At

20 he became a clerk in a country store. He had to shift for himself.

Necessity is the stimulus that men of real ability require. He stayed

five years in the obscure New Hampshire village and then went to Boston,

where he ultimately engaged in business. But New York attracted him. He

embarked in the dry goods business here and went into banking

afterwards, and soon laid the broad foundations for the successful firms

of Morton, Bliss & Co., of New York, and Morton, Rose & Co., of London.

His Congressional and diplomatic laurels followed. He filled the French

Mission with great satisfaction to the French people as well as those of

the American traveling public, as he was a free and generous

entertainer. His large fortune has been amassed since he came to Wall

Street. He has a fine villa at Newport and also one on the Hudson.

[Illustration:

_John A Stewart_

]

JOHN A. STEWART.

John A. Stewart is President of the United States Trust Company, one of

the largest banking and trust corporations in America. Its deposits are

over forty millions of dollars. Its great success is largely due to the

able management of President Stewart, who has in fact shown marvellous

ability in the management of large financial interests. Mr. Stewart

during the war period was urged by Secretary Chase to became

Sub-Treasurer of the United States in this city, and he finally

consented to take the position, although at a great personal sacrifice,

being actuated solely by a patriotic spirit. He is one of the financial

lights of the metropolis, and is respected for his financial acumen and

his sterling qualities as a man.

ANTHONY J. DREXEL.

Anthony J. Drexel is the head of the house of Drexel & Co. in

Philadelphia and Drexel, Morgan & Co. in New York. The house was founded

by Joseph Drexel, who emigrated to this country from Germany early in

the present century, and began business in Philadelphia in a small way

as a sort of exchange broker. When the California gold fever broke out

he made connections with parties in San Francisco and received large

amounts of gold. In these transactions he got his first great start. The

returns from the exchange were large. As his means increased he

gradually extended his business, and finally, by thrift and diligent

attention to business, he accumulated quite a snug fortune. In the end

he built up a successful banking business, in which his sons became

interested, and at his death inherited his wealth and the business. The

elder brother died a few years ago, leaving ten million dollars to his

family and to various charities. Anthony Drexel, the present head of

this signally successful firm, is 55 years of age, and is a man of

excellent business capacity. He is one of the successful business men of

the United States.

THE JEROME BROTHERS.

Addison Jerome, who died some years ago, was a gigantic operator in his

day, and displayed great ability in the conduct of speculative

campaigns, but he went beyond his depth and disaster followed. Like many

others in Wall Street, he gained his business education in the dry goods

trade. He met with one of his greatest reverses in his attempt to corner

Lake Shore. Others followed, one after another, and the end was

financial shipwreck.

[Illustration:

ANTHONY J. DREXEL.

]

[Illustration:

_yours truly

Leonard W Jerome_

]

At this time his brother, Leonard W. Jerome, was one of the foremost men

of Wall Street and was a partner of Wm. R. Travers, the firm name being

Travers & Jerome. Leonard Jerome is splendidly built and nearly six feet

in height. His ancestors were Huguenots. He was born in Pompey, Onondaga

county, New York. His grandfather was a Presbyterian clergyman. At 14

Leonard was sent to Princeton College and was graduated with credit. He

then spent three years reading law in Albany, and at 22 was admitted to

the bar. He practiced law with his uncle, Judge Jerome, of Rochester.

Afterward with his brother Lawrence he established a newspaper, called

the _Rochester Native American_, and he made a good editor. President

Filmore appointed him Consul at Trieste. He came to Wall Street in 1854.

His first operation was in putting up all he could spare, about two

thousand dollars, as margin on five hundred shares of Cleveland and

Toledo stock, one of the old-time speculative favorites. He bought it on

a sure point from the treasurer of the road. He bought. The treasurer

sold. Result: The stock fell, and Jerome lost all his spare funds. He

was not discouraged. He studied Wall Street tactics, and in the end he

made the treasurer pay dearly for his former success in spearing a lamb.

He invested $500 in buying calls and made $5,000 within thirty days. He

became a partner of William R. Travers. They were very successful on the

short side of the market. He was to meet with some reverses, however. In

1862 the agent of the State of Indiana, in a manner that would have

deceived the very elect, through an unauthorized issue of Indiana 5 per

cent. bonds, swindled him out of $600,000 by the hypothecation of the

bonds. The State repudiated the acts of its agent, and as an individual

is not allowed to sue a State, Mr. Jerome was robbed of the money. Still

another reverse was met in Pacific Mail. When the capital stock was

increased to $20,000,000 he took 50,000 shares at 200. The price

advanced soon thereafter to 243, and he sold a part of his stock, but

kept a large block of it on account of his faith in its value. At the

next quarterly meeting of the Board of Directors, however, it was

decided by a majority of one, five directors being present, to reduce

the dividend from five to three per cent. The street was thunderstruck

at the audacity of this move; the market broke, and in two hours Mr.

Jerome’s stock depreciated $800,000. Still he made large gains in

Pacific Mail as well as big losses. He left Wall Street years ago with

an ample fortune. He went there with next to nothing, and in spite of

reverses, came out a substantial victor in the financial tourney. In the

war he was always enthusiastic in his devotion to the cause of the

North, and subscribed with princely liberality to aid patriotic

movements. When the first great Union meeting was held at the Academy of

Music he paid all the expenses. He was Treasurer of the Union Defense

Committee, and he likewise paid all of its incidental expenses. He was

the most liberal in his contributions and the most devoted in his

allegiance to the Government in its darkest and gloomiest hours. He was

the founder of the fund for the benefit of the families of those who

were killed or wounded in the New York riots of 1863, growing out of the

draft. His checks for $10,000 and more to aid the Union arms were

frequent; he contributed $35,000 toward the construction of the

“Meteor,” a war vessel built to destroy the famous “Alabama” of the

Confederacy. During the war Mr. Jerome purchased and held for some years

the largest interest in the _New York Times_, then edited by the great

war editor, Henry J. Raymond, an old friend of Mr. Jerome’s. Like Mr.

Travers, his early partner, Mr. Jerome has done much to encourage all

out-of-door sports, especially on the race course. He established the

Jerome Park Jockey Club, and became half owner in a famous speed horse

which cost $40,000. No one has done more to improve the breed of blooded

horses in this country than Mr. Jerome. He has also been prominent in

yachting. He first owned the “Undine”; then, with Commodore McVickar, he

bought the “Restless,” and still later, with Commodore James Gordon

Bennett, the “Dauntless.” He paid $125,000 for the steam yacht “Clara

Clarita,” which proved a failure, and since then he has not been so

enthusiastic a yachtsman as formerly. He made $45,000 on the great ocean

yacht race of 1866. He had much to do with introducing the taste for

four-in-hands in this country. He has been a liberal patron of American

art in all its branches. He paid for the musical education of a number

of well-known singers, whose voices were trained in the best Italian

schools. His social position has always been high, but it has been still

further promoted by the marriages of his beautiful daughters. The elder,

Clara, is married to Mr. Morton Frewen, a member of an old English

family which long represented their shire in Parliament. Another, Leoni,

married Mr. John Leslie of the Guards, and son and heir of Sir John

Leslie; while Jennie married Lord Randolph Churchill, the notable but

erratic statesman. Leonard W. Jerome, whose history I have followed

somewhat minutely, is one of the best-hearted men that Wall Street ever

knew. The more he made the more he gave. He was liberal to a fault. He

was never happy but when making others happy. He was a Sir Philip Sidney

of chivalry and peerless generosity—a man in whom the warmest and most

ingratiating traits of human nature were as natural as the winning

sunniness of his disposition and the courage which once made him one of

the great gladiators in the arena of Wall Street. Both he and his

brother Lawrence are old members of the Union Club. Lawrence was

formerly a stock broker. He had his ups and downs, and withdrew from

Wall Street several years ago. He sold his seat in the Stock Exchange

and placed the proceeds, about $30,000, in an annuity which insures him

about $4,000 a year for the remainder of his life. This, with his other

income, places him in easy circumstances and preserves his naturally

cheerful disposition, rendering him one of the most companionable men in

the city. He is about five feet ten inches in height, stout and of light

complexion. Since the death of his old friend, Wm. R. Travers, to whom

he was as Damon to Pythias, he stands pre-eminent among the wits of New

York. He is the prince of metropolitan wags and wits. His friends are

legion. The great, genial, warm hearted, boyish Larry Jerome, as his

friends love to call him, is literally a man without an enemy, and long

may he live to brighten society with his happy exuberance of spirits,

his scintillating humor and his brilliant wit.

ADDISON CAMMACK.

Addison Cammack is about sixty years of age and was born in

Hopkinsville, Kentucky. He was reared in comfortable but humble

circumstances. Early in life he began his business career as a clerk in

the house of J. P. Whitney & Co., then the largest ship brokers in New

Orleans. He showed decided business talent, and ultimately became a

partner in the firm. In the early part of the Civil War he was located

in Havana, but in 1863 he went to London and and engaged in business and

speculation there. He returned to this country in two years, and in 1866

embarked in the wholesale liquor business in New York with J. W. George,

the firm being J. W. George & Co. In about two years the firm was

dissolved and Mr. Cammack became a member of the Stock Exchange, having

previously formed a co-partnership with the late Chas. J. Osborn, under

the name of Osborn & Cammack. This co-partnership, after some years of

great prosperity, was dissolved, and since then Mr. Cammack has been an

operator on his own account. In this capacity he has become widely

known. He is a shrewd operator, and quickly changes his mind if he

thinks he has been wrong. He jumps from one side of the market to the

other with the greatest celerity when occasion demands it, but in the

main he seems most at home on the bear side. In bear operations he has

met with some reverses, while in this direction he has also made

millions. He seems to place great faith in Benner’s book of “Financial

Prophecies.” At times he operates on a very large scale, and he has been

known to cover fifty thousand shares of stock in a single day. He is

tall, well built, and has strong features, with keen, gray eyes. In

manners he is very democratic and candid, and occasionally somewhat

bluff; but he is a man of generous impulses, very charitable, and has

plenty of friends, both for his financial acumen and for his qualities

as a man who never deserts his friends, and who has not a few of the

characteristics of mediæval chivalry joined to the shrewd practicality

of a great stock operator of this practical epoch.

[Illustration:

_Very Respectfully

Addison Cammack_

]

RUSSELL SAGE.

Russell Sage is one of the best known of Wall Street celebrities. He was

born seventy years ago in Oneida county, of this State. As a boy, he was

employed in a country general store, beginning life in this fashion at

14. His business aptitude early manifested itself, and at 20 he bought

out his employer in Troy, to which he had in the meantime removed. He

became later on a member of the Troy Board of Aldermen, served seven

years, and was then elected Treasurer. Still later he was elected to

Congress, serving from 1853 to 1857. He started the project of

purchasing Mount Vernon and making it a national domain, and took great

pride in the success which attended his efforts in this direction. While

in Congress he became connected with the Pacific Mail Steamship Company,

and later Vice-President of the Chicago, Milwaukee & St. Paul, also for

a time its acting president. He is now a director in the Gould telegraph

and railroad systems, is interested in a number of trust companies and

is also said to own a large amount of stock in the Importers’ and

Traders’ Bank. He is the king of puts and calls. He has usually been

successful in writing privileges, but in the summer of 1884, when the

market broke so badly as to produce a panic, Mr. Sage met with a decided

reverse. He had sold a large number of puts, and the loss was several

million dollars. He is known as, in one sense, the largest capitalist of

Wall Street, inasmuch as he keeps the largest cash balance. It runs far

up in the millions, giving him quick resources with which to carry out

any project that may seem desirable. He is quiet and simple in his

habits, making no display. He lives on Fifth Avenue, and also has a

place at Babylon, Long Island. He is worth about twenty millions. He is

tall, light complexioned, with keen, gray eyes, and in Wall Street might

be taken for a country gentleman seeing the sights.

CHAUNCEY M. DEPEW.

Chauncey M. Depew owes his rise to native abilities and the friendship

of the Vanderbilt family, which he has thoroughly merited. He made the

acquaintance of Wm. H. Vanderbilt about the year 1866 and became the

attorney of the New York and Harlem Railroad. On the union of the New

York Central and Harlem roads, in 1869, he was appointed attorney of the

consolidated company, and in 1875 he was made general counsel. A few

years previous he had been elected director of the New York Central

road, and subsequently became a director in the Chicago and

Northwestern, Michigan Central, St. Paul and Omaha, the Lake Shore and

the Nickel Plate. In 1882 he was elected second vice-president of the

New York Central, and in 1885 succeeded Mr. Rutter as president of that

great railroad. He was born in Peekskill in 1834, and comes of an old

French Huguenot family. He still owns the homestead purchased two

hundred years ago by his ancestors. His mother is a descendant of the

brother of Roger Sherman, of revolutionary fame. Mr. Depew was graduated

from Yale College in 1856, and three years later was admitted to the

bar. In 1862 he was elected to the New York Assembly and acted as

Chairman of the Committee of Ways and Means and part of the time as

Speaker. In 1863, the year after Governor Seymour’s election, Mr. Depew

was a candidate for Secretary of State on the Republican ticket,

overcame the Democratic ascendancy, and was elected by about thirty

thousand votes. He declined re-election and was appointed Minister to

Japan by Secretary Seward. He held the post several years, and resigned

it to resume business. His commission as Collector of the Port of New

York was once made out by President Johnson, but in consequence of

Senator E. D. Morgan’s refusal to sustain Mr. Johnson’s veto of the

Civil Rights bill the President never sent the nomination to the Senate,

but tore it up in a rage. In 1872 Mr. Depew was a candidate for

Lieutenant-Governor of New York on the Liberal-Republican ticket, and

was defeated. Two years later the Legislature elected him Regent of the

State University. He served one year as one of the Commissioners to

build the new Capitol at Albany. In the memorable contest for the United

States Senatorship in 1881, Mr. Depew for eighty-two days received the

votes of three-fourths of the Republican members, retiring then to

ensure the election of Warner Miller. Mr. Depew is President of the

Union League and a member of many other clubs and societies, and is very

popular wherever he is known. He is one of the wittiest and readiest

after-dinner speakers in this country, and when occasion requires, rises

to the height of a born orator. His tastes seem to be those of a

statesman and a scholar rather than those of a financier in the ordinary

acceptation of the term, but his conservative and able administration of

his office as President of one of the greatest trunk lines in this

country, reveals a thorough apprehension of railroad problems and a

natural capacity for whatever duties may be imposed upon him. His great

versatility is exemplified by the fact that he has succeeded in law,

politics and railroad management.

[Illustration:

_Russell Sage_

]

JAMES M. BROWN.

James M. Brown, the banker, was born in New York city, and is about 65

years of age. He is ex-President of the Chamber of Commerce, and is held

in general esteem and respect. The house of Brown Bros. & Co., in which

he is now the senior member, has an interesting history. Early in the

present century Alexander Brown came from Belfast, Ireland, to this

country, and settled in Baltimore, where he engaged in the dry goods

business under the firm name of Alexander Brown & Sons. Subsequently the

firm comprised five sons of Alexander Brown. The business of the dry

goods firm prospered, and branch houses were established in

Philadelphia, New York and Liverpool, a son going to each of these

cities to represent the parent house in Baltimore. In New York and

Philadelphia the style of the firm was Brown Brothers & Co., as the

father had died in the meantime. In Liverpool they associated with them

Mr. Shipley, and the firm there was Brown, Shipley & Co. Another house

was established in London later on under the same title as the Liverpool

firm. All the houses were still engaged in the dry goods trade. Here in

New York, in which we are more particularly interested, the firm made

advances on cotton, and received linens from abroad, and also orders to

buy cotton for Liverpool. Gradually the house began to make larger

advances to planters and others engaged in the cotton trade, and finally

the banking business became so large as to swallow up the dry goods

trade and the house thereupon dropped merchandise and became bankers.

Later on a branch house was established in Boston, and at times it has

had branch houses in New Orleans, Mobile, Galveston, Savannah and

Charleston conducted under the name of the parent firm. At present it

has houses in London, Liverpool, New York, Philadelphia, Boston,

Baltimore and New Orleans. All of the original Brown brothers are dead.

James M. Brown is a near relative of James Brown, whose picture appears,

and who was the original head of the house in New York. James M. Brown

did not enter the house in his youth. He was for years the senior member

of the dry goods house of Brown, Seaver & Dunbar. On the dissolution of

this firm James M. Brown became a partner in the house of which, by

reason of his years and large experience, he may be considered the head.

The other partners here are Howard Potter, John Crosby Brown, Charles D.

Dickey, Waldron Post Brown, a son of James M. Brown, and W. F. Halsey.

The New York partners are interested in the branch houses in this

country and abroad. James M. Brown was a member of the famous Committee

of Seventy which contributed to the downfall of the Tweed Ring in this

city. He is of the medium height and florid complexion, well preserved,

genial in manners, and is a man of high character.

[Illustration:

_Yours Very Truly.

Chauncey M. Depew._

]

STEDMAN, THE POET AND FINANCIER.

A small, slightly built gentleman with iron gray side whiskers, a

refined face and expressive gray eyes, is one of the notable figures in

Wall Street. It is Edmund Clarence Stedman, the banker poet. He was born

in a small town in Connecticut in 1833, studied at Yale, entered

journalism in 1852, came to New York in 1855, and soon began to

contribute poems to the _New York Tribune_. He became a war

correspondent for the _World_ on the outbreak of the rebellion, and

continued in this capacity till 1863. In that year he became private

secretary to Attorney-General Bates at Washington. Meantime he studied

law, and contributed to the _Atlantic Monthly_ and other leading

magazines. As a poet, he holds high rank; as a writer of polished,

graceful prose he has few equals; as a thorough gentleman and a

scrupulous man of business he is held in the highest respect. Through

the imprudence of another he has within a few years met with some

financial reverses, which he met courageously and honorably, and he is

now well on his way towards his former position of financial ease.

Although a poet, he understands Wall Street business thoroughly, and is

considered a keen judge of financial opportunities.

Victor H. Newcombe was born in Louisville, Kentucky, about 48 years ago.

His father was President of the Louisville & Nashville Railroad, and the

son succeeded the father in that position. The elder Newcombe was a

financial power in Kentucky. He was sagacious and far-seeing. In every

respect, he was an excellent business man. Victor Newcombe has fallen

heir to his father’s laurels and is a successful operator in Wall

Street. He has achieved signal success in most of the campaigns in which

he has engaged, whether on the bull or the bear side of the market. He

is cautious, and turns quickly when he thinks there is occasion. He

seems to act on the French saying, that “only a fool never changes his

mind.” He lives in fine style on Fifth avenue, and also has a beautiful

residence at Elberon. He is one of a number of prominent gentlemen from

the South who have enrolled themselves among the citizens and taxpayers

of New York. He is an ex-director in the New York & New England road,

and a prominent member of the Union and Tuxedo Park Clubs.

MOSES TAYLOR.

Moses Taylor, now deceased, was one of the notable figures in Wall

Street life for many years. He started as a South street merchant, after

having been a clerk with G. G. & S. Howland. Wm. H. Aspinwall was also a

clerk with that house at the same time. When Mr. Taylor gave up his

situation to embark in business for himself, Mr. Aspinwall was admitted

into the Howland firm as a junior partner. Moses Taylor was a man

governed largely by intuition. There was little argument; with him, so

to speak, it was a word and a blow. Having formed his impression and

taken his quick resolution, there was no length to which he would not go

in the transaction, either in buying or selling or advancing money. He

was President of the City Bank and owned a large amount of its stock.

Under his administration the bank was wonderfully successful. His

son-in-law Percy R. Pyne, is now its President. Moses Taylor was a

valuable aid to the Union cause during the war. He was a close friend of

Secretary Chase, and whenever the Government needed the assistance of

the banks, the Secretary’s influence with the great merchant speedily

brought about the desired result. Moses Taylor realized the fact that

the support of the Government by the entire banking system was an

imperative necessity. The presidents of the banks would be called

together on one of these appeals from the Secretary of the Treasury, and

whatever action Mr. Taylor favored would be adopted, so strong was his

influence, and so high his standing as a merchant and financier. He

accumulated wealth very fast in connection with the sugar branch of his

business. Most of the large sugar planters consigned their product to

his firm, and they were also governed by his superior judgment in

investing their money, so that he always had important connections with

Wall Street, a fact that entitles him to a place in this book. While

investing millions for Cuban capitalists, he also invested very largely

for himself. Moses Taylor was the first to discover the value of the

Delaware, Lackawanna & Western Coal property, and while the stock was

kicked about Wall Street, because the company was bankrupt, he picked it

up at a few cents on the dollar, and made millions of dollars from this

investment alone. At his death he was one of the largest owners of the

stock, as his faith in it was so strong that he had refused to sell it,

even though the price had risen above 140. He died worth at least forty

millions of dollars. He had no social aspirations, and no interest in

anything but business. It was his idol. Few men have been harder workers

from early in life up to their last days. He never felt that he could

spare time for recreation, and was seldom known during his long business

career to leave the city over night, summer or winter, except on

business. Moses Taylor had for partners in his business his son-in-law

Percy R. Pyne and Lawrence Turnure, both excellent business men, and Mr.

Taylor owed much of his success to the selection of these gentlemen to

aid in the management of his affairs. Mr. Taylor placed in the hands of

these two gentlemen, especially during the last ten years of his life,

the laboring oar of his vast business, and the successful results are

the evidence of their sagacity and marvellous ability.

[Illustration:

_James Brown_

]

ANTHONY W. MORSE.

Anthony W. Morse was once one of the remarkable men of Wall Street. He

made $150,000 in speculation, bought a yacht and went to Europe during

the war. While in England, he mingled with the aristocracy, and became

strongly imbued with the idea that the North would not be successful in

the war, and that the National currency would become almost valueless.

He thought that the more the National currency depreciated, the more

railroad stocks and bonds would advance; in short, that whatever the

currency would buy would advance, while the currency itself would become

nearly worthless. He therefore became a rampant bull on stocks. He

bought almost the whole list, and also did a large business in buying

for others whom he succeeded in impressing with his own ideas. He had

many followers and made a tremendous inflation. Secretary of the

Treasury Chase was advised of this Morse speculation, which might prove

prejudicial to the National credit, and he announced that if the

inflation was carried any further, he would prick the bubble by selling

gold. Anthony W. Morse thereupon personally sent Secretary Chase a

dispatch saying that he would take all the gold that the United States

Government had to sell. Mr. Chase immediately ordered Assistant

Treasurer John J. Cisco to sell $10,000,000 of gold to the highest

bidders. The usual notice appeared in the morning newspapers, and a

panic at once followed. At 12 o’clock, or two hours after the opening of

the Exchange, it was announced from the rostrum that Anthony W. Morse

had failed. This terminated the career of Mr. Morse as a large operator

and manipulator, and with his downfall the death knell was sounded to

his imported theories. He straggled manfully for several years to regain

his footing, but his prestige was gone, and he failed in every effort to

push his way again to the front. His ill-success soured him. His health

failed, and he went to Havana to recuperate. There he died with

profanity on his lips, enraged at the failure of all his hopes. He paid

the penalty of disloyalty. His friends of the English nobility were

largely to blame for all his misfortunes. Their predictions of the

success of the South led him on to irretrievable ruin. He did not see

that their wish was father to the thought.

[Illustration:

_Edmund Clarence Stedman_

]

FORMER GIANTS OF THE STREET.

Henry Keep, once President of the Lake Shore road, and also of the New

York Central, was in his day a power in Wall Street. He was the first to

discover the intrinsic value of railroad property in the Northwest, and

manipulated Chicago & Northwestern stock, both common and preferred,

very successfully, making a great deal of money for himself and friends.

He died very wealthy. He came to New York city from Watertown, in the

interior of New York, and at first was an exchange broker, dealing

mainly in uncurrent money. He had previously served in some humble

position on a railroad. By careful and economical habits he was able to

leave a fortune of several million dollars, largely in common and

preferred Northwestern stock. The plot of ground on which William H.

Vanderbilt built his palatial Fifth Avenue home was once the property of

Mr. Keep, who originally bought it for about $250,000 for the purpose of

building a charitable institution, but changed his mind when the

property quadrupled in value. Then he concluded that charity should

begin at home. He sold the plot, extending for one block along Fifth

Avenue, to Mr. Vanderbilt for one million dollars. Still his original

intentions were good, and it was only after the real estate market, as

with Satanic malice, had in that locality advanced 400 per cent. and

taken him up into a high mountain of temptation, that his

philanthropical project turned awry and lost the name of action. While

Mr. Keep made a signally good President of the Lake Shore road and was a

great manipulator of stocks, he was a failure as President of the New

York Central, and he resigned that post having no confidence in the

future of the property. Commodore Vanderbilt, who believed in the

property, became his successor, and in a previous chapter I have given

the story of the rise of that remarkable man. It is of interest to

recall, by the way, that while President of the Lake Shore road Mr. Keep

went largely short of the stock. As the President he naturally had

inside information. Addison Jerome, a brother of Leonard Jerome, was a

big operator of the day, and undertook to corner President Keep. In

those days a great deal of stock was sold on seller’s option for thirty

and sixty days. Mr. Keep had sold largely in this way, and Addison

Jerome and his clique had bought heavily, expecting that the corner

would be complete when the options should mature. A surprise awaited

them. Mr. Keep made deliveries promptly in brand new shares. They were

really an over-issue by the Company. It was a Waterloo in a double sense

for Jerome and his fellow bulls. They were in over their heads. It had

such a dampening effect that they immediately threw up the sponge and

the stock came down with a crash. The issue of this new stock was

smoothed over by turning the avails into the treasury of the Company, a

fact, however, which did not prevent Mr. Keep from making a pretty good

turn on his shorts.

J. PIERPONT MORGAN.