Mephistopheles Of Wall Street

PrintPrintEmailEmail

One day in the 1880s Arthur T. Hadley, the distinguished American economist who would later be president of Yale University, was visiting his lawyer’s office on Broad Street near the New York Stock Exchange. “Well, what do you think of that?” said Hadley, looking out the window at the busy scene below. “There’s Jay Gould standing across the street, and for once he has his hands in his own pockets.”

Poor Jay Gould. During his life he suffered from a terrible public image. Professor Hadley, an astute and not unkindly man, was merely reflecting the prevailing opinion of the day. Newspapers routinely referred to Gould as the “Mephistopheles of Wall Street.” Cartoonists depicted him as a pirate, a Shylock, a hangman, and worse. Joseph Pulitzer, who knew Gould personally and pursued wealth quite as vigorously, described him as “one of the most sinister figures that has ever flitted bat-like across the vision of the American people.”

This reputation was, in fact, mostly false and largely the creation of his enemies and the press. To be sure, Gould’s standards of business conduct were no better than those of many of his contemporaries, but they were no worse either. There is a deep irony here, for Gould early understood the power of the mass media to affect public opinion. He developed sophisticated ways to manipulate it at least fifteen years before the term press agent even entered the language. In fact, Gould was probably the first company president to hire a public relations man to improve a corporate image.

In 1868 Gould became president of the Erie Railroad and a year later he precipitated a great Wall Street panic when he very nearly cornered gold. In the wake of the gold panic, his partner in Erie affairs, Jim Fisk, Jr., granted an interview to a reporter for the New York Herald , one George Crouch. Fisk apparently hoped to get a little space in New York’s leading newspaper for the Erie leadership’s point of view. But the interview, as printed, was a disaster for the Erie duo, with Crouch cheerfully referring to them as “the great gorilla of Wall Street, the gold-gobbling Gould; [and] the amphibious what-is-it? or ‘ring’-tailed financial orangutan otherwise known to naturalists and the world at large as the ‘irrepressible Jim Fisk, Junior.’”

Feeding a reporter stories and hoping that he and his editors would swallow them obviously did not work well. But Gould soon had a better idea: he simply hired George Crouch and made him the Erie’s PR man. Crouch appears not to have quit the Herald immediately or even to have told the publisher of his new association. Rather he used his position at the Herald to plant stories favorable to the Erie. (Clearly Wall Streeters weren’t the only ones whose professional ethics needed improvement in the 1860s.)

Crouch began to pour out articles singing the praises of the Erie Railroad. In one he unblushingly wrote that Fisk and Gould “will deserve a bronze memorial apiece—one at New York and the other at San Francisco, where the western terminus of the Erie is destined to be located at no distant date.”

Not everyone was impressed. Horace Greeley, his pen dripping sarcasm, wrote in the New York Tribune that “Alaska has a tropical climate, and strawberries in their season. The Borgia was a saintly, much slandered martyr of a woman. The Devil is white. Mr. Jay Gould shows how admirable, successful and economical is his management of the Erie Railroad.” Many of the country’s editors, however, were not as critical as Greeley, and the Erie’s treatment in the press and its public image slowly improved. To be sure, it could hardly have been lower when Crouch went to work for Jay Gould.

When the great fire struck Chicago in October 1871, Gould saw a golden opportunity. He printed notices that relief supplies would be transported to Chicago on the Erie Railroad without charge. Jim Fisk drove around New York collecting bundles. A special train was prepared and the tracks cleared all along the Erie line. Aboard was George Crouch.

As the train roared up the line, Crouch telegraphed the train’s latest position and running times from every stop. From Elmira, New York, he reported that “dense crowds were collected at Binghamton, Owego and Waverly. … Handkerchiefs waving God speed were seen from every cottage and shanty. Contributions were waiting at every station.” These bulletins, printed in hundreds of newspapers, were also posted at Erie headquarters and ticket offices. Crowds gathered to read them and cheer on the Erie train that had captured the imagination of the entire country. The Erie’s Chicago relief train was a public relations triumph, although, as it happened, it came too late to save Gould’s fast-deteriorating position in the company.

While Gould actively manipulated the images of his companies, some quirk of his personality prevented him from making any attempt to change his own image. His happy family life was largely unreported. His quiet charities were usually exactly that. His basic human decency went mostly unnoted in the newspapers that so cheerfully detailed his latest financial coups and the latest scurrilous gossip about him. Accused of nearly every crime that was in his capacity to commit—and quite a few that were not—Gould never tried to correct the record or improve his own malignant public image. He seems genuinely not to have cared what others thought of him.

When Gould first came to Wall Street, in the early 1860s, there was little law limiting the actions of speculators or business managers, and a dog-eat-dog financial market was flourishing there as never before. But Gould did not create these conditions; rather he exploited them with a genius that none of his contemporaries could match. In the ruthless, every-man-for-himself world of mid-nineteenth-century Wall Street, Jay Gould was as ruthless as necessary and far more creative than most. Moreover, his genius was seldom revealed in his conversation. Gould had early learned the advantages that listening has over talking, and he was always notably quiet, an unnerving trait. His intellect nonetheless leaked out through his extraordinary dark eyes. “While you speak,” wrote Harper’s Monthly , when Gould was still only in his early thirties, “he listens, and looks at you with eyes which freeze and fascinate.” To put it bluntly, Gould was scary.

It hardly helped Gould’s public image that so capable a mind and so intense and introspective a personality was contained within a body of almost pathetic inadequacy. Gould stood only five feet two inches tall and he struggled most of his life with sickness and poor digestion. Tuberculosis was to kill him when he was only fifty-six. “He was almost the thinnest man I ever met,” remembered the journalist William A. Croffut in his memoirs. “I saw him take the plunge in the Turkish bath at Saratoga. His arms were small, his chest was hollow, his face was tawny and sallow, and his legs! Well, I never before saw such a prominent ‘bull’ that had such insignificant calves. Perhaps—perhaps you could not put a napkin ring over his foot and push it up to his knees; I am not certain.”

Gould could have made himself respected with a good PR campaign. He chose silence instead, and his reputation has never recovered.

Gould’s immense financial success was certainly resented by the many who lost money because of him in the great game of Wall Street, while his shyness and puny body were unlikely to make him popular with people outside the bosom of his family. But it was well within Gould’s capability to make himself respected, perhaps even admired, with a good PR campaign and a few splashy charitable donations. John D. Rockefeller accomplished exactly that for himself a generation later. Gould chose silence instead and let his reputation be what his enemies might make of it. It has not recovered in a hundred years.

I once found a clipping from the back pages of some newspaper pasted into a copy of Gould’s History of Delaware County . (Written when he was only nineteen, Gould’s 426-page book is still the definitive work on the early history of the western Catskill region where he was born.) There was no indication what newspaper the clipping might have been from, only a penciled notation that seemed to indicate it was printed in 1909, seventeen years after Gould’s death.

The article told of an incident when Gould was traveling out West. His train had stopped briefly to take on water and coal at a depot and Gould got out to stretch his legs. Noticing a crowd standing outside a church on a nearby hill, he wandered up to investigate, for it wasn’t a Sunday. He discovered that the mortgage holder was foreclosing on the church and that an auction was being held to dispose of the property. When Gould learned that the mortgagee would settle for fifteen hundred dollars (well over twenty thousand dollars in today’s money), he took a roll of bills out of his pocket and bought the lien.

“Stranger,” someone asked Gould, “what are you going to do with the claim you’ve just bought?” Gould wanted to know who was asking, and the man replied, “Why, I am a steward of this church. The members and Sabbath school scholars are in the church, with the presiding elder and pastor, on their knees, praying God to come to our help and save the church.”

“Mr. Gould,” the clipping continues, “said nothing, but, taking the receipted bill and cancelled lien, he gave them to the steward, and turning toward the depot walked rapidly back to his train. The steward entered the church, now free, and told his people what the Lord had done, and they sang the doxology on their knees. Then they went out into the streets to find the stranger. They soon found that the little man was none other than Jay Gould. His train had gone, and only a cloud of dust on the far-away prairie indicated where their benefactor was.”

While unverifiable, for me the story has the ring of truth about it. So even if the Mephistopheles of Wall Street would do nothing to improve his public image, I see no reason why I should not do a little something for it.