- Historic Sites
As Old As The Pyramid Scheme
It went to Russia along with capitalism, but its greatest players worked over here
November 1994 | Volume 45, Issue 7
Finally, with winter coming on, he announced his departure for New York to arrange to have the funds needed to buy the land transferred from Britain. After withdrawing the $40,000, which had remained largely untouched, he left Minneapolis armed with a letter of introduction from the Northern Pacific’s land commissioner to Horace Greeley, soon to be nominated for President.
Greeley, who was both highly intelligent and a notoriously poor judge of character, took to Gordon-Gordon at once. They began lunching together frequently, discussing the affairs of the day, including the looming battle for control of the Erie Railroad. Gordon-Gordon let Greeley know that he was a major stockholder and in fact held enough to control the next election of the board of directors.
Greeley was anxious for reformers to take over the Erie. But perhaps led on by Gordon-Gordon, he decided that Gould need not be ousted as president, as long as there was a strong board to keep him in check. He arranged for Gordon-Gordon to meet with Gould.
Gould was probably operating on the principle of any port in a storm. He agreed to Gordon-Gordon’s demands for reform and, as a vouchsafement of his behavior, gave him numerous securities, $200,000 in cash, and his resignation as railroad president to be held in escrow.
To be fair to Jay Gould, he became embroiled with Lord Gordon-Gordon not through greed but through desperation.
Gordon-Gordon now had a fortune in his grasp, and he moved to turn it into negotiable form. He went to Philadelphia and began selling the securities, including five thousand shares of the Oil Creek and Allegheny Railroad. The sale of so large a block of stock of so small a railroad depressed the price, and Gould immediately made inquiries to find out where the stock had come from. He soon learned that no one with that much stock had sold any and realized that only Gordon-Gordon could have done it.
Gould understood immediately that he had been had. He warned brokers and then asked Greeley to instruct Gordon-Gordon to return the cash and securities or face arrest. The latter reluctantly returned the securities, doubtless knowing he would now have great trouble selling them anyway, but kept $150,000 of the cash. Gould had him arrested.
Gordon-Gordon tried to bluff it out, hoping apparently that his peer-of-the-realm act would dazzle the judge sufficiently to earn him an acquittal. But Gould had two of the best lawyers in the country, David Dudley Field, who had written much of the New York Codes of Civil and Criminal Procedure, and the young Elihu Root.
Gould’s lawyers pressed Gordon-Gordon about his relatives and associates, and he gave them dozens of distinguished names, all with an air of injured innocence so convincing that the judge at one point ordered Field to stop badgering the witness. Gould immediately cabled the people in Scotland that Gordon-Gordon had named and quickly received replies that they had never heard of him. But Gordon-Gordon, again displaying the sense of timing that is the hallmark of a great con man, had guessed that Gould would do exactly that. He took the night train to Montreal.
The rest of Gordon-Gordon’s short career was all downhill, however. The following year he turned up in what is now Winnipeg and again dazzled the locals. But the people he had duped in Minnesota got wind of his presence there and decided to kidnap him. They nearly succeeded, before being caught by Royal Canadian Mounted Police. All this naturally caused considerable publicity and diplomatic activity.
Publicity is fatal to people like Gordon-Gordon. The jewelers he had defrauded in Edinburgh heard about him, put two and two together, and dispatched an agent to Winnipeg to see if Lord Gordon-Gordon was Lord Glencairn. Gordon-Gordon agreed to return to Britain and face the charges but that night put a bullet through his head instead.
Gould’s and the jeweler’s money was never found.