The Legend of Jay Gould

He was the quintessential nineteenth century Robber Baron. One writer called him “The Mephistopheles of Wall Street.” A newspaper editor branded him “one of the most sinister figures that have ever flitted bat-like across the vision of the American people.” He even proclaimed himself “The Most Hated Man in America.” And even though his notoriety stemmed largely from his manipulations of America’s financial markets, the legend of Jay Gould actually began in the wilderness of northeastern Pennsylvania.

In few individuals’ careers has legend so readily mingled with fact. Jay Gould’s infamy was well-enough deserved; he was ambitious, aggressive, avaricious. But neither was he cupidity incarnate, his life a succession of cold-blooded financial chica­neries. Nowhere is this melding of fact and legend, of guilt and innocence, better illustrated than in Gould’s four-year sojourn in Pennsylvania, a period marked by suicide, charges of embezzle­ment, and the Battle of Gouldsboro.

The earliest American forebears of the Gould line emigrated from England to Connecticut in 1647. Jay Gould’s ancestors in­cluded shipping merchants, public officials, and a Revolutionary War hero, Col. Abraham Gold. (The family changed the spelling of its surname to Gould in the late eighteenth century.) Colonel Gold, Jay Gould’s great-grandfather, married Elizabeth Burr in 1754, and the Gould family tree, ironically, intersects with that of Aaron Burr, another whose reputation has been tainted.

Jason Gould, later known as Jay, was born on May 27, 1836, in Roxbury, New York, the sixth child of John and Mary More Gould. The Goulds were farmers and, as the only son, he was expected to contribute to the farm’s operation. However, the young Gould preferred reading and studying to farming; often he would gather his books and hide when his father needed help. Not infrequently he would rise at three o’clock in the morning to read by candlelight.

Today, psychiatrists might make much of Jay Gould’s early years. His mother died when he was four years old. His father remarried twice, and both women died within two years of marriage. Not long afterwards, one of his sisters died suddenly. Within four years he watched four members of his family die. The family misfortunes forced Jay Gould to grow up early, and to accept responsibilities far beyond his years. As a boy he im­pressed others as one who looked ten years younger but acted ten years older than he was. He was serious, polite, and self­-reliant.

In April 1852, not yet sixteen years old, Jay left his Roxbury home to embark on a career as a surveyor, employing skills en­tirely self-taught. He quickly showed such aptitude for the job that he took over the business, and he spent several years lead­ing surveying projects in Ulster, Albany, and Delaware counties in New York. He also found time to write a 426-page history of Delaware County, New York, a remarkable achievement for someone not yet twenty years old. A fire at a Philadelphia print shop destroyed the manuscript but within a month Gould had rewritten the book from notes and memory.

It was on one of his surveying expeditions in 1856 that Gould met Zadock Pratt, one of New York’s wealthiest and most re­spected citizens. Pratt owed his financial success to his tanning operation, the largest in the country in the 1850s. Tanning, the process of making leather from hides, was an important industry in New York and Pennsylvania in the nineteenth century. Zadock Pratt was so beloved by his employees that they renamed their village Prattsville. After making his fortune in tanning, Pratt entered politics and was elected twice to Congress. However, for all his respectability, Pratt was rather eccentric: be had images depicting the story of his life carved in rock formations near Prattsville, several of which survive to this day along route 23.

Zadock Pratt was impressed by Jay Gould’s abilities and ambi­tion, and in August 1856 the elderly politician and the young surveyor established a partnership. They agreed to build a tan­nery in the virgin forests of northeastern Pennsylvania, between the Lehigh and Delaware rivers, an area newly opened by the Delaware and Lackawanna Railroad. The abundant supply of hemlock bark was ideal for tanning. Pratt pledged up to one hundred and twenty thousand dollars in capital; Gould, who knew absolutely nothing about the tanning process and industry in general, assumed charge of the operation.

Inexperience was not Gould’s only handicap. Small and boyish-looking, with a soft voice, he attempted to boss gangs of older, tougher workmen who could physically intimidate him. To make himself look older, he grew a full beard that covered his mouth and hid his facial expressions, giving the impression of total sternness.

In September Gould selected the site of the tannery, a location he described as “fifteen miles from any place,” but actually mid­way between Scranton, Lackawanna County, and Stroudsburg, Monroe County. Jay Gould himself felled the first tree and di­rected workers in erecting the tanning facilities. The workmen christened the remote settlement Gouldsboro, an honor be­stowed on few men of such tender years. Jay Gould was ex­tremely careful to ensure that his partner – who after all, financed the venture – duly received his share of the credit. Upon completion of the tannery workshops, “Three cheers were then proposed for the ‘Hon. Zadock Pratt the world renouned Great American Tanner,'” he wrote Pratt, “and a more hearty response I am certain this valley never before witnessed!”

The initial good feelings of the partnership soon faded. As soon as he had the tannery operating, Gould devoted less than full attention to the business, preferring to speculate in other ventures. And it is here that the facts of Gould’s career begin to become enshrouded by legend.

Jay Gould began purchasing land for its speculative value, as well as for its stands of hemlock trees. Although he used Pratt and Gould company funds for these ventures, he failed to con­sult his partner before acting. “I was out to Wilkes Barre yester­day to attend to some business & I accidently fell in with a bargain in the way of land,” he casually informed Pratt at one point. Historians also contend that Gould established a private bank in Stroudsburg without Pratt’s knowledge, and used partnership funds for personal investments in New York City. Gould’s personal speculations made with company finances signaled fraud by embezzlement. So began the legend of Jay Gould with the story of the young upstart swindling the gullible old man who had taken him as a protege.

According to legend, Zadock Pratt – growing suspicious be­cause the firm was selling many hides but Gould was reporting no profits – paid a surprise visit to Gouldsboro. He discovered that Gould was keeping the books in a highly original manner and that his young partner was unable to provide satisfactory answers to his questions. Saddened and embittered, Pratt de­manded the dissolution of their partnership. Little evidence suggests that Gould actually did anything illegal. Indeed, it is unlikely that the youthful, inexperienced Gould could take ad­vantage of the veteran, sharp-eyed tanner. The accusations seem simply to have been handed down from one generation to the next.

Although there is little documentation that Gould acted im­properly, the tannery suffered financial difficulty, as the Panic of 1857 slowed leather sales. Pratt, obviously disenchanted with Gould, berated him for his handling of tannery operations, sug­gested changes in bookkeeping methods, and demanded that the firm withdraw its funds from the Stroudsburg bank. Gould complied with Pratt’s demands, but it was not enough to salvage the partnership. Early in 1859, Pratt demanded that Gould either sell him his share for ten thousand dollars – or buy Pratt’s share for sixty thousand dollars. He gave Gould ten days to decide. Zadock Pratt apparently believed that Jay Gould would be un­able to raise the purchase price, and he was prepared to take control of the tannery himself. He must have been surprised when Gould returned with sixty thousand dollars.

Gould had entered into an agreement with Charles M. Leupp, partner in the prominent New York City leather firm of Leupp and Company, to finance Gould’s purchase of the tan­nery. And so Jay Gould and Zadock Pratt parted company.

Zadock Pratt never once mentioned Jay Gould or the tannery in his lengthy autobiography, and bitterness lingered in the Pratt family long after its patriarch’s death. Julia Ingersoll, Pratt’s daughter, penned a telling entry in her journal in 1892. “Jay Gould will have been dead a week tomorrow. What is he to me, not my brother …. He leaves 75 millions, he still owes my father a few thousands.” During his lifetime, Gould himself recounted only that, “We carried on the business for a while, and I bought Mr. Pratt out …. ”

In Charles M. Leupp, Gould had gained as partner one of the most respected and successful individuals in New York’s leather business. Leupp’s mansion on Madison Avenue was one of New York City’s showpieces. In forming the partnership, Gould once again showed an amazing ability to win the trust and confidence of a man far more mature, experienced, and prominent than he. Leupp – and Zadock Pratt before him – was impressed by Gould’s polite, respectful manner, his fierce determination, in­tense concentration, and seemingly insatiable appetite for hard work.

The ever crafty Gould once remarked that it was just as easy to obtain the acquaintance and secure the friendship of the most powerful as of the most insignificant, if one went about it cor­rectly. Gould evidently knew the proper way. Once finalized, however, the partnership of Gould and Leupp proved difficult. The partners quarreled about who was actually in charge. They disagreed about the number of hides to produce. Once again accusations surfaced that Gould was diverting company funds for his own private speculations in other tanneries, land, and hides.

Charles M. Leupp’s suicide only made matters worse.

Leupp’s suicide is the cornerstone of the early legend of Jay Gould. According to legend, Gould’s speculations frightened the conservative Leupp while his possible embezzlements angered him. Leupp rushed to Gouldsboro – as had, as legend claims, Zadock Pratt – and demanded that Jay Gould account for all company money. In a stormy confrontation Leupp accused an uncontrite Gould of swindling the partnership. Feeling betrayed by Gould, and despondent about other business reversals, Leupp returned to his Madison Avenue mansion and shot himself.

The facts are less dramatic. Leupp did, indeed, commit sui­cide in October 1859, but his act was the culmination of a lengthy period of depression, not the climax of the alleged confrontation with Gould. In fact, historians contend there was no such con­frontation; furthermore, the two men may well never have met, conducting all their business through Leupp’s brother-in-law and partner, David Lee. Certainly none ofLeupp’s family or friends ever suggested that Jay Gould was in any way responsi­ble for the suicide. Lee even admitted, “That Charles was un­sound in mind I have seen for a good while – that he was positively insane I have seen for some time ….”

Negotiations between Gould and Leupp’s estate, represented by David Lee, did not go smoothly. Lee sold his and Leupp’s share of the tannery to Gould for sixty thousand dollars, payable over six years with interest. Gould omitted mention of interest payments in his final draft of the agreement, an omission which David Lee regarded as a breach of faith. The two also squabbled about the disposition of hides already at the Gouldsboro tannery. Fearing that Gould was about to cheat him, Lee decided to strike first. In February 1860, Lee invited Gould to his New York office for further negotiations. While Gould patiently awaited his host, David Lee secretly hurried to Gouldsboro and assembled the tannery employees. Denouncing Gould, Lee declared himself the rightful owner of the tannery. The employees responded unceremoniously by physically tossing Lee out the door. Only a dozen or so tanners sided with him.

Lee quickly dispatched an association to Scranton to recruit “armed constables.” Early on the morning of Tuesday, March 6, ten men from Scranton arrived, with the promise that additional supporters were on the way. Lee ordered his men to barricade the tannery operation and deployed them inside the building. Gould discovered Lee’s plot and he, too, rushed to Gouldsboro. More than two hundred employees and local residents gathered near the tannery office. Gould addressed the throng, asserting that he was the true owner of the tannery and wished only to preserve it, while his opponent intended to dismantle the opera­tion and dismiss the workmen. Stirred by Gould’s impassioned oratory – and, as legend contends, fueled by a bountiful supply of free wine and oysters – the crowd rallied to his cause. Suffi­ciently bolstered, Jay Gould called upon David Lee to surrender the tannery.

Lee refused.

Gould divided fifty men into two companies, ordered one to the rear of the tannery, and led the second to the front entrance. He was not armed and claimed to “never having owned, loaded, or fired a pistol in my life.” But the great-grandson of Revolution­ary War hero Abraham Gold was ready to enter into combat with the gentleman-merchant of New York City. Gould later recol­lected the incident.

I burst open the door and sprang in. I was immediately saluted with a shower of balls, forcing my men to retire, and I brought them up a second time and a third time and pressed them into the building, and by this time the company at the other end of the tannery had succeeded in effecting an entrance and the firing now became general on all sides and the bullets were whistling in every direction.

The whistling bullets took their toll mostly on the hides hang­ing from the ceiling beams. Just three men were wounded, and only one of them seriously. Nonetheless, the assault was enough to accomplish Gould’s purpose, as Lee’s men, barricaded inside the tannery, broke and ran. In their frenzied escape, several leapt out of second floor windows. The Battle of Gouldsboro bad lasted but ten minutes.

The rout complete, Gould and his men returned to the every­day business of making leather. Newspaper correspondents descended upon Gouldsboro and began elaborating the legend of Jay Gould. With headlines proclaiming “Civil War and the Leather Trade” and “Great Fight at Gouldsborough,” local news­papers heralded Gould’s victory over Lee. On Friday, March 16, 1860, the New York Herald apprised its readers of a “Tannery In­surrection in Pennsylvania.”

A former partner of Charles M. Leupp learned of the Battle of Gouldsboro and not only enhanced the Gould legend but stirred the controversy.

I was hardly prepared for its revelation. That Gould was capable of any act of meanness, of treachery I fully believed; but I hardly thought that he would resort to that desperate measure to gain his points & in this he has over reached himself…. For now, he stands in the Eye of the law, a criminal in act, as he was before in intention.

The struggle between Jay Gould and David Lee returned to the courtroom, where legal briefs replaced firearms, but the issues could not be resolved as quickly as the Battle of Goulds­boro itself. Each side brought a series of suits against the other, each claiming trespassing and illegal seizure of property. While the case was slogging its seven year way through the courts, both Gould and Lee decided to abandon the tannery. The tan­nery never regained its former prosperity and the wilderness settlement of Gouldsboro faded from prominence.

In December 1868 Jay Gould sold his interest in the tannery to Lee for the token sum of one dollar. Gould had, by then, aban­doned Pennsylvania and taken on New York City, where, as Matthew Josephson offered in his classic indictment, The Robber Barons, “No human instinct of justice or patriotism or pity caused him … to waver in any perceptible degree from the steadfast pur­suit of strategic power and liquid assets.”

In New York, Gould’s legend blossomed unchecked. With allies Jim Fisk and Daniel Drew, Gould battled Cornelius Vander­bilt for control of the Erie Railroad. To stave off Vanderbilt, Gould wildly issued increasing amounts of suspect paper stock, a move that was probably illegal and possibly facilitated by liberal brib­ery. Meanwhile, much like the ill-fated tannery at Gouldsboro, the physical condition of the Erie Railroad deteriorated.

Although Gould retained control of the railroad, he was forced to flee New York. The Erie War cemented Gould’s reputa­tion as an “operator,” blindly seeking personal financial gain heedless of the cost to others or to the economy as a whole. That reputation – and the legend of Jay Gould – grew with his involve­ment in the Gold Corner conspiracy. In 1869 Gould and Fisk, with the complicity of an aide to Pres. Ulysses S. Grant, schemed to corner the nation’s supply of gold. They drove the price of gold dramatically skyward, bringing legitimate com­merce to a standstill. When the U.S. Treasury finally crushed the scheme on “Black” Friday, September 24, the price of one hun­dred dollars in gold coin plummeted from $162 to $133 in just fifteen minutes. Mobs of angry bankrupt investors stormed through Wall Street, recalling an earlier piece of the Gould leg­end with their cries: “Who killed Leupp? Jay Gould!” The result­ing stock market panic triggered a severe economic depression that crippled the nation for several years.

Jay Gould’s stormy sojourn in Pennsylvania was brief – lasting only four years – but it brought about dramatic changes in his life. He departed the Commonwealth a much wealthier man than he had entered it. His tannery and speculations launched him on his way to amassing a fortune of nearly seventy-five million dollars. But perhaps more importantly, the legend of Jay Gould began in the deep forests of the Keystone State.

Following the rumored embezzlement of Zadock Pratt, Charles M. Leupp’s suicide, and the Battle of Gouldsboro, the name of Jay Gould became synonymous with ruthless avarice and cold greed. Whether he truly was at fault in these incidents seems not to have mattered to the nation; the characterization, once established and constantly enhanced, perpetuated his un­savory reputation.

In the wilds of northeastern Pennsylvania, Jay Gould sought his fortune, but he created a legend instead.

For Further Reading

Ackerman, Kenneth. The Gold Ring: Jim Fisk, Jay Gould and Black Friday, 1869. New York: Dodd, Mead, and Company, 1988.

Adams, Charles Francis, Jr., and Henry Adams. Chapters of Erie. New York: Henry Holt, 1886.

Brewer, Thomas B., ed. The Robber Barons: Saints or Sinners? New York: Holt, Rinehart and Winston, 1970.

Cashman, Sean Dennis. America in the Gilded Age. New York: New York University Press, 1988.

Ellsworth, Lucius. Craft to National Industry in the Nineteenth Century: A Case Study of the New York State Tanning Industry. New York: Arno Press, 1975.

Grodinsky, Julius. Jay Gould: His Business Career, 1867-1892. Phil­adelphia: University of Pennsylvania Press, 1957.

Hoyt, Edwin P. The Goulds: A Social History. New York: Weybright and Talley, 1969.

Jones, Peter d’Alroy. The Robber Barons Revisited. Boston: Heath, 1968.

Josephson, Matthew. The Robber Barons: The Great American Capitalists, 1861-1901. New York: Harcourt, Brace, 1934.

Klein, Maury. The Life and Legend of Jay Gould. Baltimore: Johns Hopkins University Press, 1986.

Minnigerode, Meade. Certain Rich Men. Freeport, N. Y: Books for Libraries Press, 1970.

O’Connor, Richard. Gould’s Millions. Garden City, N. Y: Doubleday and Company, 1962.

Tebbel, John William. The Inheritors: A Study of America’s Great Fortunes and What Happened to Them. New York: Putnam, 1962.

Warshaw, Robert Irwin. Jay Gould: The Story of a Fortune. New York: Greenberg Publishing, 1928.

Phil Holleran is a research economist with ADJ Associates in Martins­ville, Virginia. A former professor of economics at Hampden-Sydney College, Virginia, he holds a master’s degree in economics, with a con­centration in economic history, from the University of Virginia. He is completing a book chronicling the country’s first bank failure.