Instead of who invented the better question would be who caused the Black Friday? The answer lies in two famous wall street sharks – Jay Gould and Jim Fisk. Together they conspired to corner the gold market which meant buying most of the stocks and then pushing the price sky-high. More about the conspiracy you can read in the article about the Crash of the U.S. Gold Market. The preceding text is dedicated to Jay Gould, one of the “inventors” of Black Friday and one of two creators of the famous conspiracy.
The Biography Of Jay Gould
His full name was Jason Gould. He was born on May 27th, 1836 in Roxbury, New York, to Mary More (1798–1841) and John Burr Gould (1792–1866). His maternal origins went back to Scotland. John More, Jay Gould’s great grandfather was a Scottish immigrant who founded the town of Mooresville, New York.
Childhood And the First Job
Jay’s father was a farmer but even as a little kid, Jay firmly decided that in life he wants nothing to do with that profession. John didn’t take kindly after learning of his son’s attitudes. As a severe man, he dropped him off to nearby school leaving him only with 50 cents in pockets and a few sacks of clothes. The education in the local school of his birthplace led him to the first job which his principal had arranged for him. Jay became a bookkeeper for a blacksmith. In less then six months he was offered half of the business.
Start of Career
In the early part of 1854, before he was 18 years old, Jay sold the blacksmith business to his father. After his first successful sale, Jay devoted himself to private study putting the highest emphasis on mathematics and surveying. In the same year, he surveyed and created maps for Ulster County, New York. Two years later(1856) he published History of Delaware County, and Border Wars of New York, which he had spent several years writing.
Tanning business was his first serious investment. He did not engage it alone but rather in a form of partnership. Zadock Pratt Jr. was a tanner, banker, soldier, and member of the United States House of Representatives. Pratt served in the New York militia from 1819–1826 and was Colonel of the 116th regiment from 1822 until his resignation from the militia on September 4, 1826. Their partnership laster two years, until Pratt’s retirement. Gould bought his part of the business and continued. In the later part of 1856, he engaged in another partnership. This time it was with Charles Mortimer Leupp, a son in law of the American politician Gideon Lee. At the time Leupp was one of the leading leather merchants in the whole of the U.S. Their partnership went well until the Panic of 1857 caused by the declining international economy and over-expansion of the domestic economy. Leupp had lost all of his money, while Gould took advantage and bought former partnership properties for himself. As soon as Leupp had passed away the tannery became a disputed property. Leupp’s brother-in-law, David, believing that his family was deceived by Gould during the collapse of the business, took armed control of the tannery. Eventually, Gould was compelled to sell his shares to David’s company.
Railroad Investments and Speculations
The year 1859 was the one that would launch Gould towards his business peak. It was then when he started with little speculations and investments in the railroad business. At first, he was buying stocks in small railways. His father in law who introduced him to business asked Jay Gould for a help. Panic of 1857 crushed the values of Rutland and Washington railroad stocks which his father in law had previously purchased. To save his investment, Gould was supposed to buy a certain amount of stocks which he did. Price was 10 cents on the dollar and he became in charge of the company. After the Civil War, during which he was buying stocks in New York, Gould was appointed to the manager of the Rensselaer and Saratoga Railroad.
Erie Reailrod Success
Despite the loans, Erie Railroad had encountered financial difficulties during the 1850s and ended in the position of receivership. It was reorganized as Erie Railway. Jay Gould, Drew and Jim fisk engaged in a series of manipulations nicknamed as the Erie War. It ended in summer 1868 when Fisk and Drew lost their shares while Gould became the president.
Black Friday Conspiracy – The Masterpiece
Together with Jim Fisk, Jay Gould started buying all the gold that was on sale. Their plan was to corner the gold market. In general, cornering the market means gaining possessions of a certain product in the amount that is enough to dictate its price. They had started the implementation of their plot in august 1869. The ending result was the crash of the U.S. gold market that happened on September 24, 1869. Thousands of people were pushed into bankruptcy. Since then, Gould was revered as the almighty God of the market.
Lord Gordon Gordon Chapter – Every Master Has a Teacher
Since he was a little boy, Jay Gould was an ambitious man. He always strode towards higher accomplishments and all the wealth in the world wasn’t enough to make him settle down. His next attempt was to take the Erie Railway for himself. In order to achieve this, he needed additional hands so he decided to seek help from Lord Gordon. Also known as Mr. Herbert Hamilton, Lord Gordon was, as it later turned out, a British imposter who instantly had accepted Gould’s bribery of one million dollars in stock. Unfortunately for Jay, Gordon had immediately cashed his stocks. Gould sued him and the case went to trial in March 1873. However, Gordon was granted a bail which he used to flee in Canada where he convinced the authorities that charges against him were a pile of nonsense. After unsuccessful attempts to compel Canadian authorities to give him Gordon-Gordon, Gould together with his associates and three future members of the congress went in Canada to kidnap “The Lord”. They had snatched him successfully but were eventually caught by Canadian authorities which refused their bails. This led to an international incident. The governer of Minnestoa requested their releasement. He put the local militia on a state of full readiness. Thousands of Minnesotans volunteered for a full military invasion of Canada. The prisoners were released but Gould lost any chance of taking the Erie Railroad.
New Conquest – Western Railroads
Since he had no more place in the Erie Railroad he moved to west where he started building new railways. In 1873 he took control of Union Pacific.
Union Pacific, now the largest railroad system in the U.S, was, as it is now, a freight-hauling railroad that used to be completely dependant on local farmers and local ranchers shipments. Since it was the beginning of panic of 1873 – the financial crisis that lasted up until 1877 the railroad stocks were down. Gould became part of almost every single operation that took place within the Union Pacific system. By the end of 1879, he controlled three more western railroads. by 1882, he had controlling interest in 15 percent of the country’s railway tracks. Because the railroads were making profits and had control of rate setting, his wealth increased dramatically.
December 2, 1892, was the day of Gould’s death due to tuberculosis. His wealth was estimated form 72$ million which is over 1.5 billion in today’s measurements.