American Rascal: How Jay Gould Built Wall Street's Biggest Fortune
by: Greg Steinmetz (0)
Had Jay Gould put his name on a university or concert hall, he would undoubtedly have been a household name today. The son of a poor farmer whose early life was marked by tragedy, Gould saw money as the means to give his family a better lifeâŠeven if, to do so, he had to pull a fast one on everyone else. After entering Wall Street at the age of twenty-four, he quickly became notorious when he paralyzed the economy and nearly toppled President Ulysses S. Grant in the Black Friday market collapse of 1869 in an attempt to corner the market on goldâan event that remains among the darkest days in Wall Street history. Through clever financial maneuvers, he gained control over one of every six miles of the countryâs rapidly expanding network for railroad tracksâcoming close to creating the first truly transcontinental railroad and making himself one of the richest men in America.
American Rascal shows Gouldâs complex, quirky character. He was at once praised for his brilliance by Rockefeller and Vanderbilt and condemned for forever destroying American business values by Mark Twain. He lived a colorful life, trading jokes with Thomas Edison, figuring Thomas Nastâs best sketches, paying Boss Tweedâs bail, and commuting to work in a 200-foot yacht.
Gould thrived in an expanding, industrial economy in which authorities tolerated inside trading and stock price manipulation because they believed regulation would stifle progress. But by taking these practices to new levels, Gould showed how unbridled capitalism was, in fact, dangerous for the American economy. This eye-opening history explores Gouldâs audacious exploitation of economic freedom triggered the first public demands for financial reformâa call that still resonates today.
The Reviews
Interesting story about financier, railroad man, Jay Gould, someone who I hadn't heard of before. Really made his mark around and after the Civil War. Complicated from the standpoint on one hand he was smart, worked hard, and was a good family man. On the other hand, he was corrupt in business, didn't have integrity in his dealings, and seemed incredibly focused on money. He financed a number of railroads and helped America grow but he was also involved in a lot of shady speculation deals. His time was a wild time where insider trading was legal and bribery was the mainstream. I'm glad we have moved to a state of more regulated capitalism. While not perfect yet, at its heart, capitalism should give everyone a fair opportunity while incenting those whose creativity pushes society forward. The book was a bit linear and didn't really draw much for conclusions, but all in all, was an interesting and quick read.
According to Steinmetz, Mark Twain wrote, âJay Gould (1836-1892) was the mightiest disaster which has ever befallen this countryâŠThe people had desired money before his day, but he taught them to fall down and worship it.âSteinmetz himself summarizes, âThatâs the thing about Gould. He lied. He cheated. He stole. But he was so good at what he did, so intelligent in the execution, and such a âclean, kind, and industriousâ family man that try as you might, you canât hate him properly.âFor me, that logic is just a little too tortured. I have to side with Twain. Gould made Gordon Gekko look like a choirboy, although it must be said that a lot of the cheating that Gould brought to Wall Street was perfectly legal at the time.Steinmetz is a good writer and the book is well researched. I personally found no entertainment value to the story, however. Many people start out in modest circumstances but nonetheless resist the temptations that Gould embraced.There is one educational nugget to Gouldâs story, however. And that message is the fallacy that the capital markets are capable of managing themselves. âAs much as Gouldâs career showed the creative power of laissez-faire economics, it also shone a light on its shortcomings and made a mockery of Emersonâs faith in free markets.â Self-restraint is no match for the man or woman determined to acquire wealth for the sake of wealth itself.For Gould it was railroads and Western Union. Today, itâs Big Tech. Thatâs not to suggest that they practice Gouldâs methods. The lesson of Gould, however, despite the modicum of regulation that has been put in place since his time â and largely dismantled in recent years â has not been taken to heart.
I had never heard of Jay Gould but his story is a fascinating one. For a story taking place in the mid to late 1800s I thought the book was a great read with enough detail to give the reader insights and tales from an interesting period of US history. Big money controlled big industry and this is a good depiction of the era
