For a while after Mr. Gould got control of the Manhattan company there was some show of fight between him and Cyrus W. Field, who represented the stockholders of the New York company. Soon Gould, Field and Sage came together and had an amicable understanding. An opinion was obtained from Judge Westbrook, who held court in Jay Gould’s private office, denying the application of the New York company to get its road out of the hands of the Manhattan company, and in the latter part of October the Gould-Field-Sage party entered into an agreement in behalf of the three companies by which the Manhattan stockholders were to receive only 6 per cent. dividend on their stock instead of 10 per cent. Next came an order from Judge Westbrook taking the Manhattan company out of the hands of the receivers, and that corporation, which was absolutely under Gould’s control, proceeded to rivet its hold upon the entire elevated railway system of this city. Immediately following Judge Westbrook’s action the Manhattan stock went above 52, and on November 9th, the day that Jay Gould was elected president of the company, the stock was quoted at 55.
The steps which Gould and his associates took to “freeze out” the original stockholders of the Metropolitan company were exposed by the New York Times in a series of articles beginning in December, 1881, and continuing until the Legislature ordered a special investigation into the matter in April, 1882. Specific charges were made against Hamilton Ward, as attorney general, and Justice Theodoric R. Westbrook of the Supreme Court for their part in the elevated railroad proceedings, and the Judiciary Committee of the Assembly spent several weeks in taking testimony. Jay Gould and others were examined, and letters and telegrams from Judge Westbrook to Gould’s lawyers were produced in evidence, showing that Westbrook had a very friendly understanding with Mr. Gould. It was also proved that on two occasions Judge Westbrook exercised his judicial functions in Gould’s private office. The committee was divided in its conclusions and Westbrook just escaped impeachment. The effective lessons of the exposure and the official investigation, however, put a stop to further “freeze-out” tactics in dealing with the honest stockholders of the Metropolitan Elevated Railroad Company. Those who had refused to be shaken off by the bearish assaults on the property finally received satisfactory compensation for their property from Mr. Gould and his associates.
After obtaining full control of the elevated railroad system, Gould and his associates voted to double the capital stock, making it $26,000,000. In opposing the reduction of the fare from 10 cents to 5 cents, they argued that a 5 cent fare would not enable them to pay dividends on their $26,000,000. A member of the Senate committee suggested that they might reduce their capitalization. Mr. Field became identified with all of Mr. Gould’s properties, but gave most of his attention to the development of the elevated roads. In 1886 he inaugurated the big bull movement in Manhattan stock. He “boomed” the stock in every possible way, and bought immense quantities, and publicly predicted that it would sell at 200. He succeeded in pushing the price to 175. Like almost all artificial corners this movement collapsed suddenly and Mr. Field was nearly buried in the ruins. Many believed at the time that this collapse was precipitated by Gould and Sage. It might have come about by other causes, but Gould gave the tottering structure the push that leveled it to the ground. There were many reasons, it was argued, for his action. First, Field was no longer necessary, but on the contrary a hindrance to Gould and Sage, and they therefore wanted to get rid of him; and second, Field was conducting his bull movement independently of them. They would profit by his fall, while if he succeeded the system might pass into his hands. So in June, 1887, came the collapse. Mr. Field never charged Gould with having precipitated it, and Gould himself claimed that he came to the rescue of Field and saved him from bankruptcy. It was, however, a remarkable deal and one by which Gould made himself absolutely master of the elevated system, of which in 1891 he made his eldest son vice-president, and another son a director. Field was carrying an immense amount of stock on margins and was consequently a heavy borrower of money. Gould and Sage were lenders. The bank reserves were low. Gould and Sage called in their loans and Gould found it impossible to negotiate loans and was thus obliged to throw over his stock at a sacrifice. The price of Manhattan fell from 160 to 120 and Gould purchased from Field 78,000 shares at prices understood to have ranged from par to 120. Field saved his real estate and other property, but his power in the street was gone. His later history was a tragedy. In 1891, within a few weeks, he lost his wife and his son became a disgraced bankrupt. A few months ago Field died, broken hearted.
CHAPTER XIII.
THE LIFE OF A WALL STREET KING.
While it is true that the story of Jay Gould’s career in Wall street is closely allied with his outside operations, a full account of which has already been given, there still remain many other incidents connected directly with his work on the street of unusual interest. Out of this mass of material but two or three incidents of the most commanding interest can be used.
GOULD’S BIRTHPLACE, AND HIS PALACE ON THE HUDSON.
The most dramatic of these was the pommeling of Jay Gould by Major A. A. Selover in August, 1877. Selover was a Californian, a six-footer, a blond, muscular and vigorous. He first attained prominence in Wall street when James R. Keene came East after his successful mining operations in San Francisco, by which he achieved a fortune of $8,000,000. Keene was a daring, almost foolhardy stock gambler. He always played for big stakes and took enormous chances. His success in San Francisco had been so great that he entered Wall street with the idea of clearing all before him. He tackled Gould as the biggest animal in the arena, but found to his sorrow that he had to deal with a man more able than he, scarcely less daring but far more cautious. In a few short years Keene’s wealth had dwindled away, and early in 1884 he failed, owing hundreds of thousands of dollars in the shape of “puts,” “calls” and “straddles.” He dropped at the rate of about a million dollars a year in Wall street, and no small proportion of this found its way into the pockets of Gould. Yet Keene at one time was thought to have outmatched Gould. Selover introduced Keene to Gould, and acted as go-between for them in certain operations in which both were interested. Early in 1877 the two men combined forces in one deal. That is to say, they joined in one enterprise and fought each other behind each other’s back. It was a case of diamond cut diamond. Keene formed a big pool, and, beginning to fight Gould, finally went over to him, being led into this change largely through the instrumentality of Selover. Both Keene and Selover then operated on an understanding with Gould, but soon found, as they charged, that Gould was secretly selling them out. Gould and Keene had a stormy scene in Russell Sage’s office, when the latter is said to have brandished a pistol in Gould’s face. The deal had been mainly in Western Union, which Gould did not then control, and Atlantic and Pacific, which he did control. Gould’s double-dealing not only made Keene very mad, but made Selover very desperate. He had placed reliance in Gould’s statements and had suffered loss, and resolved upon revenge. Accordingly, on the 2d of August, 1877, while walking down Exchange place from Broadway, Selover, meeting Gould walking up to the office of Belden & Co., No. 80 Broadway, of which he was then a partner, first engaged him in what appeared to be an amicable conversation, but soon resulted in an assault. Selover first struck Gould in the face and then dropped him over an areaway at No. 65 Exchange place, which was seven or eight feet deep. Mr. Gould was a good deal shaken up, but not seriously injured. Selover left to go to his brokers and Gould proceeded to transact his business as usual. He was assisted from the areaway, singularly enough, by George Crouch, who has been identified with several incidents in Gould’s career from the days of Erie and Black Friday to the Kansas Pacific criminal prosecution, and who was one-third artist, one-third newspaper man and one-third speculator. The Selover incident created an immense sensation at the time, and the newspapers printed columns about it. Selover became quite a hero, for while there was nothing very courageous in his assault from a physical point of view, as he was more than a match for timid Mr. Gould, yet to attack Gould was considered by many an act of moral bravery. Selover declared that he had attacked Gould because Gould had been guilty of fraud, lying and duplicity. Gould, he said, had made arrangements with him to go short on Western Union, and while he (Selover) was selling accordingly in good faith he discovered that Gould was buying heavily. When he learned of this he determined to punish him the first time he met him, and so he had charged him with the fraud and slapped his face. “I attacked him on my own account alone,” he added, “and regardless of the fact that he had played Jim Keene the same trick. He is notoriously treacherous, and this is not the first time he has been punished for the same offense.” Poor Mr. Selover never amounted to very much in Wall street after this, though he continued to be seen there daily. Gould, after this incident, rarely appeared in the street unless accompanied by stalwart G. P. Morosini.
It is related that not long after this Keene came near getting his revenge on Gould. The latter was putting all his energies into Union Pacific, and carrying $22,000,000 of the stock, mostly in margins. Keene organized an opposition party and nearly succeeded in breaking Gould. Sage, however, came to the latter’s assistance with $2,000,000 of much-needed cash, and Gould was saved. Keene’s purpose was to drive Gould from the street forever, but he not only failed, but in a few years he was himself a bankrupt, with Gould more powerful and richer than ever.