To GOULD'S astute mind, the expansion in the railroad industry
inevitably led to expansion in the telegraph industry. Under the
Supreme Court ruling, a new railroad was a new telegraph cus-
tomer. Gould, as the controlling factor in a railroad, could con-
tract with Gould, the controlling factor in the new American
Union, for telegraph service to compete and perhaps supplant
the Western Union.

In building up the competitive position of his American Union
to a point of effective striking power, Gould was challenging one
of the country's largest corporate enterprises. The Western Union
was a prosperous dividend payer, and in the expanding telegraph
industry it had little competition. Its contracts with the railroads,
long judicially regarded as exclusive, at least prior to a Supreme
Court decision in 1879, had made the pathway of competitors
difficult. Since its organization in 1856 it had absorbed numerous
companies and now only a few outside its corporate family re-
mained. Gould's effort to break the Western Union's grasp on
the industry with his Atlantic and Pacific had failed, and the com-
pany met the same fate as all predecessors. It was bought out by
the Western Union.

Aside from its excellent financial condition, its real strength
lay in its railroad contracts. It was precisely this citadel of West-
ern Union strength which Gould attacked. No sooner was he in
control of a road than he challenged the Western Union con-
tract. Vanderbilt fought back with injunctions, the same weapon
that his father had wielded more than a decade before in the
Erie battle. The father, however, struck on the offensive; the son,
except on rare occasions, acted on the defensive.

The Western Union's financial strength, paradoxically enough,
proved to be a fatal weakness in the contest with its rival. Its
controlling stockholders came from eastern financial groups. Van-

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