Magazine article The Spectator

Keeping an Eye on the Wall Street Ball

Magazine article The Spectator

Keeping an Eye on the Wall Street Ball

Article excerpt

DARK GENIUS OF WALL STREET : THE MISUNDERSTOOD LIFE OF JAY GOULD , KING OF THE ROBBER BARONS by Edward J. Renehan Jr Basic Books, £17.99, pp. 352, ISBN 0465068855 . £14.39 (plus £2.45 p&p) 0870 429 6655

Jay Gould's name may not resonate much with modern British followers of financial markets, but it ought to.

He was one of the cleverest dealers ever to corner a commodity, short a share or (allegedly) drive a fleeced former partner to suicide. At his death in 1892, this 'king of the robber barons' left $72 million -- more than half of it made in a single transaction in the shares of the Union Pacific and Kansas Pacific railroads -- which puts him on a par with the banker J. P. Morgan, who left $80 million in 1912.

Fleet Street's readers certainly knew what to think at the time of Gould's passing: the London Evening Standard condemned him to eternal fire as a 'wrecker of industries and an impoverisher of men' while the Evening News thought him 'less a man than a machine for churning money'.

From his earliest days in the tannery trade in his native Catskills, Gould carried the reputation of being ruthless, coldhearted and manipulative. In later life, in order to sustain his market power, he positively encouraged this view of himself, keeping his philanthropy secret, and not bothering to point out to those who aimed anti-Semitic barbs at him that he was not even Jewish but 'a perfunctory Episcopalian'.

But because he was so feared any rumour that he had his eye on a stock could make it soar or plunge according to his will; beyond that, he could not care less what anyone thought of him. So his shade -- whether now observing from above or below -- must be surprised to find such a judicious biographer as Edward J.

Renehan, Jr setting out to prove that Gould was not, after all, the villain of legend, but merely a man who outsmarted his peers time and again in a game in which fair play was meaningless because the rules had yet to be defined.

Thus the promoters of companies were in the habit of issuing as many shares as the market would buy without giving any indication as to how many had been issued in aggregate, making them impossible to value. …

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