How Did Jay Gould Spend His Money?
Jay Gould was an American railroad executive and capitalist who bought stock in and developed railroads. He and three other “robber barons” also bought large amounts of loose gold in 1869, triggering a financial collapse and ruining many investors.
Jay Gould began investing in small railroads in 1859. During the Civil War, he continued to buy stock in railroads. In 1868, by manipulating the pricing of Erie Railway stock, he became its president, and in 1869, he became manager of the Rensselaer and Saratoga Railroad. He relinquished control of the Erie Railway in 1872, and he started buying stock in the Union Pacific Railroad, which he controlled by 1874. By 1881, his railroad empire covered about 15,800 miles.
Not all of his investments panned out. In 1869, he began buying gold on the free market to inflate its value, convinced that the U.S. Treasury would not sell its gold. The U.S. Treasury, catching on to his plan, sold its gold, which deflated its value and caused stock prices to fall. Despite losing a fortune on his investments, he weathered the financial storm and continued to invest in and profit from railroads.
That same year, he took control of the Western Union Telegraph Company, and from 1879 to 1883, he also owned the New York World newspaper. In 1886, he bought the Manhattan Elevated Railroad, which controlled elevated railways in New York City. When he died in 1892, he was worth an estimated $77 million, or $78.3 billion in 2013 dollars, according to Michael Klepper and Robert Gunther, authors of “The Wealthy 100.”