THE ROAD TO REVERE

I present to you a symbol of the Gilded Age, a captain of industry, a practitioner of power and a advocate of the morality of wealth; George Morgan Browne. I'll wager you've never heard of him. He was a lawyer and was responsible for one of the most infamous train wrecks in American history - and I'll bet you've never heard of that, either.  George Browne graduated from the New Haven law school (Yale) in 1836 and four years later, before he was thirty, he had opened his own practice in Boston . He never doubted the nobility of his beliefs - after all his second wife was a Cabot, and this was Boston “...The home of the bean and the cod, Where the Lowells talk only to Cabots, And the Cabots talk only to God.”. And what God told George Browne was that the rich in America did not have enough power. “They are in a small minority at the polls”, he wrote, and “their influence in....elections is notoriously less than that of an equal number of voters.” His villain would be familiar to a political observer today. “The spoilsmen avail themselves of whatever party is in power, and are equally at home in either.” The “spoilsmen” were, of course, fighting for a minimum wage, an eight hour work day and a five day work week, with overtime.

The same year that George Browne graduated law school, the Eastern Railroad was chartered in Massachusetts, capitalized with just $1,300.000. That was barely enough to lay a single line of tracks eight miles north from Boston to the beach hamlet of Revere, then 3 miles further to Lynn. In future years the company built their line on to Salem, then to Marblhead, Newburyport and finally all the way to Portland, Maine. The Eastern line carried 75, 000 weekly working class commuters at fifty cents for a ticket to Lynn, a dollar to Portland. But it was so underfunded that from the beginning it struggled with shortages of equipment. and personnel.

One of the conductors would later describe the job as “...down one day and up the next, and rest the third, and brake by hand the whole way as...(the) cars were not fitted with the air brake” The Westinghouse air brake was invented shortly after the Civil War, but the Eastern did not trust it anymore than they trusted the 30 year old telegraph. The management avoided these “unnecessary” expenses, and despite its reputation for shoddiness in service and equipment, the Eastern was always able pay annual dividends to its stockholders of between 6 and 8%. It was a business model that seemed to work, at least until July of 1855 when President and Treasurer, Mr. William Tuckerman, was forced to admit that he had lost $281,000 (equivalent to $64 million today) while literally gambling to make corporate ends meet. (Sound familiar?).

The hard nosed Mr. John Howe replaced Tukerman as President, and new blood was brought onto the board as well - including George Browne. Sixty-five of the firm's 354 employees were laid off, and the remaining workers scrambled to keep 26 trains running every day. For the time being, dividends were forgotten. In 1858 Mr. Howe stepped down and George Browne became President, at a salary of $5,000 a year (equivalent to over a $1 million today) .

After eight years of rigorous penny pinching President Browne had returned the yearly corporate dividends to 8%. According to an official company history, the Eastern's 29 locomotives, 48 yellow passenger cars (fewer than they had owned in 1858) and 13 baggage cars, were not considered “worn out until (they) had been rebuilt from one to three times” despite assurances in the annual reports that the equipment was “...equal of any first class railroad in New England”

George Browne, who signed those annual reports, even managed to pick up a cheap Confederate locomotive which had been captured by Union troops. The Eastern's maintenance chief complained this bargain was so prone to breakdowns, he refereed to it as “The Rebel”.  Even after the war the 28 trains scheduled to run on the Eastern line daily still did not have “air brakes”, nor did the company use the telegraph to communicate between stations. But the 55 tired locomotives, 98 worn out passenger cars and 27 baggage cars owned by the Eastern Railroad were simply not enough to keep the system running smoothly.  Delays and breakdowns were daily events, and passenger complaints fell on deaf ears because the company was listening to the stockholders, not the customers. The Eastern was the only line servicing the fishing villages along the coast, turning them into suburbs of Boston but also making them captive customers. The stock rose to $125 a share.

Finally, in the spring of 1871, in an attempt to deal with the constantly over-stretched company, President Browne authorized doubling the shares available – increasing the working capital for the road to eight million dollars. The goal was to buy more locomotives and cars, but no one was so impolite as to point out that this was just the sort of “gamble” which had gotten poor Mr. Tuckerman into such trouble. But it was already too late.

The problem came to a head on a sweltering Saturday, 26 August, 1871. Because of the summer weekend traffic, the single track line was again overloaded. The schedule called for 152 trains this day, but the passenger load forced the overworked staff at the Eastern's Boston terminal to send out 192. They spent the day desperately jamming passengers into hastily turned around cars and dispatching trains as quickly as they could. The schedule was in tatters, the customers were grumbling about the even worse than usual service, and express trains were slipped in between scheduled ones whenever possible. Just about 8:30, as the exhausting day was finally drawing to a close, a misty fog settled in off Revere Beach, the first truly public beach in America. A local from Everett pulled into the tiny station at Revere, running 20 minutes late. And while the passengers were still edging past each other through the open doors, the rear car was suddenly illuminated by the headlight of an oncoming express, bound for Sargus at thirty miles an hour. The Sargus engineer slammed on the locomotive’s brakes, but inertial drove the following cars onward.

The collision, it would be later judged, occurred at well under 20 miles an hour. A survivor in the fatal rear car told the New York Times, “Suddenly I...saw the crowd of passengers rushing over the seats and through the aisle, and the locomotive coming like fury after them.” The cowcatcher on the front of the engine split the wooden passenger car like a can opener. Yellow painted wood was instantly converted to kindling, which the kerosene lamps illuminating the car set aflame. The engine's smokestack snapped off, along with its steam valves. Victims, struggling to catch their breath, sucked scalding air into their lungs.

Reported the Newport, Rhode Island Daily News, “The shrieks and groans of the wounded and scalded, their frantic calls for help and their wild ejaculations caused by a frenzy of pain formed a continuation of sounds such as no mortal ear desired to hear a second time...Some were pinned with splinters, some had arms and legs broken, while other were mangled beyond recognition. Many, in fact the majority of the dead, were apparently free from bruises, but the peeling skin and deathly pallor which overspread the flesh told plainly that steam and scalding water had been frightful and effective agents of death.”

Of the 75 people jammed into the last passenger car, 29 died instantly or over the next several days. In both trains, 57 more were injured, and many more emotionally maimed for the rest of their lives. It was far from the worst rail accident in American history - 101 dead in Nashville, Tennessee in 1918 - but it was the seminal event in rail safety, thanks to Charles Frances Adams – grandson of John Quincy Adams – and director of the Massachusetts Board of Railroad Commissioners.

Adams' investigation discovered that the company had a regular policy of issuing schedule changes at the last minute, and verbally. It was a system which almost seemed designed to cause confusion, delays and accidents - and it had repeatedly caused all three. And the Commission's final report explained the failure in terms even a businessman like George Browne might understand; “A very large proportion of the rolling stock of the Eastern railroad was rendered unavailable...when it was the most needed, because trains were standing still at points of passing, waiting for other trains which were out of time...to the equal loss and inconvenience of the public and the corporation.”

Adam's report, and two coroners' juries, blamed the conductor and engineer of the express for the accident. That was as standard as citing “pilot error” in an airline crash. But Adam's report went further. It dwelt on the management of the Eastern, and it named in particular George Browne, who had directed the Eastern Railroad for fourteen years. The public agreed. Said a politician, “There is no accident in this case...only the greed of the Eastern Railroad Company”. Six months later, on 5 February 1872, George Browne resigned. His replacement invested in telegraph lines, and Westinghouse air brakes, and electric signals to warn engineers of trains ahead of them. All these improvements (and settling the civil lawsuits) cost the Eastern $510,600 (the equivalent to $90 million today). No dividends were paid in 1872, and the stock value dropped to $51 a share. In retrospect the cost of safety seemed cheap. To an ideologue, this was proof that unrestricted capitalism worked. But ideology failed to consider the moral cost of the the 29 dead and the many more scared survivors.

To escape the public outrage, George Browne left the country, living in Europe for a year. But he never altered in his views or his willingness to make them known. He even wrote letters to the London Times, correcting British politicians in their thinking. And when he came home to Boston he became a consultant for other corporations, always an advocate for the wealthy against what he termed “the vicious caprices of the populace”. In 1881 he moved to Washington, D.C., and lobbied for railroads and his vision of capitalism. He died there on 25 April, 1895, at the age of 73.

By then the Eastern Railroad had been gobbled up by its competitor, The Boston and Maine. That is the nature of capitalism - its strength and its sin – at its core, it is cannibalism, economic and flesh and blood.

- 30 -

THE ROAD TO REVERE

I present to you a symbol of the Gilded Age, a captain of industry, a practitioner of power and a advocate of the morality of wealth; George Morgan Browne. I'll wager you've never heard of him. He was a lawyer and was responsible for one of the most infamous train wrecks in American history - and I'll bet you've never heard of that, either.  George Browne graduated from the New Haven law school (Yale) in 1836 and four years later, before he was thirty, he had opened his own practice in Boston . He never doubted the nobility of his beliefs - after all his second wife was a Cabot, and this was Boston “...The home of the bean and the cod, Where the Lowells talk only to Cabots, And the Cabots talk only to God.”. And what God told George Browne was that the rich in America did not have enough power. “They are in a small minority at the polls”, he wrote, and “their influence in....elections is notoriously less than that of an equal number of voters.” His villain would be familiar to a political observer today. “The spoilsmen avail themselves of whatever party is in power, and are equally at home in either.” The “spoilsmen” were, of course, fighting for a minimum wage, an eight hour work day and a five day work week, with overtime.

The same year that George Browne graduated law school, the Eastern Railroad was chartered in Massachusetts, capitalized with just $1,300.000. That was barely enough to lay a single line of tracks eight miles north from Boston to the beach hamlet of Revere, then 3 miles further to Lynn. In future years the company built their line on to Salem, then to Marblhead, Newburyport and finally all the way to Portland, Maine. The Eastern line carried 75, 000 weekly working class commuters at fifty cents for a ticket to Lynn, a dollar to Portland. But it was so underfunded that from the beginning it struggled with shortages of equipment. and personnel.

One of the conductors would later describe the job as “...down one day and up the next, and rest the third, and brake by hand the whole way as...(the) cars were not fitted with the air brake” The Westinghouse air brake was invented shortly after the Civil War, but the Eastern did not trust it anymore than they trusted the 30 year old telegraph. The management avoided these “unnecessary” expenses, and despite its reputation for shoddiness in service and equipment, the Eastern was always able pay annual dividends to its stockholders of between 6 and 8%. It was a business model that seemed to work, at least until July of 1855 when President and Treasurer, Mr. William Tuckerman, was forced to admit that he had lost $281,000 (equivalent to $64 million today) while literally gambling to make corporate ends meet. (Sound familiar?).

The hard nosed Mr. John Howe replaced Tukerman as President, and new blood was brought onto the board as well - including George Browne. Sixty-five of the firm's 354 employees were laid off, and the remaining workers scrambled to keep 26 trains running every day. For the time being, dividends were forgotten. In 1858 Mr. Howe stepped down and George Browne became President, at a salary of $5,000 a year (equivalent to over a $1 million today) .

After eight years of rigorous penny pinching President Browne had returned the yearly corporate dividends to 8%. According to an official company history, the Eastern's 29 locomotives, 48 yellow passenger cars (fewer than they had owned in 1858) and 13 baggage cars, were not considered “worn out until (they) had been rebuilt from one to three times” despite assurances in the annual reports that the equipment was “...equal of any first class railroad in New England”

George Browne, who signed those annual reports, even managed to pick up a cheap Confederate locomotive which had been captured by Union troops. The Eastern's maintenance chief complained this bargain was so prone to breakdowns, he refereed to it as “The Rebel”.  Even after the war the 28 trains scheduled to run on the Eastern line daily still did not have “air brakes”, nor did the company use the telegraph to communicate between stations. But the 55 tired locomotives, 98 worn out passenger cars and 27 baggage cars owned by the Eastern Railroad were simply not enough to keep the system running smoothly.  Delays and breakdowns were daily events, and passenger complaints fell on deaf ears because the company was listening to the stockholders, not the customers. The Eastern was the only line servicing the fishing villages along the coast, turning them into suburbs of Boston but also making them captive customers. The stock rose to $125 a share.

Finally, in the spring of 1871, in an attempt to deal with the constantly over-stretched company, President Browne authorized doubling the shares available – increasing the working capital for the road to eight million dollars. The goal was to buy more locomotives and cars, but no one was so impolite as to point out that this was just the sort of “gamble” which had gotten poor Mr. Tuckerman into such trouble. But it was already too late.

The problem came to a head on a sweltering Saturday, 26 August, 1871. Because of the summer weekend traffic, the single track line was again overloaded. The schedule called for 152 trains this day, but the passenger load forced the overworked staff at the Eastern's Boston terminal to send out 192. They spent the day desperately jamming passengers into hastily turned around cars and dispatching trains as quickly as they could. The schedule was in tatters, the customers were grumbling about the even worse than usual service, and express trains were slipped in between scheduled ones whenever possible. Just about 8:30, as the exhausting day was finally drawing to a close, a misty fog settled in off Revere Beach, the first truly public beach in America. A local from Everett pulled into the tiny station at Revere, running 20 minutes late. And while the passengers were still edging past each other through the open doors, the rear car was suddenly illuminated by the headlight of an oncoming express, bound for Sargus at thirty miles an hour. The Sargus engineer slammed on the locomotive’s brakes, but inertial drove the following cars onward.

The collision, it would be later judged, occurred at well under 20 miles an hour. A survivor in the fatal rear car told the New York Times, “Suddenly I...saw the crowd of passengers rushing over the seats and through the aisle, and the locomotive coming like fury after them.” The cowcatcher on the front of the engine split the wooden passenger car like a can opener. Yellow painted wood was instantly converted to kindling, which the kerosene lamps illuminating the car set aflame. The engine's smokestack snapped off, along with its steam valves. Victims, struggling to catch their breath, sucked scalding air into their lungs.

Reported the Newport, Rhode Island Daily News, “The shrieks and groans of the wounded and scalded, their frantic calls for help and their wild ejaculations caused by a frenzy of pain formed a continuation of sounds such as no mortal ear desired to hear a second time...Some were pinned with splinters, some had arms and legs broken, while other were mangled beyond recognition. Many, in fact the majority of the dead, were apparently free from bruises, but the peeling skin and deathly pallor which overspread the flesh told plainly that steam and scalding water had been frightful and effective agents of death.”

Of the 75 people jammed into the last passenger car, 29 died instantly or over the next several days. In both trains, 57 more were injured, and many more emotionally maimed for the rest of their lives. It was far from the worst rail accident in American history - 101 dead in Nashville, Tennessee in 1918 - but it was the seminal event in rail safety, thanks to Charles Frances Adams – grandson of John Quincy Adams – and director of the Massachusetts Board of Railroad Commissioners.

Adams' investigation discovered that the company had a regular policy of issuing schedule changes at the last minute, and verbally. It was a system which almost seemed designed to cause confusion, delays and accidents - and it had repeatedly caused all three. And the Commission's final report explained the failure in terms even a businessman like George Browne might understand; “A very large proportion of the rolling stock of the Eastern railroad was rendered unavailable...when it was the most needed, because trains were standing still at points of passing, waiting for other trains which were out of time...to the equal loss and inconvenience of the public and the corporation.”

Adam's report, and two coroners' juries, blamed the conductor and engineer of the express for the accident. That was as standard as citing “pilot error” in an airline crash. But Adam's report went further. It dwelt on the management of the Eastern, and it named in particular George Browne, who had directed the Eastern Railroad for fourteen years. The public agreed. Said a politician, “There is no accident in this case...only the greed of the Eastern Railroad Company”. Six months later, on 5 February 1872, George Browne resigned. His replacement invested in telegraph lines, and Westinghouse air brakes, and electric signals to warn engineers of trains ahead of them. All these improvements (and settling the civil lawsuits) cost the Eastern $510,600 (the equivalent to $90 million today). No dividends were paid in 1872, and the stock value dropped to $51 a share. In retrospect the cost of safety seemed cheap. To an ideologue, this was proof that unrestricted capitalism worked. But ideology failed to consider the moral cost of the the 29 dead and the many more scared survivors.

To escape the public outrage, George Browne left the country, living in Europe for a year. But he never altered in his views or his willingness to make them known. He even wrote letters to the London Times, correcting British politicians in their thinking. And when he came home to Boston he became a consultant for other corporations, always an advocate for the wealthy against what he termed “the vicious caprices of the populace”. In 1881 he moved to Washington, D.C., and lobbied for railroads and his vision of capitalism. He died there on 25 April, 1895, at the age of 73.

By then the Eastern Railroad had been gobbled up by its competitor, The Boston and Maine. That is the nature of capitalism - its strength and its sin – at its core, it is cannibalism, economic and flesh and blood.

- 30 -

THE ROAD TO REVERE

I present to you a symbol of the Gilded Age, a captain of industry, a practitioner of power and a advocate of wealth; George Morgan Browne. I'll wager you've never heard of him. He was a lawyer and was responsible for one of the most infamous train wrecks in American history - and I'll bet you've never heard of that, either. He graduated from the New Haven law school (Yale) in 1836 and four years later, before he was thirty, he had opened his own practice in Boston . He never doubted the nobility of his beliefs - after all his second wife was a Cabot, and this was Boston “...The home of the bean and the cod, Where the Lowells talk only to Cabots, And the Cabots talk only to God.”. And what God told  George Browne was that the rich in America did not have enough power. “They are in a small minority at the polls”, he wrote, and “their influence in....elections is notoriously less than that of an equal number of voters.” His villain would be familiar to a political observer today. “The spoilsmen avail themselves of whatever party is in power, and are equally at home in either.” The “spoilsmen” were, of course, progressives..

The same year that George Browne graduated law school, the Eastern Railroad was chartered in Massachusetts, capitalized with just $1,300.000. That was barely enough to lay a single line of tracks eight miles north from Boston to the beach hamlet of Revere, then 3 miles further to Lynn, then Salem, Marblhead, Newburyport and finally all the way to Portland, Maine. The Eastern line carried 75, 000 weekly working class commuters at fifty cents for a ticket to Lynn, a dollar to Portland. But it was so underfunded that from the beginning it struggled with shortages of equipment. and personnel.

One of the conductors would later describe the job as “...down one day and up the next, and rest the third, and brake by hand the whole way as...(the) cars were not fitted with the air brake” The Westinghouse air brake was invented shortly after the Civil War, but the Eastern did not trust it anymore than they trusted the 30 year old telegraph. The management avoided these “unnecessary” expenses, and despite its reputation for shoddiness in service and equipment, the Eastern was always able pay annual dividends to its stockholders of between 6 and 8%. It was a business model that seemed to work, at least until July of 1855 when President and Treasurer, Mr. William Tuckerman, was forced to admit that he had lost $281,000 (equivalent to $64 million today) while gambling to make corporate ends meet. (Sound familar?).

The hard nosed Mr. John Howe replaced Tukerman as President, and new blood was brought onto the board as well - including George Browne. Sixty-five of the firm's 354 employees were laid off, and the remaining workers scrambled to keep 26 trains running every day. For the time being, dividends were forgotten. In 1858 Mr. Howe stepped down and George Browne became President, at a salary of $5,000 a year (equivalent to over a $1 million today) .

After eight years of rigorous penny pinching President Browne had returned the yearly corporate dividends to 8%. According to an official company history, the Eastern's 29 locomotives, 48 yellow passenger cars (fewer than they had owned in 1858) and 13 baggage cars, were not considered “worn out until (they) had been rebuilt from one to three times” despite assurances in the annual reports that the equipment was “...equal of any first class railroad in New England”

George Browne, who signed those annual reports, even managed to pick up a cheap Confederate locomotive which had been captured by Union troops. The Eastern's maintenance chief complained this bargain was so prone to breakdowns, he refereed to it as “The Rebel”.  Even after the war the 28 trains scheduled to run on the Eastern line daily still did not have “air brakes”, nor did the company use the telegraph to communicate between stations. But the 55 tired locomotives, 98 worn out passenger cars and 27 baggage cars owned by the Eastern Railroad were simply not enough to keep the system running smoothly. Delays and breakdowns were daily events,. and passenger complaints fell on deaf ears because the company was listening to the stockholders, not the customers. The Eastern was the only line servicing the fishing villages along the coast, turning them into suburbs of Boston but also making them captive customers. The stock rose to $125 a share.

Finally, in the spring of 1871, in an attempt to deal with the endemic over-stretched company, President Browne authorized doubling the shares available – increasing the working capital for the road to eight million dollars. The goal was to buy more locomotives and cars, but no one was so impolite as to point out that this was just the sort of “gamble” which had gotten poor Mr. Tuckerman into such trouble. But it was already too late.

The problem came to a head on a sweltering Saturday, August 26^th, 1871. Because of the summer weekend traffic, the single track line was again overloaded. The schedule called for 152 trains this day, but the passenger load forced the overworked staff at the Eastern's Boston terminal to send out 192. They spent the day desperately jamming passengers into hastily turned around cars and dispatching trains as quickly as they could. The schedule was in tatters, the customers were grumbling about the even worse than usual service, and express trains were slipped in between scheduled ones whenever possible. Just about 8:30, as the exhausting day was finally drawing to a close, a misty fog settled in off Revere Beach, the first truly public beach in America. A local from Everett pulled into the tiny station at Revere, running 20 minutes late. And while the passengers were still edging past each other through the open doors, the rear car was suddenly illuminated by the headlight of an oncoming express, bound for Sargus at thirty miles an hour. The Sargus engineer slammed on the locomotive’s brakes, but inertial drove the following cars onward.

The collision, it would be later judged, occurred at well under 20 miles an hour. A survivor in the fatal rear car told the New York Times, “Suddenly I...saw the crowd of passengers rushing over the seats and through the aisle, and the locomotive coming like fury after them.” The cowcatcher on the front of the engine split the wooden passenger car like a can opener. Yellow painted wood was instantly converted to kindling, which the kerosene lamps illuminating the car set aflame. The engine's smokestack snapped off, along with its steam valves. Victims, struggling to catch their breath, sucked scalding air into their lungs.

Reported the Newport, Rhode Island Daily News, “The shrieks and groans of the wounded and scalded, their frantic calls for help and their wild ejaculations caused by a frenzy of pain formed a continuation of sounds such as no mortal ear desired to hear a second time...Some were pinned with splinters, some had arms and legs broken, while other were mangled beyond recognition. Many, in fact the majority of the dead, were apparently free from bruises, but the peeling skin and deathly pallor which overspread the flesh told plainly that steam and scalding water had been frightful and effective agents of death.”

Of the 75 people jammed into the last passenger car, 29 died instantly or over the next several days. Along both trains, 57 more were injured, and many more emotionally maimed for the rest of their lives. It was far from the worst rail accident in American history - 101 dead in Nashville, Tennessee in 1918 - but it was the seminal event in rail safety, thanks to Charles Frances Adams – grandson of John Quincy Adams – and director of the Massachusetts Board of Railroad Commissioners.

Adams' investigation discovered that the company had a regular policy of issuing schedule changes at the last minute, and verbally. It was a system which almost seemed designed to cause confusion, delays and accidents - and it had repeatedly caused all three. And the Commission's final report explained the failure in terms even a businessman like George Browne might understand; “A very large proportion of the rolling stock of the Eastern railroad was rendered unavailable...when it was the most needed, because trains were standing still at points of passing, waiting for other trains which were out of time...to the equal loss and inconvenience of the public and the corporation.”

Adam's report, and two coroners' juries, blamed the conductor and engineer of the express for the accident. That was as standard as citing “pilot error” in an airline crash. But Adam's report went further. It dwelt on the management of the Eastern, and it named in particular George Browne, who had directed the Eastern Railroad for fourteen years. The public agreed. Said a politician, “There is no accident in this case...only the greed of the Eastern Railroad Company”. Six months later, on February 5, 1872, George Browne resigned. His replacement invested in telegraph lines, and Westinghouse air brakes, and electric signals to warn engineers of trains ahead of them. All these improvements (and settling the civil lawsuits) cost the Eastern $510,600 (the equivalent to $90 million today). No dividends were paid in 1872, and the stock value dropped to $51 a share. In retrospect the cost of safety seemed cheap. To an ideologue, this was proof that unrestricted capitalism worked. But ideology failed to consider the moral cost of the the 29 dead and the many more scared survivors.

To escape the public outrage, George Browne left the country, living in Europe for a year. But he never altered in his views or his willingness to make them known. He even wrote letters to the London Times, correcting British politicians in their thinking. And when he came home to Boston he became a consultant for other corporations, always an advocate for the wealthy against what he termed “the vicious caprices of the populace”. In 1881 he moved to Washington, D.C., and lobbied for railroads and his vision of capitalism. He died there on April 25, 1895, at the age of 73.

By then the Eastern Railroad had been gobbled up by its competitor, The Boston and Maine. That is the nature of capitalism - its strength and its sin – at its core, it is cannibalism.

- 30 -

THE LIBERTARIAN HERO

I wish the average libertarian could meet Jay Gould, because he was unfettered capitalism in the flesh, “the human incarnation of avarice,” as one minister described him, the Mephistopheles of Wall Street, the robber baron par excellence, “prince of the railroad schemers”, annd the man within whom all the theories of the libertarians about capitalism and freedom met the reality of human nature, and got the tar beat out of it.

He was a “…short, thin man with cold black eyes, a narrow face and, in his maturity, a “full black beard”. Born into poverty, his mother was active in the Methodist Church until her death, when Jay was 10 years old. When he was seventeen, Jay apprenticed himself to a surveyor, Oliver Diston, at the salary of $10 a month. When Jay started issuing his own maps for sale, Diston sued. Jay’s attorney, T. R. Westbrook, managed to have the lawsuit dismissed, but, as one biographer noted, from that day forward, “…there was scarcely a day during his whole life that he did not have some litigation on his hands.”

His map business made Jay $5, 000, which he invested with Zadock Pratt, a Manhattan leather merchant. Smothering Mr. Pratt in adoration, the 21 year old Jay proposed to write the older man’s biography. That project drew the pair into a partnership in a new leather tannery south of Scranton, Pennsylvania. With Pratt’s money Jay built an entire company town, which he named “Gouldborough”. He wrote Pratt sycophantic letters, in one describing the organizing meeting for the new community. “Three hearty cheers were proposed for the Hon(erable) Zadock Pratt…This is certainly a memorandum worthy of note in your biography, of the gratitude and esteem which Americans hold your enterprising history.” What Jay did not explain is why the new town was named after him, and not Mr. Pratt.  However Mr. Pratt, who knew a lot more about the tanning business than young Jay, had begun to see through the fog of compliments.

Pratt (above) showed up at the plant unannounced in the summer of 1858 to go over the books, and discovered them to be a confusing mess -  showing unauthorized risky investments and a private bank which Jay had established in Stroudsburg, apparently with company funds, but without the company sharing equally in any profits. However, Jay had anticipated this, and had already lined up a richer and more docile partner. When confronted in August by Pratt, Gould stunned the man by offering to buy him out for $60,000. Pratt quickly accepted. The cash for the buyout had come from Jay’s new partner, Charles Lessup.

But it wasn’t long before Lessup began to suspect he was being had, and by the fall of 1859 Lessup was panicked by the commitments Jay (above) was making in his name. On October 6, 1859, facing financial ruin, Charles Lessup shot himself. Lessup’s daughters bitterly demanded Jay repay them for their father’s investment, and Jay countered with an offer of a payment of $10,000 a year for six years. He had, of course, neglected to include any interest during the five year delay. Unfortunately for Jay, the families’ lawyers caught the omission. Still, in the early months of 1860, it became clear that Jay was hiding assets from the family.

Lawyers and 40 deputized men were dispatched to the tannery (above) on Tuesday morning, March 13, 1860. They flashed the legal papers, ushered the workers out and padlocked the doors. They held the place for a little over six hours, until Jay returned from New York. Just past noon some 200 men, covinced by Jay they were defending economic freedom in America, stormed the building with axes, muskets and rifles. Four men were shot, others were badly beaten, and according to the New York Herald, “…those who did not escape were violently flung from the windows and doors…” As Jay would later boast, ““I can hire one-half of the working class to kill the other half.” The courts would eventually throw Jay Gould out of the tannery, but by then he had shifted his operations to a place more suited to his nature; the unregulated economic free-for-all that was Wall Street.

While North and South battled over slavery, Jay Gould formed his own brokerage firm, Smith, Gould and Martin, and made the acquaintance of James “Big Jim” Fisk, who had made his fortune smuggling southern cotton through the Federal armies and selling Confederate War Bonds. And even while brave men died by their tens of thousands, this pair joined Daniel Drew, director of the Erie Railroad, in their own, private war.

Their enemy was Cornelius Vanderbilt (above) who owned every railroad in the east except the Erie. Naturally, “The Commodore”, as Vanderbilt liked to be called, was seeking a monopoly, so he could charge whatever freight rates he wanted, and he began to buy stock in the Erie. Sensing blood in the water, Jay and friends printed up 100,000 common shares of Erie stock, which The Commodore promptly bought, and which the board of the Erie – Drew, Fisk and Jay Gould – immediately declared to be worthless.

Bilked out of $7 million, Vanderbilt filed legal papers to examine the Erie’s books. Jay and friends grabbed the company records and retreated to New Jersey, where they re-incorporated. Vanderbilt then had arrest warrants issued for all three men. And since New York law could not touch them, the Commodore began to assemble ships and men to invade New Jersey, all by himself. While the Erie Board prepared to receive the invaders, Jay managed to slide a bill through the New York State assembly making the issuing of worthless stock retroactively, legal.

This slight of hand was achieved by the simple expedient of giving William “Boss” Tweed, the head of political graft in New York, a seat on the Erie board. That brought the Erie War to a temporary end. And if you are feeling sorry for the Commodore, remember that Cornelius himself once said, “Law, what do I care about the law? Ain't I got the power?" Another libertarian hero.

With the Commodore’s cash, and further fortified by looting the Erie’s assets, Jay, Fisk and Drew began their own complicated scheme to raise freight rates on the Erie Railroad. In 1869 they began to hoard gold, because raising the price of gold would raise the price of wheat, which would allow them to raise the freight rates they charged farmers for shipping the wheat. As insurance the trio took on another partner, Abel R. Corbin, who happened to be President Grant’s brother-in law. That gave the appearance that “the fix” was in, and other investors jumped on the bandwageron. The price of gold skyrocketed.

When Grant learned about the manipulations, he immediately ordered the U.S. Treasury to sell $4 million in gold. The sudden influx hit the market like a bomb, on September 24, 1869, when gold dropped 30%. The date would henceforth be known as “Black Friday” (at least until October of 1929). Thousands of investors were wiped out, including Abel Corbin, and an angry mob swarmed the Gould’s brokerage offices, smashing the furnishings and chanting “Who killed Charles Lessup?” Of course the trio of Gould, Fisk and Drew, walked away from the wreckage with an $11 million profit.

Daniel Drew was to be Jay’s next victim. In 1870 Fisk and Gould secretly sold their shares in the Erie to the Commodore for $5 million. The deal gave Vanderbilt his monopoly, but it also revealed that the Erie was bankrupt. And it left Daniel Drew, abandoned by his partners, out $1.5 million. He would die flat broke nine years later, just one more partner and one more victim of Jay Gould.

Big Jim Fisk was saved from a similar fate when, in 1871, a competitor for a woman shot him to death in a New York Hotel. After that Jay was reduced to stealing from lesser partners, such as Major Abin A. Selover, who actually considered himself a friend of Gould’s. It was Selover who introduced Jay to a California friend of his, James R. Keene. After Keene and Selover had both been battered by Gould in a contest for control of Western Union, Jay and Selover happened to meet on the street one day. Jay tried to walk away, but for once in his life, Jay Gould was caught.

Selover grabbed Jay be the collar and shouted, “I’ll teach you to tell me lies!” The six foot tall Selover then threw Jay to the ground, and then yanked him up again by one hand, dangling him above the stairwell of a below-street level barbershop. With his free arm Selover began slapping the Mephistopheles of Wall Street and shouting, “Gould, you are a damn liar!” When Selover finally let go, Gould dropped 8 feet to the stairs. A stock broker the next day quipped, “It was characteristic of Mr. Gould that he landed on his feet.”

Overnight, Abin Selover became the most popular man in New York City. Jay Gould was wise enough not to press charges, since no jury could be expected to convict anyone of assaulting Jay Gould. Henceforth, Jay never went out without a body guard. He began to describe himself as the “most hated man in New York”, but he never changed his ways. Selover went broke, as did Keene. However, when he died in 1892, Jay Gould was the ninth richest man in America, worth about $77 million. He died a hero only to those who never did business with him. Gould scoffed at the idea that Wall Street should be regulated. “People will deal in chance….Would you not, if you stopped it, promote gambling?”

It was and is a philosophy which fails to see an advantage to drawing a line between gambling and investing. It is the philosophy of libertarianism. It is the philosophy of greed. It was the philosophy of Jay Gould.

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