The Industrial Revolution generated vast accumulations of wealth in the United States, and critics used the term robber barons to describe the new class of super-rich industrialists, as if they had intentionally imposed poverty on the rest of the country in order to enrich themselves. Some of them indeed were rascals—corrupt and exploitive—and none more so than Jay Gould. Born to a poor family as Jason Gould in Roxbury, New York, on May 27, 1836, Gould spent his early career as a clerk, a surveyor, a blacksmith, and then a leather merchant, but he took his profits and invested in railroads. In 1867, he owned enough stock to become a director of the Erie Railroad, one of the East Coast's major carriers.
Gould had little interest in running the railroad as a successful enterprise and preferred to spend his time manipulating railroad stock through what is today called insider trading. Along with Daniel Drew and James Fisk, the treasurer and a director of the Erie Railroad, respectively, Gould illegally released 100,000 new shares of Erie stock in an attempt to prevent Cornelius Vanderbilt and the New York Central Railroad from seizing the line. To avoid New York courts, Gould fled to New Jersey and opened another office. A few bribes to powerful New York legislators got him off the legal hook.
But he had not learned his lesson. He appointed Boss Tweed, the famous and corrupt head of the Tammany Hall political machine, to the Erie board of directors. They then issued more fraudulent shares, and in 1869, Gould tried and failed to corner the U.S. gold market, a ploy that triggered the Panic of 1869. A huge public outcry against Gould led to his dismissal as president of the Erie Railroad.
Gould then headed west and put his money into the Union Pacific Railroad and became a director. To boost the stock's value and the value of his own portfolio, Gould released fraudulent information on the line's profits, and in the process he made up to $10 million, selling his stock just in time. Gould then invested in the Central Pacific Railroad, the Kansas Pacific, the Denver Pacific, the Missouri Pacific, and the Wabash. By 1881, Jay Gould was a railroad czar, controlling more mileage than anybody else in the country. He also owned the Western Union Telegraph Company.
Gould's railroad empire, badly undercapitalized, came crashing down in the panic of 1884–1885, and he emerged with only the Missouri Pacific. He recovered quickly and built ownership of the Manhattan Elevated Railway. Gould spent the rest of his life doing what he had been doing for years, ruthlessly manipulating stock prices and taking advantage of the fact that the law had not yet developed prohibitions against the activities Gould specialized in. When Gould died on December 2, 1892, he had an estate worth more than $72 million and a reputation for greed and corruption that helped shape negative public perceptions of big businessmen during the Industrial Revolution.