Gabelli100 | Feb 04, 2021 | Gabelli School of Business
Villain or Victor? Revisiting Jay Gould and the Union Pacific Railroad
Late 19th-century American railroad magnate Jason “Jay” Gould has been called the “Mephistopheles of Wall Street,” despised for his unscrupulous investing and trading tactics. However, some of the financier’s business practices, according to Gabelli Center for Global Security Analysis fellow Joseph Calandro Jr., were “misunderstood and underappreciated” calling for reevaluation, not revision.
In a Centennial Virtual Speaker Series event sponsored by the Gabelli Center, the Museum of American Finance, and the CFA Society New York, Calandro addressed the state of the Union Pacific Railroad during the panic of 1873-1880. Despite his notorious reputation for abusing the financial market, Gould’s sharp business acumen and revival of the organization serves as a reminder that successful executives can navigate crises without government bailouts.
Gould was able to restore the Union Pacific’s credit in the midst of an economic recession through tough negotiation with his creditors, innovative financing—even tackling some of the debt himself—and leveraging his relationships with a network of investors.
“Jay Gould was an absolute master of financial labyrinths, similar to Warren Buffett and George Soros today, as well as other elite investors,” Calandro said. “In contrast to both Soros and Buffett, however, Gould has been pummeled mercilessly for his use of financial complexity and obfuscation.”