HISTORY OF THE GREAT AMERICAN FORTUNESCHAPTER IX
THE RISE OF THE GOULD FORTUNE
The greater part of this commanding fortune was originally heaped up, as was that of Commodore Vanderbilt, in about fifteen years, and at approximately the same time. One of the most powerful fortunes in the United States, it now controls, or has exercised a dominant share of the control, over more than 18,000 miles of railway, the total ownership of which is represented by considerably more than a billion dollars in stocks and bonds. The Gould fortune is also either openly or covertly paramount in many telegraph, transatlantic cable, mining, land and industrial corporations.
Its precise proportions no one knows except the Gould family itself. That it reaches many hundreds of millions of dollars is fairly obvious, although what is its exact figure is a matter not to be easily ascertained. In the flux of present economic conditions, which, so far as the control of the resources of the United States is concerned, have simmered down to desperate combats between individual magnates, or contesting sets of magnates, the proportions of great fortunes, especially those based upon railroads and industries, constantly tend to vary.
In the years 1908 and 1909 the Gould fortune, if report be true, was somewhat diminished by the onslaughts of that catapultic railroad baron, E.H. Harriman, who unceremoniously seized a share of the voting control of some of the railroad systems long controlled by the Goulds. Despite this reported loss, the Gould fortune is an active, aggressive and immense one, vested with the most extensive power, and embracing hundreds of millions of dollars in cash, land, palaces, or profit-producing property in the form of bonds and stocks. Its influence and ramifications, like those of the Vanderbilt and of other huge fortunes, penetrate directly or indirectly into every inhabited part of the United States, and into Mexico and other foreign countries.
JAY GOULDS BOYHOOD.
The founder of this fortune was Jay Gould, father of the present holding generation. He was the son of a farmer in Delaware County, New York, and was born in 1836. As a child his lot was to do various chores on his fathers farm. In driving the cows he had to go barefoot, perforce, by reason of poverty, and often thistles bruised his feet a trial which seems to have left such a poignant and indelible impression upon his mind that when testifying before a United States Senate investigating committee forty years later he pathetically spoke of it with a reminiscent quivering. His father was, indeed, so poor that he could not afford to let him go to the public school. The lad, however, made an arrangement with a blacksmith by which he received board in return for certain clerical services. These did not interfere with his attending school. When fifteen, he became a clerk in a country store, a task which, he related, kept him at work from six oclock in the morning until ten oclock at night. It is further related that by getting up at three oclock in the morning and studying mathematics for three years, he learned the rudiments of surveying.
According to Goulds own story, an engineer who was making a map of Ulster County hired him as an assistant at twenty dollars a month and found. This engagement somehow (we are not informed how) turned out unsatisfactorily. Gould was forced to support himself by making noon marks for the farmers. To two other young men who had worked with him upon the map of Ulster County, Gould (as narrated by himself) sold his interest for $500, and with this sum as capital he proceeded to make maps of Albany and Delaware counties. These maps, if we may believe his own statement, he sold for $5,000.
HE GOES INTO THE TANNING BUSINESS.
Subsequently Gould went into the tanning business in Pennsylvania with Zadoc Pratt, a New York merchant, politician and Congressman of a certain degree of note at the time.1 Pratt, it seems, was impressed by young Goulds energy, skill and smooth talk, and supplied the necessary capital of $120,000. Gould, as the phrase goes, was an excellent bluff ; and so dexterously did he manipulate and hoodwink the old man that it was quite some time before Pratt realized what was being done. Finally, becoming suspicious of where the profits from the Gouldsboro tannery (named after Gould) were going, Pratt determined upon some overhauling and investigating.
Gould was alert in forestalling this move. During his visits to New York City, he had become acquainted with Charles M. Leupp, a rich leather merchant. Gould prevailed upon Leupp to buy out Pratts interest. When Gould returned to the tannery, he found that Pratt had been analyzing the ledger. A scene followed, and Pratt demanded that Gould buy or sell the plant. Gould was ready, and offered him $60,000, which was accepted. Immediately Gould drew upon Leupp for the money. Leupp likewise became suspicious after a time, and from the ascertained facts, had the best of grounds for becoming so. The sequel was a tragic one. One night, in the panic of 1857, Leupp shot and killed himself in his fine mansion at Madison avenue and Twenty-fifth street. His suicide caused a considerable stir in New York City.2
HE BUYS RAILROAD BONDS WITH HIS STEALINGS.
Three years later, in 1860, Gould set up as a leather merchant in New York City ; the New York directory for that year contains this entry : Jay Gould, leather merchant, 39 Spruce street ; house Newark. For several years after this his name did not appear in the directory.
He had been, however, edging his way into the railroad business with the sums that he had stolen from Pratt and Leupp. At the very time that Leupp committed suicide, Gould was buying the first mortgage bonds of the Rutland and Washington Railroad a small line, sixty-two miles long, running from Troy, New York, to Rutland, Vermont. These bonds, which he purchased for ten cents on the dollar, gave him control of this bankrupt railroad. He hired men of managerial ability, had them improve the railroad, and he then consolidated it with other small railroads, the stock of which he had bought in.
With the passing of the panic of 1857, and with the incoming of the stupendous corruption of the Civil War period, Gould was able to manipulate his bonds and stock until they reached a high figure. With a part of his profits from his speculation in the bonds of the Rutland and Washington Railroad, he bought enough stock of the Cleveland and Pittsburg Railroad to give him control of that line. This he manipulated until its price greatly rose, when he sold the line to the Pennsylvania Railroad Company. In these transactions there were tortuous substrata of methods, of which little to-day can be learned, except for the most part what Gould himself testified to in 1883, which testimony he took pains to make as favorable to his past as possible.
His career from 1867 onward stood out in the fullest prominence ; a multitude of official reports and investigations and court records contribute a translucent record. He became invested with a sinister distinction as the most cold-blooded corruptionist, spoliator, and financial pirate of his time ; and so thoroughly did he earn this reputation that to the end of his days it confronted him at every step, and survived to become the standing reproach and terror of his descendants. For nearly a half century the very name of Jay Gould has been a persisting jeer and by-word, an object of popular contumely and hatred, the signification of every foul and base crime by which greed triumphs.
WHY THIS BIASED VIEW OF GOULDS CAREER ?
Yet, it may well be asked now, even if for the first time, why has Jay Gould been plucked out as a special object of opprobrium ? What curious, erratic, unstable judgment is this that selects this one man as the scapegoat of commercial society, while deferentially allowing his business contemporaries the fullest measure of integrity and respectability ?
Monotonous echoes of one another, devoid of understanding, writer has followed writer in harping undiscriminatingly upon Jay Goulds crimes. His career has been presented in the most forbidding colors ; and in order to show that he was an abnormal exception, and not a familiar type, his methods have been darkly contrasted with those of such illustrious capitalists as the Astors, the Vanderbilts, and others.
Thus, has the misinformed thing called public opinion been shaped by these scribbling purveyors of fables ; and this public opinion has been taught to look upon Jay Goulds career as an exotic, horrible example, having nothing in common with the careers of other founders of large fortunes. The same generation habitually addicted to cursing the memory of Jay Gould, and taunting his children and grandchildren with the reminders of his thefts, speaks with traditional respect of the wealth of such families as the Astors and the Vanderbilts. Yet the cold truth is, as has been copiously proved, John Jacob Astor was proportionately as notorious a swindler in his day as Gould was in his ; and as for Commodore Vanderbilt, he had already made blackmailing on a large scale a safe art before Gould was out of his teens.
Gould has been impeached as one of the most audacious and successful buccaneers of modern times. Without doubt he was so ; a freebooter who, if he could not appropriate millions, would filch thousands ; a pitiless human carnivore, glutting on the blood of his numberless victims ; a gambler destitute of the usual gamblers code of fairness in abiding by the rules ; an incarnate fiend of a Machiavelli in his calculations, his schemes and ambushes, his plots and counterplots.
But it was only in degree, and not at all in kind, that he differed from the general run of successful wealth builders. The Vanderbilts committed thefts of as great an enormity as he, but they gradually managed to weave around themselves an exterior of protective respectability. All sections of the capitalist class, in so fiercely reviling Gould, reminded one of the thief, who, to divert attention from himself, joins with the pursuing crowd in loudly shouting, Stop thief ! We shall presently see whether this comparison is an exaggerated one or not.
THE TEACHINGS OF HIS ENVIRONMENT.
To understand the incentives and methods of Goulds career, it is necessary to know the endemic environment in which he grew up and flourished, and its standards and spirit. He, like others of his stamp, were, in a great measure, but products of the times ; and it is not the man so much as the times that are of paramount interest, for it is they which supply the explanatory key. In preceding chapters repeated insights have been given into the methods not merely of one phase, but of all phases, of capitalist formulas and processes. At the outset, however, in order to approach impartially this narrative of the Gould fortune, and to get a clear perception of the dominant forces of his generation, a further presentation of the business-class methods of that day will be given.
As a young man what did Jay Gould see ? He saw, in the first place, that society, as it was organized, had neither patience nor compassion for the very poverty its grotesque system created. Prate its higher classes might of the blessings of poverty ; and they might spread broadcast their prolix homilies on the virtues of a useful life, rounded by an honorable poverty. But all of these teachings were, in one sense, chatter and nonsense ; the very classes which so unctuously preached them were those who most strained themselves to acquire all of the wealth that they possibly could. In another sense, these teachings proved an effective agency in the infusing into the minds of the masses of established habits of thought calculated to render them easy and unresisting victims to the rapacity of their despoilers.
From these upper classes proceeded the dictation of laws ; and the laws showed (as they do now) what the real, unvarnished attitude of these fine, exhorting moralists was towards the poor. Poverty was virtually prescribed as a crime. The impoverished were regarded in law as paupers, and so repugnant a term of odium was that of pauper, so humilating its significance and treatment, that great numbers of the destitute preferred to suffer and die in want and silence rather than avail themselves of the scanty and mortifying public aid obtainable only by acknowledging themselves paupers.
Sickness, disability, old age, and even normal life, in poverty were a terrifying prospect. The one sure way of escaping it was to get and hold wealth. The only guarantee of security was wealth, provided its possessor could keep it intact against the maraudings of his own class. Every influence conspired to drive men into making desperate attempts to break away from the stigma and thraldom of poverty, and gain economic independence and social prestige by the ownership of wealth.
But how was this wealth to be obtained ? Here another set of influences combined with the first set to suppress or shatter whatever doubts, reluctance or scruples the aspirant might have. The acquisitive young man soon saw that toiling for the profit of others brought nothing but poverty to himself ; perhaps at the most, some small savings that were constantly endangered. To get wealth he must not only exploit his fellow men, he found, but he must not be squeamish in his methods. This lesson was powerfully and energetically taught on every hand by the whole capitalist class.
Conventional writers have descanted with a show of great indignation upon Goulds bribing of legislative bodies and upon his cheatings and swindlings. Without adverting again to the corruption, reaching far back into the centuries, existing before his time, we shall simply describe some of the conditions that as a young man he witnessed or which were prevalent synchronously with his youth.
Whatever sphere of business was investigated, there it was at once discovered that wealth was being amassed, not only by fraudulent methods, but by methods often a positive peril to human life itself. Whether large or small trader, these methods were the same, varying only in degree.
ALL BUSINESS REEKED WITH FRAUD.
A Congressional committee, probing, in 1847-48, into frauds in the sale of drugs found that there was scarcely a wholesale or retail druggist who was not consciously selling spurious drugs which were a menace to human life. Dr. M.J. Bailey, United States Examiner of Drugs at the New York Custom House, was one of the many expert witnesses who testified. More than one-half of many of the most important chemical and medicinal preparations, Dr. Bailey stated, together with large quantities of crude drugs, come to us so much adulterated as to render them not only worthless as a medicine, but often dangerous. These drugs were sold throughout the United States at high prices.3 There is not a single record of any criminal action pressed against those who profited from selling this poisonous stuff.
The manufacture and sale of patent medicines were attended with the grossest frauds. At that time, to a much greater extent than now, the newspapers profited more (comparatively) from the publication of patent medicine advertisements ; and even after a Congressional committee had fully investigated and exposed the nature of these nostrums, the newspapers continued publishing the alluring and fraudulent advertisements.
After showing at great length the deceptive and dangerous ingredients used in a large number of patent medicicines, the Committee on the judiciary of the House of Representatives went on in its report of February 6, 1849 : The public prints, without exception, published these promises and commendations. The annual [advertising] fee for publishing Brandeths pills has amounted to $100,000. Morrison paid more than twice as much for the advertisement of his never-dying hygiene. The committee described how Morrisons nostrums often contained powerful poisons, and then continued : Morrison is forgotten, and Brandeth is on the high road to the same distinction. T.W. Conway, from the lowest obscurity, became worth millions from the sale of his nostrums, and rode in triumph through the streets of Boston in his coach and six. A stable boy in New York was enrolled among the wealthiest in Philadelphia by the sale of a panacea which contains both mercury and arsenic. Innumerable similar cases can be adduced.4 Not a few multimillionaire families of to-day derive their wealth from the enormous profits made by their fathers and grandfathers from the manufacture and sale of these poisonous medicines.
SUCCESS AS GOULD LEARNED IT.
The frauds among merchants and manufacturers reached far more comprehensive and permeating proportions. In periods of peace these fraudulent methods were nauseating enough, but in times of war they were inexpressibly repellant and ghastly. During the Mexican War the Northern shoe manufacturers dumped upon the army shoes which were of so inferior a make that they could not be sold in the private market, and these shoes were found to be so absolutely worthless that it is on record that the American army in Mexico threw them away upon the sands in disgust. But it was during the Civil War that Northern capitalists of every kind coined fortunes from the national disasters, and from the blood of the very armies fighting for their interests.
In the chapters on the Vanderbilt fortune, it has been shown how Commodore Vanderbilt and other shipping merchants fraudulently sold or leased to the Government for exorbitant sums, ships for the transportation of soldiers ships so decayed or otherwise unseaworthy, that they had to be condemned. In those chapters such facts were given as applied mainly to Vanderbilt ; in truth, however, they constituted but a mere part of the gory narrative. While Vanderbilt, as the Government agent, was leasing or buying rotten ships, and making millions of dollars in loot by collusion, the most conspicuous and respectable shipping merchants of the time were unloading their old hulks upon the Government at extortionate prices.
One of the most ultra-respectable merchants of the time, ranked of high commercial standing and austere social prestige, was, for instance, Marshall O. Roberts. This was the identical Roberts so deeply involved in the great mail-subsidy frauds. This was also the same sanctimonious Roberts, who, as has been brought out in the chapters on the Astor fortune, joined with John Jacob Astor and others in signing a testimonial certifying to the honesty of the Tweed Regime. A select Congressional committee, inquiring into Government contracts in 1862-63, brought forth volumes of facts that amazed and sickened a committee accustomed to ordinary political corruption. Here is a sample of the testimony : Samuel Churchman, a Government vessel expert engaged by Welles, Secretary of the Navy, told in detail how Roberts and other merchants and capitalists had contrived to palm off rotten ships on the Government ; and, in his further examination on January 3, 1863, Churchman was asked :
Q. Did Roberts sell or charter any other boats to the Government ?
A. Yes, sir. He sold the Winfield Scott and the Union to the Government.
Q. For how much ?
A. One hundred thousand dollars each, and one was totally lost and the other condemned a few days after they went to sea.5
In the course of later inquiries in the same examination, Churchman testified that the Government had been cheated out of at least $25,000,000 in the chartering and purchase of vessels, and that he based his judgment upon the chartered and purchased vessels I am acquainted with, and the enormous sums wasted there to my certain knowledge.6 This $25,000,000 swindled from the Government in that one item of ships alone formed the basis of many a present plutocratic fortune.
FRAUD UNDERLIES RESPECTABILITY.
But this was not by any means the only schooling Gould received from the respectable business element. It can be said advisedly that there was not a single avenue of business in which the most shameless frauds were not committed upon both Government and people. The importers and manufacturers of arms scoured Europe to buy up worthless arms, and then cheated the Government out of millions of dollars in supplying those guns and other ordnance, all notoriously unfit for use. A large proportion of our troops, reported a Congressional Commission in 1862, are armed with guns of very inferior quality, and tens of thousands of the refuse arms of Europe are at this moment in our arsenals, and thousands more are still to arrive, all unfit.7 A Congressional committee appointed, in 1862, to inquire into the connection between Government employees on the one hand, and banks and contractors on the other, established the fact conclusively, that the contractors regularly bribed Government inspectors in order to have their spurious wares accepted.8
In fact, the ramifications of the prevalent frauds were so extensive that a number of Congressional committees had to be appointed at the same time to carry on an adequate investigation ; and even after long inquiries, it was admitted that but the surface had been scratched.
During the Civil War, prominent merchants, with eloquent outbursts of patriotism, formed union defense committees in various Northern cities, and solicited contributions of money and commodities to carry on the war. It was disclosed before the Congressional investigating committees that not only did the leading members of these union defense committees turn their patriotism to thrifty account in getting contracts, but that they engaged in great swindles upon the Government in the process.
Thus, Marcellus Hartley, a conspicuous dealer in military goods, and the founder of a multimillionaire fortune,9 admitted that he had sold a large consignment of Halls carbines to a member of the New York Union Defense Committee. In a sudden burst of contrition he went on, I think the worst thing this Government has been swindled upon has been these confounded Halls carbines ; they have been elevated in price to $22.50, I think.10 He could have accurately added that these carbines were absolutely dangerous ; it was found that their mechanism was so faulty that they would shoot off the thumbs of the very soldiers using them. Hartley was one of the importers who brought over the refuse arms of Europe, and sold them to the Government at extortionate prices. He owned up to having contracts with various of the States (as distinguished from the National Government) for $600,000 worth of these worthless arms.11 That corruscating patriot and philanthropic multimillionaire of these present times, J. Pierporit Morgan, was, as we shall see, profiting during the Civil War from the sale of Halls carbines to the Government.
One of the Congressional committees, investigating contracts for other army material and provisions, found the fullest evidences of gigantic frauds. Exorbitant prices were extorted for tents which were valueless ; these tents, it appeared, were made from cheap or old farmers drill, regarded by the trade as truck. Soldiers testified that they could better keep dry out of them than under.12 Great frauds were perpetrated in passing goods into the arsenals. One manufacturer in particular, Charles C. Roberts, was awarded a contract for 50,000 haversacks and 50,000 knapsacks. Every one of these, an expert testified, was a fraud upon the Government, for they were not linen ; they were shoddy.13 A Congressional committee found that the provisions supplied by contractors were either deleterious or useless. Captain Beckwith, a commissary of subsistence, testified that the coffee was absolutely good for nothing and is worthless. It is of no use to the Government.
Q. Is the coffee at all merchantable ?
A. It is not.
Q. Describe that coffee as nearly as you can.
A. It seems to be a compound of roasted peas, of licorice, and a variety of other substances, with just coffee enough to give it a taste and aroma of coffee.14
This committee extracted much further evidence showing how all other varieties of provisions were of the very worst quality, and how rotten and condemned blankets in enormous quantities were passed into the army by bribing the inspectors. It disclosed, at great length, how the railroads in their schedule of freight rates were extorting from the Government fifty per cent. more than from private parties.15 Don Cameron, leader of the corrupt Pennsylvania political machine, and a railroad manipulator,16 was at that time Secretary of War. Whom did he appoint as the supreme official in charge of railroad transportation ? None other than Thomas A. Scott, the vice-president of the Pennsylvania Railroad. Scott, it may be said, was another capitalist whose work has so often been fulsomely described as being that of a remarkable constructive ability. The ability he displayed during the Civil War was unmistakable. With his collusion the railroads extorted right and left. The committee described how the profits of the railroads after his appointment rose fully fifty per cent. in one year, and how quartermasters and others were bribed to obtain the transportation of regiments. This, stated the committee, illustrates the immense and unnecessary profits which was spirited from the Government and secured to the railroads by the schedule fixed by the vice-president of the Pennsylvania Central under the auspices of Mr. Cameron.17
These many millions of dollars extorted in frauds came, reported the committee, out of the impoverished and depleted Treasury of the United States, at a time when her every energy and resources were taxed to the utmost to maintain the war.18
These are but a few facts of the glaring fraud and corruption prevailing in every line of mercantile and financial business. Great and audacious as Goulds thefts were later, they could not be put on the same indescribably low plane as those committed during the Civil War by men most of whom succeeded in becoming noted for their fine respectability and solid fortunes. So many momentous events were taking place during the Civil War, that amid all the preparations, the battles and excitement, those frauds did not arouse that general gravity of public attention which, at any other time, would have inevitably resulted. Consequently, the men who perpetrated them contrived to hide under cover of the more absorbing great events of those years. Gould committed his thefts at a period when the public had little else to preoccupy its attention ; hence they loomed up in the popular mind as correspondingly large and important.
A SPECIMEN OF GOULDS TUITION.
At the very dawn of his career in 1857, as a railroad owner, Gould had the opportunity of securing valuable and gratuitous instruction in the ways by which railroad projects and land grants were being bribed through Congress. He was then only twenty-one years old, ready to learn, but, of course, without experience in dealing with legislative bodies. But the older capitalists, veterans at bribing, who for years had been corrupting Congress and the Legislatures, supplied him with the necessary information.
Not voluntarily did they do it ; their greatest ally was concealment ; but one crowd of them had too baldly bribed Congress to vote for an act giving an enormous land grant in Iowa, Minnesota and other states, to the DesMoines Navigation and Railroad Company. The facts unearthed must have been a lasting lesson to Gould as to how things were done in the exalted halls of Congress. The charges made an ugly stir throughout the United States, and the House of Representatives, in self defense, had to appoint a special committee to investigate itself.
This committee made a remarkable and unusual report. Ordinarily in charges of corruption, investigating committees were accustomed to reporting innocently that while it might have been true that corruption was used, yet they could find no evidence that members had received bribes ; almost invariably such committees put the blame, and the full measure of their futile excoriations, on the iniquitous lobbyists. But this particular committee, surprisingly enough, handed in no such flaccid, whitewashing report. It found conclusively that corrupt combinations of members of Congress did exist ; and it recommended the expulsion of four members whom it decreed guilty of receiving either money or land in exchange for their votes. One of these four expelled members, Orasmus B. Matteson, it appeared, was a leader of a corrupt combination ; the committee branded him as having arranged with the railroad capitalists to use a large sum of money [$100,000] and other valuable considerations corruptly.19
But it was essentially during the Civil War that Gould received his completest tuition in the great art of seizing property and privileges by bribing legislative bodies. While many sections of the capitalist class were, as we have seen, swindling manifold hundreds of millions of dollars from a hard-pressed country, and reaping fortunes by exploiting the lives of the very defenders of their interests, other sections, equally mouthy with patriotism, were sneaking through Congress and the Legislatures act after act, further legalizing stupendous thefts.
PATRIOTISM AT FIFTY PER CENT.
Some of these acts, demanded by the banking interests, made the people of the United States pay an almost unbelievable usurious interest for loans. These banking statutes were so worded that nominally the interest did not appear high ; in reality, however, by various devices, the bankers, both national and international, were often able to extort from twenty to fifty, and often one hundred per cent., in interest, and this on money which had at some time or somehow been squeezed out of exploited peoples in the United States or elsewhere.
By these laws the bankers were allowed to get an annual payment from the Government of six per cent. interest in gold on the Government bonds that they bought. They could then deposit those same bonds with the Government, and issue their own bank notes against ninety per cent. of the bonds deposited. They drew interest from the Government on the deposited bonds, and at the time charged borrowers an exorbitant rate of interest for the use of the bank notes, which passed as currency.
It was by this system of double interest that they were able to sweep into their coffers hundreds upon hundreds of millions of dollars, not a dollar of which did they earn, and all of which were sweated out of the adversities of the people of the United States. From 1863 to 1878 alone the Government paid out to national banks as interest on bonds the enormous sum of $252,837,556.77.20 On the other hand, the banks were entirely relieved from paying taxes ; they secured the passage of a law exempting Government bonds from taxation. Armies were being slaughtered and legions of homes desolated, but it was a rich and safe time for the bankers ; a very common occurrence was it for banks to declare dividends of twenty, forty, and sometimes one hundred, per cent.
It was also during the stress of this Civil War period, when the working and professional population of the nation was fighting on the battlefield, or being taxed heavily to support their brothers in arms, that the capitalists who later turned up as owners of various Pacific railroad lines were bribing through Congress acts giving them the most comprehensive perpetual privileges and great grants of money and of land.
Gould saw how all of the others of the wealth seekers were getting their fortunes ; and the methods that he now plunged into use were but in keeping with theirs, a little bolder and more brutally frank, perhaps, but nevertheless nothing more than a repetition of what had long been going on in the entire sphere of capitalism.
1 Pratt was regarded as one of the leading agricultural experts of his day. His farm of three hundred and sixty-five acres, at Prattsville, New York, was reputed to be a model. A paper of his, descriptive of his farm, and containing woodcut engravings, may be found in U.S. Senate Documents, Second Session, Thirty-seventh Congress, 1861-62, v:411-415.
2 Although later in Goulds career it was freely charged that he had been the cause of Leupps suicide, no facts were officially brought out to prove the charge. The coroners jury found that Leupp had been suffering from melancholia, superinduced, doubtless, by business reverses.
Even Houghton, however, in his flamboyantly laudatory work describes Goulds cheating of Pratt and Leupp, and Leupps suicide. According to Houghton, Leupps friends ascribed the cause of the act to Goulds treachery. See Kings of Fortune, 265-266.
3 Report of Select Committee on the Importation of Drugs. House Reports, Thirtieth Congress, First Session, 1847-48, Report No. 664:9. In a previous chapter, other extracts from this report have been given showing in detail what many of these fraudulent practices were.
4 Report No. 52. Reports of Committees, Thirtieth Congress, Second Sess., I:31.
5 Report of Select Committee to Inquire into Government Contracts, House Reports, Thirty-seventh Congress, Third Session, 1862-63, Report No. 49:95.
6 Ibid., 95-97.
7 House Reports of Committees, Thirty-seventh Congress, Second Session, 1861-62, vol. ii, Report No. 2:lxxix.
8 House Reports, Thirty-seventh Congress, Second Session, 1862-63, Report No. 64. The Chairman of this committee, Representative C.H. Van Wyck, of New York, in reporting to the House of Representatives on February 23, 1863, made these opening remarks :
In the early history of the war it was claimed that frauds and peculations were unavoidable ; that the cupidity of the avaricious would take advantage of the necessities of the nation, and for a time must revel and grow rich amidst the groans and griefs of the people ; that pressing wants must yield to the extortion of the base ; that when the capital was threatened, railroad communication cut off, the most exorbitant prices could safely be demanded for steam and sailing vessels ; that when our arsenals had been robbed of arms, gold could not be weighed against cannon and muskets ; that the Government must be excused if it suffered itself to be overreached. Yet, after the lapse of two years, we find the same system of extortion prevailing, and robbery has grown more unblushing in its exactions as it feels secure in its immunity from punishment, and that species of fraud which shocked the nation in the spring of 1861 has been increasing. The fitting out of each expedition by water as well as land is but a refinement upon the extortion and immense profits which preceded it. The freedom from punishment by which the first greedy and rapacious horde were suffered to run at large with ill-gotten gains seems to have demoralized too many of those who deal with the Government.Appendix to The Congressional Globe, Third Session, Thirty-seventh Congress, 1862-63, Part ii: 117.
9 When Marcellus Hartley died in 1902, his personal property alone was appraised at $11,000,000. His entire fortune was said to approximate $50,000,000. His chief heir, Marcellus Hartley Dodge, a grandson, married, in 1907, Edith Geraldine Rockefeller, one of the richest heiresses in the world. Hartley was the principal owner of large cartridge, gun and other factories.
10 House Report No. 2, etc., 1861-62, vol. ii :200-204.
12 House Report No. 64, etc., 1862-63:6.
14 House Report No. 2, etc., 1861-62, ii: 1459.
15 House Report No. 2, etc., 1861-62, xxix.
16 He had been involved in at least one scandal investigated by a Pennsylvania Legislative Committee, and also in several dubious railroad transactions in Maryland.
17 House Report No. 2, etc., 1861-02, xix. The Pennsylvania Railroad, for example, made in 1862 the sum of $1,350,237.79 more in profits than it did in the preceding year.
18 Ibid., 4.
19 Reports of Committees, House of Representatives, Thirty-fourth Congress, Third Session, 1856-57. Report No. 243, Vol. iii. In subsequent chapters many further details are given of the corruption during this period.
20 House Documents, Forty-fifth Congress, Second Session, Ex. Document No. 34, Vol. xiv., containing the reply of Secretary of the Treasury Sherman, in answer to a resolution of the House of Representatives.