Dark Genius of Wall Street

by Edward J Renehan Jr

  On 10 December, after Vanderbilt once again refused Gould and Fisk’s tender offer, the Erie Railroad sued Vanderbilt for breach of promise. This suit, more an attempt to embarrass than to extort money, was eventually dropped. Annoyed but also impressed by Gould, Vanderbilt about this time told a reporter that he considered the younger fellow “the smartest man in America.”6

  Shortly before December 1868, Jim Fisk had purchased a majority share in the Narragansett Steamship Company, a small firm running the steamers Providence and Bristol between Manhattan and the Massachusetts town of Fall River, on Mount Hope Bay. In connection with this enterprise, he acquired an admiral’s uniform in which he quite proudly had himself photographed. Not long after, Fisk bought Broughman’s Theater, at Fifth Avenue and Twenty-fourth Street. This he renamed the Fifth Avenue Theater and used for hosting performances by the Christy Minstrels along with various comedies and burlesques. Fisk also briefly leased the Academy of Music on Fourteenth Street, where he took a loss trying to stage grand opera. Then, in December, he talked Gould into going partners with him in acquiring Pike’s Opera House. This establishment, at the northwest corner of Twenty-third Street and Eighth Avenue, had been built that same year by one Samuel N. Pike at a cost of $1 million. Located considerably further west than most Manhattanites were accustomed to travel for their theater, the opera house had not proved profitable for Pike, who sold it to Fisk and Gould for $820,000.

  The partners purchased the building personally, renaming it the Grand Opera House and splitting the investment 50-50. The building’s upper floors included a great deal of office space, which Gould and Fisk soon refurbished in grand style, crafting a baroque palace to suit Fisk’s elaborate tastes. Eight months and $250,000 later, Gould and Fisk leased the newly decorated space to the Erie Railroad for $75,000 a year.7 “There are but few places,” wrote a reporter for the Herald after being given a tour of what the press was already calling Castle Erie, “wherein so rich a coup d’oeil could be presented as that of the main offices of the Erie Railway Company.” The Herald’s man praised the carved woodwork, the stained and cut glass of the partitions, the gilded balustrades, the splendid gas fixtures, and the “artistic frescoes” on the walls and ceilings.

  Although Gould’s personal office seems to have been simple enough, Fisk’s featured a desk raised on a dais surrounded by low chairs. The Erie suite also incorporated separate but equally elaborate dining rooms for executives and clerks, with a single kitchen and French chef supplying both. The Herald journalist took particular notice of the Erie’s enormous safe, which had cost more than $30,000 to install. “It is seven stories high,” he wrote, “each [floor] totally unconnected, and is built upon a solid foundation of granite. Rising to the very roof of the main building, this immense safe is so constructed that were the Grand Opera House to be burned to the ground, the safe would stand. It is reared within the house, but in no wise is connected to it.”8 Another observer, the writer Meade Miniegerode, described the new Erie headquarters as “the most fantastic offices ever occupied by a business corporation–a splendor of marble, and black walnut inlaid with gold, and silver name plates, and crimson hangings, and painted ceilings, and washstands decorated with nymphs and cupids.”9 The basement of Castle Erie included printing presses for new bond and stock issues. Meanwhile, Cavanagh’s Restaurant, on a diagonal at the southeast corner of the intersection, was the well-known hangout for the Erie’s recent ally and current board member, Boss Tweed.

  The theater itself remained a theater, featuring six proscenium boxes, twenty-seven boxes in the dress circle, and a total capacity of 2,600. (Removable seating allowed easy conversion into a ballroom.) The stage, the largest in Manhattan, measured seventy feet by eighty feet. The acoustics of the hall were said to be among the finest in the world. Here, in this elaborate space, Fisk soon started staging farces, musicals, and melodramas highlighting the talents of various young actresses in whom he was interested. Most notable among these was his most frequent paramour, Josie Mansfield. Fisk also installed Josie in a townhouse at 359 West Twenty-third Street, half a block from the theater in the direction of Ninth Avenue, where he spent many a night. (His own townhouse, meanwhile, stood a bit closer to Castle Erie at 313 West Twenty-third.) Fisk went on to purchase other adjacent properties, including a fine stable where the “Prince of Erie”–as reporters now called him–kept the animals charged with hauling his ornate brougham coach (“tended by four smart footmen in flamboyant liveries”) about the streets of Manhattan.10

  For all of his self-indulgence and exhibitionism, Fisk was nevertheless quietly devout about his charities. Shortly after the opening of Castle Erie, he instructed bemused police officers at the nearby precinct to send needy people to the opera house when they came begging for food, coal, or rent money. Fisk’s personal secretary saw to the handouts as part of his daily duties, the funds coming from Fisk’s own wallet rather than from Erie coffers. (Fisk also donated to a struggling black church near the Erie offices and sent five hundred dollars in answer to a plea from the Baptist Church in Brattleboro that it needed a new graveyard fence. “But what in thunder do you want with a new fence?” he inquired in the note accompanying the check. “Those that are in can’t get out; and those that are out don’t want to get in.”11) In his numerous small acts of giving, as in so many other ways, Fisk seemed the antithesis of his friend and alter ego Gould. “Jay Gould is the complement–the foil of James Fisk, Jr.,” wrote William Fowler at about this time. “He is a short, slight man, with a sable beard, a small, bright, introverted eye, and a cool, clear head. His forte is planning, and he presents the man of thought as Fisk does the man of action. . . . He is the engineer, with his hand on the engine-lever, while Fisk is the roar of the wheels, the volume of smoke from the stack, the glare of the head-light, and the screaming whistle of the locomotive.”12

  Gould tolerated the ragtag line of supplicants in the lobby of the Erie offices just as he tolerated Fisk’s other idiosyncrasies. “Gould and other staid souls of Erie,” wrote Maury Klein, “. . . trod the rich carpets of the Opera House with the disquiet of monks in a bordello. They cringed at Fisk’s unabashed pleasure seeking, at the proximity of Josie Mansfield and the champagne and poker soirees she hosted for Tweed, Barnard, and other politicos.”13 But Jay remained devoted to Fisk, who fulfilled most of the social and public relations obligations of their partnership. In all things, Fisk most often provided the public face for Gould’s machinations. Although Gould needed the men of smoke-filled rooms–functionaries such as Tweed and his cohorts–he abhorred their milieu and preferred to let Fisk handle all late-night entertaining. As well, Fisk was far better than Gould at glad-handing, befriending, carousing with, and winning the men of the press. Jay, meanwhile, retreated to his hearth and family every evening with a religious constancy.

  By early 1869, Gould’s family included not only George and Edwin, in their fifth and third years, respectively, but also a daughter named for her mother, born in June 1868. To avoid confusion, the parents began calling young Helen “Nellie” very early. It was by this name that she would always be known within the Gould family. The couple and their growing clan still lived near Union Square in the mansion of Ellie’s parents, where Jay took over a back room as his private study and library. Always devoted to books, Jay now began to collect and, unlike many such collectors, actually read antique editions of classic works. His tastes ran for the most part toward the natural sciences. He collected such volumes as Thomas Kelway’s translation of Oger Ferrier’s A Learned Astronomical Discourse, published in London in 1593.14 He also collected books on botany and spent much time with his children working in a small flower garden he cultivated in the yard behind the Miller home. (When his sister Sarah visited, she guessed at the source of Jay’s fascination with beautiful blooms when she recalled, as Jay could not, the extensive gardens their mother had once maintained around the old farmhouse in Roxbury.)

  While Vanderbilt’s New York Central enjoyed a
monopoly on passenger trains traveling in and out of Manhattan, Gould and Fisk nevertheless did their best to give Vanderbilt’s road some competition for the New York passenger trade. During the summer of 1869, just as the Erie moved into its new headquarters, the railroad commissioned two new 176-foot ferryboats, the James Fisk, Jr., and the Jay Gould, which shuttled hourly across the Hudson between the foot of West Twenty-third Street and the Erie’s pier at Jersey City, next to the Erie terminal. Passage on these glamorous and elaborate ferries was free each way for Erie ticketholders. Once they debarked in Manhattan, passengers had the option of free carriage transport up West Twenty-third Street, past the Grand Opera House and on up to the Fifth Avenue Hotel at Madison Square. Erie ticketholders could likewise catch a free ride down to the piers from the centrally located hotel. (In the 1920s, George Gould would recall being taken by his father on Sundays for round-trips on the Erie ferry. As each vessel included in its grand saloon a life-sized portrait of its namesake, Jay always made a point of riding aboard the James Fisk, Jr., so as to avoid being recognized.)

  Elsewhere, Gould tried in other ways to consolidate the sagging Erie’s position and make it as competitive as possible. Towards this end, in the summer of 1869, Jay set his sites on acquiring the Albany & Susquehanna Railroad. The tiny A&S ran 143 miles through the Catskills from the Hudson River at Albany to the Susquehanna River at Binghamton, New York. (Like the Erie, the A&S was a broad-gauge railroad, six feet across, designed and built before a smaller “standard gauge” became the norm nationwide. Thus, like the Erie, the A&S would eventually have to lay an extra line of track within its broad gauge to accommodate narrower, standard-gauge interchange traffic. Vanderbilt’s New York Central, on the other hand, was standard gauge for every inch of its mileage.) The A&S possessed just 17 locomotives (compared to 317 owned by the Erie) and 214 cars (compared to 6,643 held by the Erie). But the line’s insignificant rolling stock held little interest for Gould. What attracted him was its interchange potential with the Erie, which opened up the possibility of direct competition against the New York Central for traffic between Albany, Buffalo, and cities further west. As well, the A&S’s Hudson River railroad bridge at Albany could prove vital in linking the Erie, with all its valuable Pennsylvania coalfield connections, to coal-hungry New England.

  Founded in 1852 by Joseph H. Ramsey, the small but profitable A&S remained to some extent under Ramsey’s control in 1869. However, full half of the A&S’s fourteen directors (led by its vice president Walter S. Church) stood opposed to Ramsey’s management, and Ramsey himself had recently announced that either one side or the other would have to leave after the next round of board elections. Church and Gould therefore struck an agreement and made a plan to seize control of the A&S. To this end, Gould started buying what he could of the thinly traded A&S stock. In the process, Gould sent the price up to new highs of about a hundred dollars from its average in the low twenties but failed to tie up enough equity to ensure his dominance in concert with Church’s group of directors.

  Upon investigation, Gould found that the main reason for the scarcity of shares on the open market was the possession of large blocks by municipal governments along the A&S line. Under New York law, these municipally held shares could be sold by the towns only under very specific terms: at or above par value, and only for cash. Although Gould shortly succeeded in purchasing several hundred shares at par, he still remained short by the end of July, at which point he brought a dozen or so local commissioners from villages and hamlets in the western Catskills down to Manhattan as guests of the Erie Railroad. Gould and Fisk put up the gentlemen (representing some 4,500 shares among them) at the Fifth Avenue Hotel. They treated them to fine meals, took them on a tour of the new Erie offices, and then, on 1 August, made them an offer. If the trustees would vote with Church and Gould at the upcoming annual meeting of the A&S, allowing the Erie to take control of that road, the Erie would then buy all their shares at par value, providing a massive financial windfall to their various governments. The thought that Gould’s pledge was not legally enforceable apparently did not occur to the gathered local commissars, all of whom readily agreed to the deal. (Only the representative from Oneonta had the wit to insist that the Erie purchase his government’s shares before, rather than after, the A&S’s annual meeting. This insistence caused Gould to go into a sprint in order to get the deal done on time, as the A&S subscription books were set to close on 7 August, one month before the 7 September meeting.)

  Ramsey, for his part, was not unaware of the intrigue against his authority. A friend and ally of Vanderbilt’s who harbored a strong antipathy to Gould and Fisk, Ramsey now took steps to protect his domain. Legislation years before had authorized the issuance of 40,000 shares of A&S stock. However, given the small demand and the general lack of speculation in the stock, some 12,000 shares had never in fact been issued. Now, in collaboration with a few partners, Ramsey subscribed 9,500 new shares at $100 per share, putting down a deposit of 10 percent ($95,000), which he borrowed using $150,000 in A&S bonds as collateral. Subsequently, the company’s Ramseyite treasurer did his best to delay the formal transfer of Oneonta’s 700 A&S shares to the Erie. On 3 August, after receiving an order from a Supreme Court judge in Owego, the treasurer happily refused to effect the transfer of the shares in the firm’s subscription books. But then, twenty-four hours later, Thomas Shearman swooped in and arranged for the suddenly compliant Owego judge to lift his injunction. One day after that, Shearman orchestrated an order from Judge Barnard compelling the transfer of the Oneonta stock. For good measure, Barnard also suspended Ramsey from the A&S board.

  Walter Church now planned a meeting for the morning of the 6th where, with Ramsey absent, he would force a vote to fire the treasurer and appoint one favorable to the Erie group. That meeting was just getting under way when several Ramsey attorneys interrupted. The lawyers served Church and three other Erie-friendly board members with injunctions from Albany State Supreme Court Judge Rufus Peckham (father of a future U.S. Supreme Court justice of the same name), suspending them from the A&S board. This injunction in effect left the A&S without management, as the accumulated suspensions meant that those board members still standing did not constitute a quorum. Hearing this, Shearman, seasoned by the recent fight for the Erie, immediately realized what the A&S needed: a receiver. “Come to New York without fail tonight,” read a cable sent the afternoon of the 6th to Judge Barnard, tending the bedside of his dying mother in Poughkeepsie. “Answer care 359 West Twenty-third Street.”15 This was Josie Mansfield’s address. Leaving his mother to meet her maker without him, Barnard traveled immediately to Manhattan, where he signed papers appointing Fisk and one Charles Courter of Cobleskill–an Erie-friendly member of the A&S board–receivers for the A&S.

  Later that night, Fisk traveled north on Vanderbilt’s New York Central, carrying Barnard’s order and accompanied by several attorneys and bodyguards. The party met Courter at the Delavan House. There they rested for the night, unaware that Ramsey’s judge, Peckham of Albany, had already named one Robert H. Pruyn (a local and a Ramsey protégé) as receiver for the A&S. When Fisk, Courter, and company arrived at the A&S offices near the Albany riverfront the next morning–Saturday, 7 August–they found Pruyn already in possession and his terrain protected by more than a dozen tough railroad mechanics headed by John W. Van Valkenburg, general superintendent of the A&S. Van Valkenburg admitted Courter, an A&S board member whom he could not readily turn away, into the office. But he insisted that Fisk and the various Erie henchmen wait in the antechamber. When Fisk and his toughs tried to advance on the door, Van Valkenburg’s more numerous men easily turned them back. Subsequently, one of the A&S mechanics, posing as an Albany detective, pretended to take Fisk into custody. The man marched Fisk all the way to the station house before revealing that he was no officer of the law at all.

  After wiring Judge Barnard for more injunctions, Fisk returned to the A&S office, where, unaccountably, an air of civility now d
ominated. When one of Ramsey’s lawyers showed up, Receiver Pruyn “claimed the honor of introducing him to his friend Mr. James Fisk, Jr.,” wrote a reporter for the Albany Evening Journal. Fisk in turn complimented Van Valkenburg on his thoroughness and manliness and assured him there would always be a place for him with the Erie should he want it. On through the muggy afternoon “the lawyers assembled, and grave efforts were made by all parties to maintain composure and be friendly and genial, which succeeded to a good degree. The hours passed in talking over matters between each other, private consultations, jokes and business.”16 Later, when a freshly minted order arrived from Barnard via telegraph, thus lacking all the requisite signatures and seals, it was seen by everyone in the room as a topic for further discussion rather than an unequivocal rule of law. Barnard’s new injunction vacated Peckham’s ruling naming Pruyn receiver. It also forbade Pruyn, the Albany County sheriff, the Albany police, and railroad employees from standing in the way of Courter and Fisk. As a means to this end, Barnard issued the sheriff a writ of assistance “commanding him to call upon the whole county as a posse comitatus, if need be, to enforce the writ.” But Barnard’s order seemed unenforceable, and the parties foresaw no immediate end to their deadlock. Thus they agreed to “rest on their arms till nine o’clock Monday morning, each receiver leaving a personal representative in the office.”17

  Fisk took a late train back to Manhattan, where he conferred with Gould. Returning Sunday by night boat up the Hudson, he carried with him Judge Barnard’s orders formally executed on paper. But these did him no good. Ramsey’s support in Albany, where he lived, was quite strong. Few in that town believed Fisk’s true-enough assertion that Albany’s interests would be advanced by Erie control of the A&S. As John Steele Gordon observed, Fisk and Gould’s plan for the A&S involved turning Albany into an important hub. “Because of the Erie’s crippling broad gauge, a defect it shared with the Albany & Susquehanna,” wrote Gordon, “[the Erie] would have no choice but to break bulk at Albany on the way to New England [while] the New York Central could, and increasingly would, treat Albany as a whistle-stop.”18 But such fine points of railroad strategy were not easily conveyed via the press, at least not quickly with little time to spare.