Jay Gould, the Union Pacific Railroad and Value Creation

Financial History, No. 119, pp. 24-27, 39, Fall 2016

Posted: 16 Nov 2016

See all articles by Maury Klein

Maury Klein

University of Rhode Island

Joseph Calandro, Jr.

Fordham University - Gabelli Center for Global Security Analysis

Date Written: November 15, 2016

Abstract

No one in United States financial and business history is as misunderstood, and under-appreciated, as the late Jay Gould (1836-1892). There are a number of reasons for this, primary amongst them is that Gould earned a reputation as the most hated man in America. Two early episodes, the Erie Railroad war and Black Friday when he conceived an audacious scheme to corner the nation’s gold supply in 1869, did much to create the image of Gould as a ruthless, unprincipled Wall Street renegade who seemed always to skirt the letter of the law. However, there was much more to Jay Gould than this. Maury Klein’s biography demonstrates in detail how, following the famous Panic of 1873, Gould’s entry into the management of the then floundering Union Pacific Railroad (UP) marked the beginning of Gould’s emergence as a businessman and economic developer of the first rank. This article opens with a profile of Jay Gould, and then highlights the value he created at the UP. Significantly, the U.S. economy was both in a major depression and generally deflationary during most of the time that Gould controlled the UP. Next, practical insights into how Gould created value are presented and framed in a way applicable to modern-day corporate executives, Boards of Directors and investors.

Keywords: Jay Gould, Railroad History, Financial Strategy, Value Creation

JEL Classification: G32, L10, L21, L26, M10, M21

Suggested Citation

Klein, Maury and Calandro, Jr., Joseph, Jay Gould, the Union Pacific Railroad and Value Creation (November 15, 2016). Financial History, No. 119, pp. 24-27, 39, Fall 2016. Available at SSRN: https://ssrn.com/abstract=2869927

Maury Klein

University of Rhode Island ( email )

Quinn Hall
55 Lower College Rd.
Kingston, RI 02881
United States

Joseph Calandro, Jr. (Contact Author)

Fordham University - Gabelli Center for Global Security Analysis ( email )

531 Hughes Hall
441 E. Fordham Rd
Bronx, NY 10458
United States

HOME PAGE: http://www.linkedin.com/in/josephcalandro/

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