The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-01-29
THE TRIBUNE OWNER CAUGHr nv
ms OWN TRfP
How Mr.. Jaw Gould became tho UnwiIu,,
Owner of the Pacific Wall

How MIR. jaw Gould brcame tho UnyvtIu,.
Owner of the Pacific Wall.
To THE EDITOR OF THE SuN-Sir. Thu
manner In which Jay Gould obtslncd control q,
Pacific Mail is ~ yet an unwrittcn history lis
generally supposed that Gould knows wba,
he IL buvinr, and that he gives less than prom.
erty is worth when he sees 1T to take H. I'm
buving Pacific Mail, however, he f1r ono, was
badly swim He'd not through hi own JUDGMENT.
but Ivy cgis tive action which in a fow moments
lessened tho value 81 the merchandise which
he had bought by millions OF dollars. SINE ia
took the mountain on his shoulders he has been
compelled to carry 1t, although he has made
numerous efforts to dump It on a conndlus pub
lie, aud to secure Panama In It's stead The
street will not take hold Of Pacific Mail, how
ever, since Could bought 1t: nor will Park arsi
HE friends dispose Of Panama at anything iiks
the present ngures.
In this way Gould Is effectually cbeckmated.
and can only save himself nv pur 'hasina Panama
at price In the vicinity Of
should he do this, ne would monopolize the
traflc between the Pacific and Atlantic. except
such a. goes round the Horn, for an indefinite
period
or course, he could charge whatever he saw
nj for the transport ttiOn of freight and pas.en-
himself for the tremendous ex 1euditure
Several months ago he offered 21 Tor tn,
controlling interest In Panama, but the bid wa
declined. At present. then. he Is left with Pa
cite Mail on his hands which he cannot sell and
the Union Pacific should Panama put on an
other line ~ steamers.
The way IN which he became saddled rfth
Pacific Mail against his wishes was a. follows:
In 1874, Pacific Mail, recovering from the low
figures TO which II had fallen in the panic be-
came active and strong In the vicinity OF 81
Russell sage, director and ofiicer In the com-
panv, sold out his stock somewhat lower and
went heavily short Alarmed by its buovancy
he called upon Gould aud informed him of the
rotten condition Of the company. From his
position he WIS amply Informed as TO liz
finances, and he assured Gould that the concern
was really bankrupt and that he was then taking
care OF the conpany's paper to- keep IL from
protest; that the llpse OF a few months would
md the stock selling where that Of Atlantic
Mail was current. He proved these assertions in
regard 70 the desperate condition II the com
panv to be facts. and Gould went short OF the
stock. Sage fearing that the bull combination
would advance the price In spite OF It's WORTH
lesspess, covered his shorts with Goulu's sales,
and left the speculation. with no motive re-
dtion OF the company, ne abandoned Gould,
and left him TO get back his stock as beat be
might Rhs ono, .,,ors .,.,d,,v advance, o,,, con,
was heavily Involved. He sold at every advance
the Union Pacific Raj road, he started on tour
to the West. Pacific Mail when he left was sell
ing at about 20 when he reached Salt Lake City
he received a telegram that II had advanced 10
e. The loss on the line OF shorts was then about
sl,OOO.O0O and postponin9 any further pleasure
| for New York. His first business when he re-
turned was TO ootain facts in regard to the CONF
PAWS condition. and by skifully ventilating
them he succeeded In keeping the stock quota
| tions down until Congress met. Then he spared
no expense to bring about a Congressional in
| vestigation. Backed by his Tribune and other
newspaper Influence In New York. aud lobby
IN WashingtSn, this was secured hichaId y.
management Of the corporation. and 80 skill
| fully were the cKposure- made public that tho
country generally had no suspicion Of the real
manipulator behind the scenes.
In spite Of the efforts of the bull clique, the
Gould covered all OF his shorts at profit. Unable
to obtain control Of the Panama Railroad he then
| subsidy, which he had been iaboring to have
taken away, aud 10y buying enough Pacihc Mail.
| TO enter the direction aud secure a monopoly u
the carrying trade between the Atlantic and
Pacific.
assured, aud bets were freely made that II would
be taken away. The inside people knew that
this meant nothing else but bankruptcy, and
| sold out their stock; Gould, however, found out
by his confidential agent at w sshiDgtOn that the
| judiciary Committee might not report In favor
| OF the repeal. What influences were set at
| work to have them at the last moment report to
| Congress that the subsidy should be continued
matter OF note that Gould bought III the stock
possible in the neghborhood Of 80 upon his
| private adyices from hs agent as TO the contn-
| uaDce the subsidy. rhe morning when the
| street expected that the committee would re-
| port TO Congress In favor OF reoeal OF the sub
sidv, the stock opened at about 20, and by half
past eleven rose to 36h. or course Wall street
was demoralized, aud scene Of wild excite,
| ment ensued. dt was supposed Gould had
| PLAYED one OF his sh 70 tricks on the street By
liking" the committee at the last moment.
self that the street was caught but just at this
time a telegram from WASHINGTON announced
| that the committee had reported In favor Of re-
pealing the subsidy. The tables were turned
| Gould was the victim ; and Instead OF catching
| the street, a terrific selling movement ensued,
| which Obliged him to buy everything offered,
| and before three o'clock the ptice had returned
| to about the opening figure Of the morning aud
| Gould was saddlsd with the major part OF =
| worthless stock, for which he would not have
| given Is, as a permanent Investment, two weeks
| before
Ever since then he has been endeavoring to
make some arrangement by which he could buy
| Panama ana get rid OF the enormous load Of
| worthless Pacific Mil stock with which ia an
evil moment, he bee me siddled.
NEW YORK Jan. 81, 1875. SrIRABOUr.