The Londonderry sifter. (South Londonderry, Vt.) 1883-19??, 1892-12-09
Jay Gouid's Career Ended.

/
Jay Gould, whom the newspapers
designate as the "great financier," il
dead and his body deposited in 1
500, 900 tomb. He leaves an estat,
worth between S75,000,000 and ,
500, 100000. The great newspa
pers teen with incidents of his life
From these it is learned that upon his
first venture in the great business
world, which proved hard one, he
J commenced to pray, and presumably
kept it up through life, as his pastor
was constantly by the side of the sick
i bed.
| That the readers of the SITTER may
understand the ways and means
adopted by Gould TO amass this
great fortune we here copy from the
New York Press an account of his
Erie railroad transaction by which he
made many millions:
1t was in July of 1868, when Erie
shares were selling at seventy dollars per
share. Abundant crops were in sight,
confidence had been greatly restored af-
ter the panic of 1867 the feeling was buoy
ant and there was general expectation of
higher market. Everybody was buying
stocks. About this time Gould and other
directors Of Erie sold large amounts of
the stock of the road, also large amount
"short" The market gradually declined,
but SO great was the general confidence
in the ultimate advance that at each de-
cline fresh buyers came into the market,
until very large blocks of stock had been
sold before the public became aware of
Gould's intentions
His next move was to depress the stock
as low as possible, so as to buy back
Under the bylaws and charter of the Erie
all powers of the board of directors be-
tween the meetings of the board rested
in the executive committee" This COM
mittee, relying beforehand on the well
tried support of the New York courts,
undertook secretly to make and issue
fresh shares of the Erie to an amount al
most doubling the capitol stock of the
company. These shares were secretly but
rapidly sold in Wall street for cash, and
the proceeds to amount to about $4,000,
900, were thence-forth used as additional
capital to carry on the campaign.
The sale of such large amounts of stock
naturally depressed further the declining
prices and caused alarm among the deal
ers, while the sudden appearance in the
'sstreet" of the newly issued certificate
led to an official inquiry on the part Of the
New York Stock Exchange. This il.
quiry was met by Gould with frank ac-
acknowledgement of the entire fraudulent
issue, accompanied by disguised threat
that still further issues were in prepera
ton.
The alarm in Wall street was, of
course, panicy, and further decline on
Erie shares was the immediate result.
Not only did most of the holders of the
stock sell their shares at whatever they
would bring in the market, but so strong
now was the belief in the worthlessness
of the stock that all the dealers and spec
ulators in the "street" were led to follow
the example of the Executive committee
and sold large amounts for future deliv-
cry.
The price had not yet fallen low
enough, nor was the panic sufficiently
great, to enable the combine to buy back
all the shares which they had sold with
out causing the price to advance materi-
ally. They therefore commenced series
of maneuvers which at once removed
their operations from the mere Wall
street arena and gave them national i'm
portance.
1t was well known that the National
Bank act made it obligatory upon the
national banks of the city to hold re-
serve in greenbacks and other legal ten
ders equal to 25 per cent. of their indebt-
edness to depositors and others. In the
fall season the greenback reserve is al
ways disposed to decline, owing to the
shipment of currency South ani West to
move the crops, and the banks were gen.
orally obliged to reduce their loans in or
der to keep up their reserve to the legal
limit.
In this condition was the money mar
ket when the very heavy sales of the
fraudulent issues of Erie stock had de-
pressed the prices from 10 in July to 40
at the close of October These sales had
produced, it was supposed, about lO,-
100000, which, together with the 4,00O,-
900 or 100000 more obtained from
other sources, the combination had de-
posted to their credit in some of the city
banks. Checks were now drawn on these
banks for the amount SO deposited and
were presented for pay in greenbacks,
which the bank could not refuse; and the
greenbacks 50 obtained were suddenly
withdrawn from the bank reserve.
The effect was electrical. Every bank
in the city saw its greenback reserve in
danger. No one could tell what the next
step might be. There was a mystery
about the operation that added to the
terror which its boldnes had inspired
The banks called in a large portion Of
their loans. Money became almost unob-
tainable, and whoever had borrowed
money on stocks was compelled to sell