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"Justice on the Rail - Erie Railroad (Ring) Smash Up"
No caption
This Harper’s Weekly cartoon by Thomas Nast dramatizes the
crash of the "Erie Ring," which ended financier Jay Gould’s
control of the Erie Railroad Company.
During the Civil War, Gould traded in government bonds and gold,
using his profits after the war to buy and sell railroad companies.
Gould, Jim Fisk, and Daniel Drew, became controlling shareholders in the
Erie Railroad Company. In the so-called "Erie War" of
1867-1868, they sought to deflect a hostile takeover effort by Cornelius
Vanderbilt, owner of the New York Central Railroad, by flooding the
market illegally with 50,000 shares of Erie stock. Gould, Fisk, and Drew
hired over forty lawyers to represent them in court, primarily relying
on the law firm of Field & Shearman. Vanderbilt likewise hired an
army of attorneys. After Judge George G. Barnard issued an arrest
warrant for Gould and his cohorts because of their violation of a court
injunction, they fled across the Hudson River to Jersey City, New
Jersey.
The "Erie Ring," as Gould and his associates were known,
soon relocated to Albany, New York, where they brazenly bribed New York
state legislators to pass laws making their previous stock issues legal
and barring the merger of the Erie and New York Central Railroads. A key
element in winning the favorable legislation was convincing William
Tweed, boss of the Tammany Hall Democratic political machine and a state
senator, to switch sides from Vanderbilt to Gould. After receiving
stock, cash payments, and a seat on the Erie Railroad board of
directors, Tweed steered the legislation through the state assembly.
Following Tweed’s conversion, Judge Barnard, a Tweed lackey, began
treating Gould and his associates favorably in his courtroom. However,
in the fall of 1871, Judge Barnard surprised nearly everyone by turning
against Boss Tweed, thereby opening the way for effective prosecution of
the Tweed Ring. Nevertheless, for his past actions, the New York Bar
Association secured Barnard’s impeachment and conviction on various
corruption charges, most of which were related to the Erie Ring. His
removal helped precipitate the fall of the Erie Ring in early 1872. In
this cartoon, Judge Barnard is the highest figure toppling over the rail
into the chasm.
On March 11, 1872, the Erie Ring was broken and a new board of
directors took over the Erie Railroad Company, with Gould formally
resigning as president the next day. In the cartoon’s background, the
new board of directors takes the form of an incoming train whose path
has been cleared by Justice at the switch. General John Dix (the
engine), is the new president; S. L. M. Barlow (second car), the new
counselor; William Watts Sherman (fifth car), the new treasurer; and, O.
H. P. Arches (sixth car), who spearheaded the takeover, was reelected
vice-president. H. M. Otis was re-appointed secretary.
Below Judge Barnard in the cartoon, is David Dudley Field, chief
counsel for both the Erie Ring and the Tweed Ring. Although vilified
because of such unsavory clients, Field’s legal writings were highly
influential in the United States and England, inspiring judicial reforms
and codification of civil and criminal procedures. To the left of Field
is his law partner, Thomas G. Shearman, whose upper body is obscured by
the smoke and dust of the crash. In 1873, Shearman left Field to partner
with John Sterling, and in 1875 counseled Gould on the financier's
attempted takeover of the Union Pacific Railroad. Today, Shearman &
Sterling is a prestigious, international law firm, with one of the
largest staffs (950 lawyers) in New York City. Plummeting upside-down at
the bottom of the picture is Jay Gould.
Robert C. Kennedy
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