Jay Gould, the Union Pacific Railroad and Financial Strategy

Abstract

This is the first paper that profiles the financial strategy of the late Jay Gould, the legendary 19th Century financial and business titan, and applies it to modern executive management. It proposes a financial strategy framework based on Mr. Gould’s various financial and business activities, which will be shown to have significant implications to modern executive management particularly the assessment and formulation of corporate strategic initiatives such as mergers and acquisitions, corporate financing (including share buy-backs), performance management, and risk management. The findings of this paper are that a financial strategy approach, consistently applied, could result in returns that, at times, materially exceed market returns in all market environments (i.e., during both normal times as well as periods of distress, including macroeconomic distress). The research for this paper follows that undertaken for a historical biography of Mr. Gould, the official history of the Union Pacific Railroad, a 2013 documentary on Mr. Gould (which won an Emmy Award), and various papers on financial strategy. Note: this paper is a profile of Jay Gould and financial strategy in general; more detailed information on both Mr. Gould and financial strategy can be found in the cited references.

Keywords: Jay Gould, Financial Strategy, Railroad History, Share Buybacks

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