Library of Congress
“ The Great Race for the Western Stakes,” published by Currier & Ives in 1870, depicts Cornelius Vanderbilt and James Fisk in a race for control of New York’ s rails.
Market Manipulation
“ Cheating at cards was always disgraceful. Transactions of similar character under euphemistic names of‘ operating,’‘ cornering,’ and the like were not so regarded.”
— Charles Francis Adams, Jr., 1886
During the Gilded Age, securities markets were a dangerous place for amateur investors— or even most professional investors. Few rules existed, and those that did exist were lightly enforced. The“ stock operators” who dominated Wall Street rarely bothered with extensive securities analysis. Why try to predict the future, when it was possible to create the illusion of a future you desired? This is why market manipulation was the preferred path to riches.
The mechanics of market manipulation were quite simple. They were usually conducted by a stock pool, in which many investors would combine their resources and appoint a single manager to execute the strategy. A bull pool sought to increase the price of a stock, while a bear pool sought to depress it. Almost anything was possible beyond this point. Stock pools would plant false stories in newspapers or execute fictitious trades to create the perception of large-scale interest in a security— whatever would move the stock in the preferred direction. Once the desired price target was achieved, the pool would slowly exit their position, take their profit and leave the unfortunate traders caught on the other side holding the bag.
The specific objectives of stock pools were well hidden while in motion, but public awareness of the concept was no secret. Newspapers regularly reported on rumored stock pools, market corners and bear raids. Journalists were often complicit— whether through direct bribery or editorial pressure from owners involved in such schemes. Only after the catastrophic losses of the Great Depression did public outrage finally generate enough pressure to outlaw practices that had long operated in plain sight.
Corporate Self-Dealing
“ The only high roads [ Thomas ] Durant preferred were those on his railroad. He never took an ethical high road. He betrayed partners, and he betrayed strangers. When there was no low road, he blazed one.”
— Richard White, author of Railroaded
Corporate corruption is a problem that will never disappear entirely in the United States. But those who claim it is worse today than in the past have not immersed themselves in the Gilded Age. During this time, no industry revealed the scale and creativity of corporate corruption more thoroughly than railroads. These enterprises required enormous amounts of capital, depended heavily on the issuance of government charters and land grants and promised profits that often lay far in the future. This combination rendered them uniquely vulnerable to self-dealing— and there were plenty of tools available to those who sought to engage in it.
www. MoAF. org | Winter 2026 | FINANCIAL HISTORY 11