Railroads and the Equity Receivership: An Essay on Institutional Change

“Mr. Jay Gould doth at this hour bestride the narrow Wall Street like a colossus. He is indeed the Autolycus of the western world. No pickpocket, either ancient or modern, has been more successful.†Such florid mixing of metaphors, even in the late Victorian era of railroad chaos, was rare for the financial editor of the staid London Railway Times. He had just read the plan by which the arch “robber baron†proposed to reorganize the wobbly, poorly integrated and ill-financed Wabash, St. Louis and Pacific Railway that Gould had sought to build out of at least two dozen railroads between Kansas City and Detroit. The editor's indignation a few weeks earlier is not recorded, but it was doubtless monumental, for on May 28, 1884 Gould had successfully sent his lieutenants into a United States District Court in St. Louis with a brazen request for appointment of receivers for the Wabash, under a concept of receivership which broke nearly every important precept of this old branch of equity law.