Manipulator of Manipulators

RUSSELL SAGE: THE MONEY KING by Paul Sarnoff. 398 pages. Obolensky. $6.95.

Commodore Vanderbilt was a rowdy illiterate who wore a fur coat winter and summer and bellowed, "What do I care about the law? Hain't I got the power?" Big Jim Fisk was an ebullient bluffer who wore velvet vests and many rings, was shot to death by his mistress' lover. Dapper Jay Gould was a consumptive neurotic who was once led by a doctor from a board of directors' meeting in raving hysteria. These great robber barons all had the stuff of celebrity, and all of them have already been documented to death. But not Russell Sage, who was, according to Biographer Paul Sarnoff, more powerful than them all and as eccentric as any.

A manipulator's manipulator, he preferred to stay out of sight and make others dance to the tune he whistled. In his 70-year career he cleaned up in everything from lead mines to trotting tracks, ruled a vast network of railroads that spread from Ohio to the West Coast, established himself as the man who banked the robber barons, eventually scrambled to the top of a $100 million heap. Sarnoff also makes it clear, sometimes inadvertently, that Sage was a liar, a swindler, and a vivid illustration of that cliche about the desire for money being the root of all evil.

Partly because he cunningly let others take the credit (and the blame) for his mephitic machinations, partly because he carefully left few letters or other memorabilia, a full-length biography has never before been written. Author Sarnoff, 46, a Wall Street broker by profession, pays little mind to literary style or organization, but has done his historical homework thoroughly.

Big Leap. The son of a struggling New York farmer, Russell Sage left home when he was twelve to work in a grocery store in Troy. He had already decided he would be the richest man in the world, spent one-third of his $4 monthly salary for night-school tuition, and read every book he could find. By 15, he was principal moneylender to the gilded youth of Troy.

At 19, he took his first speculative leap. For the first time in living memory the Hudson River froze from bank to bank in the month of November. Ships were icebound at their moorings, and tons of perishable produce piled up on the docks. Even the most seasoned local merchants panicked. Not canny Russell Sage. At giveaway prices he snapped up three of the crippled, empty sloops, stacked them with cargoes, then settled back to wait. Sure enough, the freeze was a fluke. The ice melted overnight, and Sage sailed off for New York where he made a $50,000 killing. At 24, he operated a fleet of riverboats and a private moneylending business, was a bank director, city councilman, and creditor to two of New York's biggest Whigs: Editor Thurlow Weed and Governor William H. Seward.

Soon he promoted himself to railroads. A typical operation was the La Crosse & Milwaukie Railroad, which he built in 1852. Sage gave away some $1,000,000 in La Crosse bonds as bribes to state officials, legislators, newsmen in an effort to have awarded to the railroad a major part of the Wisconsin land grant. When the bribery was exposed, he arranged to put the La Crosse into receivership (Sage men were of course the receivers), then created the new Milwaukee & Minnesota Railroad Co., which succeeded to the assets, but not the liabilities, of the La Crosse road. His personal investment was probably limited to $25,000.

Front Man. Richer pickings were to come. Sage expanded his moneylending business (sometimes extracting interest as high as 80%), barely escaped serving a jail term for usury, supplied money to both Vanderbiit and Gould in their battle for control of the Erie Railroad, netted $10 million in ten days during the Panic of 1873, and most important, acquired the brilliant, heaviIy indebted Gould as front man and junior partner.

The more money Sage accumulated, the more he wanted. But he dressed like a man who had just come from a rummage sale: shiny serge jacket, frayed grey vest, floppy black trousers, and square-toed brogans. One day a demented broker marched into Sage's office. In one hand he held a note demanding that Sage give him $1,200,000; in the other hand he held a bag of dynamite. Sage eased a visitor between himself and the dynamite, dashed for the exit. When the smoke cleared away, the broker was dead, the visitor was badly mangled, Sage was virtually unharmed. The visitor sued Sage, who fought the case through four court trials and never paid him a penny.

He worshiped his first wife Marie-Henrie blindly, and when she died he blundered into marriage with Olivia Slocum, a blueblooded schoolmistress whose father he had ruined. He spent the rest of his life taunting Olivia with memories of Marie-Henrie. Olivia liked dogs; Sage acquired cats (which Marie-Henrie loved and he detested). Olivia wanted Sage to decorate their house with works of art; Sage hung photographs of locomotives and maps of his railroad holdings. Olivia liked Oriental rugs and bric-a-brac; Sage littered the parlor with buffalo robes. But Olivia got even. When Sage died in 1906, leaving her "the wealthiest woman in the world," Olivia dispersed his fortune in good works, endowed schools and colleges, planted rhododendrons in Central Park, and established the Russell Sage Foundation, which has to date expended over $60 million in humanitarian causes that the old pirate probably never gave a thought to.

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