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Black Friday (1869)

Photograph of the blackboard in the New York Gold Room, September 24, 1869, showing the
collapse of the price of gold. Handwritten caption by James A. Garfield indicates it was used as
evidence before the Committee of Banking & Currency during hearings in 1870.

The Black Friday, September 24, 1869, gold panic was caused by the efforts of two
speculators, Jay Gould and his partner James Fisk, (AKA The Gold Ring) to corner the gold
market on the New York Gold Exchange. The scandal took place during the Presidency
of Ulysses S. Grant whose policy was to sell Treasury gold at weekly intervals to pay off the
national debt, stabilize the dollar, and boost the economy. The country had gone through
tremendous upheaval during the Civil War and was not yet fully restored. This period, known as
the Gilded Age, was a time of great industrial growth which invited much investment and
Abel Corbin, a small time speculator, married Virginia Grant, the younger sister of President
Grant. After the marriage, Gould and Fisk approached Corbin, taking advantage of his brother-
in-law relationship with the president, and persuaded Corbin to introduce them to Grant. Gould
and Fisk hoped that befriending the President would get them privy information about up and
coming government gold sales—information with which they manipulated the market. It worked,
resulting in a scandal that undermined the credibility of Grant's presidency and the national
economy. Gould and Fisk used their personal appearances with Grant to gain clout on Wall
Street in addition to using their insider information.
During the first week of September, Grant's Secretary of Treasury George S. Boutwell received a
letter from Grant telling him gold sales would be harmful to Western farmers, a notion planted
by Gould and Fisk. Boutwell suspended Treasury gold sales. At the same time, Gould and Fisk
began buying gold at Gould's New York Gold Room, raising the price of gold. After learning
about the nature of their scheme, Grant ordered the release of $4 million in gold on Friday
September 24. Grant's move drove down the price of gold, crushing the Gold Ring's corner on
the market. A panic on Wall Street ensued and the country went through a few months of
economic turmoil. Thanks to Grant's efforts, as well as of his administration, a national
depression was averted. Gould and Fisk hired the best defense available. Favored by Tweed
Ring judges, the conspiratorial partners escaped prosecution. An 1870 government investigation,
headed by James A. Garfield, exonerated Grant of any illicit involvement in the conspiracy.

To finance the Civil War and Reconstruction, the federal government had assumed a large
national debt. This debt escalated from $64 million in 1860 to $2.8 billion by the end of
the Andrew Johnson administration, when Grant was elected president.[1] The problem was
further compounded when the federal government issued paper money, known as "greenbacks",
which were not redeemable in gold. Mandated as the only payment for federal debts,"both public
and private," these "notes" also served to take gold currency out of circulation, causing the price
of gold to rise sharply. It was generally believed that the U.S. Government would eventually
redeem the "greenbacks" with gold.[1] Determined to return the national economy to pre-war
monetary standards, one of the first things Grant did as President in 1869 was to sign The Public
Credit Act,[a] that would repay U.S. bonds in "gold or its equivalent" and would redeem
greenbacks from the economy as soon as possible. Grant believed that putting "sound money"
back into circulation was the best approach to restoring the economy.[3][4]
Grant put the talented George S. Boutwell in charge of the U.S. Treasury. Boutwell's primary
task was to reduce the national debt. To accomplish this, in April, Boutwell ordered his assistant
treasurer to sell gold from the Treasury and buy up wartime bonds. He also initiated reforms in
the Treasury Department by improving methods of tax collecting and attacking the problem of
counterfeiting. By the end of May, the national debt had been reduced by $12 million. Boutwell's
treasury policy of reducing the national debt kept the money supply level and the gold price
artificially low.[1] The purpose of Grant's fiscal policy was to reduce the amount of greenbacks in
circulation that could be redeemed in gold[1] at some future date.

Cornering the gold market

In 1869, a group of speculators, headed by James Fisk and Jay Gould, both directors of the Erie
Railroad, sought to corner the gold market through a plot to induce President Grant to stop
Boutwell from releasing weekly gold from the Treasury Department in order to raise the gold
price.[5] Fisk was a gregarious showman who controlled the Erie Railroad, while Gould had made
his fortune as a cotton smuggler during the Civil War.[6] The first step in the plan was to
recruit Daniel Butterfield, a former Major General and war hero during the Civil War[b] who
lacked any experience in finance. Both Corbin and Gould lobbied successfully for Butterfield's
appointment as the assistant treasurer,[7] through whom Boutwell gave orders to sell Treasury
Department gold. Gould bribed Butterfield with a $10,000 check, more than Butterfield's annual
salary of $8,000. Butterfield agreed to tip the men off when the government intended to sell
Black Friday's conspirators

Jay Gould
Railroad developer and speculator

Jim Fisk
Stockbroker and speculator
Gould and Fisk then recruited Grant's brother-in-law, a financier named Abel Corbin who had
married Grant's younger sister "Jennie".[9] Corbin was considered a smooth talker and had made
money speculating in real estate, and more importantly to Fisk and Gould, he had direct access to
Grant.[9] They used Corbin's relationship to get close to Grant in social situations, where they
would argue against government sale of gold, and Corbin would support their
arguments.[10] Gould also attempted to bribe Grant's personal secretary Horace Porter by giving
him a $500,000 gold account in his name, but Porter, a former military aid to Grant,[11] was loyal
to the President and declined the offer.[10] Not accustomed to having such offers turned down,
Gould went ahead and made the purchase and opened a brokerage account in Porter's name
regardless. When Porter was informed of Gould's unauthorized transaction, he refused the offer
in writing. In similar fashion Corbin approached Grant's wife Julia and attempted to entice her
into accepting half interest in $250,000 in bonds, but she turned that offer down.[12]
Gould secured owning interest in the federally audited New York's Tenth National Bank, a Wall
Street broker's bank that was used as a facility to contract business.[10][12] In addition to meeting
at Corbin's mansion home, Fisk and Gould also talked with Grant on their Erie Canal railroad car
and in Fisk's box seats at New York's Fifth Avenue Theatre.[10] When Gould planted an idea in
Grant that if gold prices increased, it would lower the dollar, and allow farmers in the West sell
their crops overseas, Grant gave no response. Both Grant and Boutwell strongly felt that the
nation's war time debt had to be paid to assure the credibility of the United States in the eyes of
the European banks. To accomplish this Boutwell began selling gold from the Treasury's reserve
of $100 million Gold bar, initially without the President's express consent, and then using the
proceeds to buy back U.S. bonds. Boutwell's controversial approach was later endorsed by Grant,
giving Boutwell all the latitude he needed. Boutwell later wrote that only outsiders unaware of
the finer designs of his dealings thought "the President was taking any part in the operations of
the treasury concerning the price of gold". Grant, meanwhile, was unaware that his appearances
in the company of Gould and Fisk sent a message to Wall Street that he supported raising the
gold price.[4]
When buying gold and bonds, Boutwell placed all his orders through Daniel Butterfield in New
York. To reduce the temptation of illicit dealing, Boutwell, at Butterfield's recommendation,
publicly announced his orders by telegraphing the news to the Associated Press. Over the next
few months Treasury gold began to flood the market while Boutwell began buying back wartime
bonds. By September 1, Boutwell had reduced the national debt by $50 million. He continued
this practice at an accelerated rate while Grant, having closely followed Boutwell's dealings,
began to express reservations and sent him a letter from Washington, Pennsylvania criticizing
that driving the price of gold down would hurt farmers. Many brokerage firms collapsed while
trade volume and agriculture prices plummeted, causing a mild recession, but by January 1870,
the economy resumed its post-war recovery.[13] An indignant Boutwell saw little merit in either
Grant's (or Gould's) arguments, feeling that the government had no place in manipulating the
market regardless of who benefited. However, not wanting to go against the President, Boutwell
ordered Butterfield to halt semi-weekly September government gold sales. Believing he now had
a "green light" from Grant, Gould began buying gold through brokers at an accelerated rate while
his gold account grew from $10 to $18 million in specie.[4][14]

Breaking the Gold Ring

Starting on September 1, Gould and Fisk put their plot into motion by purchasing $1.5 million in
gold in the names of Corbin and Butterfield. The two conspirators would make $15,000
($263,000 in 2016) for every dollar rise in gold. By September 6, the price of gold had risen by
$4.50 to $137 an ounce. By September 7, Gould was faced with a startling reversal when
members of his pool were directed to sell off their $6 million they had achieved during the
previous buying frenzy.[15] Prices of gold fell sharply from $137 to $134 in one day. Gould lost
more than $100,000 in two days. Abandoned by his associates Gould looked to Fisk for
assistance but he was away on railroad business. Fisk returned to New York on September 8 and
found Gould worried and depressed. Fisk reminded Gould that he still had "enough gold to sink a
ship" while the two looked to others and devised other schemes to come out on top, but they
knew by this time that if they began buying again, the Treasury would counter their efforts and
begin selling at an accelerated rate once again.[16]
Broke the Gold Ring corner

Ulysses S. Grant
President of the United States

George S. Boutwell
Secretary of the Treasury
Gould and Fisk had a list of every broker and speculator who had borrowed gold from the gold
exchange, some 250 of them, including Jay Cooke, the biggest financier on Wall Street.[c] Fisk
proposed that the list be published in the newspapers the next day with the demand that the "bulls
and bears" settle on their debts by three o'clock the next day, at a fixed rate of $160. If they
refused, Fisk was ready to squeeze them at an even higher rate, a scheme that bordered on
blackmail. Fisk's associates scoffed at the scheme and criticized Fisk of being true to form for
suggesting such an unconventional idea. After being warned that the idea violated New York
State criminal conspiracy law, Gould, Fisk and their associates chose another approach. Come
Friday they would bull the price of gold to an even higher price by buying large amounts of gold
at the current high price – and selling even higher. The idea that their plan could bankrupt
innocent men and ruin the standing of the nation in world credit markets never even entered the
conversation. Fisk however saw the flaw to this alternative approach, fearing that pushing the
price of gold up too quickly would provoke the President to step in and break the gold corner.[18]
On September 12, Grant warned Boutwell that a "desperate struggle" was taking place between
the "bulls and bears" of the gold market. Corbin told Gould he was concerned whether Grant
would stop selling gold from the Treasury, whereby Gould told Corbin to write a letter to Grant
encouraging him not to sell gold.[4] Corbin wrote Grant the letter, now lost, encouraging Grant
not to sell gold. Fisk had the letter delivered by William Chapin of the Erie Railroad, to
Washington, Pennsylvania, where Grant was vacationing. Interrupting Grant's crochet game,
Chapin gave him Corbin's letter, whereupon Grant read the letter and told Chapin "No, nothing"
when Chapin asked for a reply.[11] When Chapin had left, Porter told Grant about Gould setting
up a $500,000 gold account in New York.[19] Upon hearing this, Grant finally figured out what
Gould and Fisk were up to. Through a letter his wife was writing to her sister, Grant urged
Corbin to have nothing to do with Gould and Fisk, and promptly arranged a meeting with
Boutwell.[20] On September 20, 1869, Gould and Fisk started hoarding gold, driving the price
higher. By September 22, gold closed at $141 an ounce at which time Fisk and Gould owned
between $50 and $60 million in gold between the two of them, about three times the public
supply available in New York. The increase in gold prices on this day alone had netted a profit of
$1.75 million for the two conspirators. On Thursday, September 23, Gould visited Corbin's
house and was informed of Julia's letter that arrived the same day. After reading it and
discovering Grant was annoyed with his speculations, Gould knew he was very likely to sell gold
on Friday.[21] Subsequently, Corbin asked Gould if he would buy Corbin's account so he could
tell Grant that he no longer owned any gold, but Gould refused to bail Corbin out, fearing it
would trigger a collapse in the market. Instead, he offered Corbin $100,000 interest[22] and
exclaimed, "Mr. Corbin, I am undone if that letter gets out".[23] Gould chose not to inform Fisk of
this recent development.[24] When Grant returned to Washington D.C., he found $60,000 worth
of gifts from the Gold Ring sent to the White House. Sensing bribery, Grant immediately ordered
the paintings and statues boxed up and returned.[20]
Panic in Gold room on Black Friday
On September 23, Grant and Boutwell met and the two decided to break the gold ring by selling
gold from the treasury if the gold price continued to rise.[25] On September 24, Gould began
quietly selling his gold while Gold Room agents put up a public front and continued buying at a
lesser rate with Fisk leading the spurious buying activity.[24][22] When gold had surpassed $155
an ounce on Friday September 24, Grant ordered Boutwell to release $4 million in gold and buy
$4 million worth of bonds. Within minutes the price of gold immediately dropped from $160 an
ounce to $138. Gould's and Fisk's gold corner was broken.[25][d] Some speculators were ruined,
while gamblers who bet that the gold price would go down made money.[26] Corbin lost money
on his loan he took to buy gold. [26]

Aftermath and investigation

James A. Garfield
Chairman of the House Banking Committee
The Black Friday September 24 gold crash caused the United States financial devastation for
months. On Saturday, September 25, Gould, Fisk and Corbin met at Gould's office at the Opera
House with each claiming to be the victim while blaming the other for the disaster.[27] Obligated
to make good on all debts, the Gold Exchange Bank no longer had enough reserves to cover the
mounting debts,[28] while the situation there deteriorated by the hour.[29] The Tenth National
Bank, which normally closed at 3:00 pm at that hour had depositors and speculators crowding
the sidewalk at its front door. The Police set up patrols inside and outside the bank.[28]
Stock prices dropped by 20 percent from September 24 to October 1, while trade was minimal.
Between January 1870 to September 1870, only 4 million shares of stock were exchanged.
Dozens of brokerage firms went bankrupt, while those who bought paper gold from Fisk's gold
room went unpaid. Farmers, who constituted 50 percent of the country's workforce, suffered the
worst; wheat prices on the Chicago trade fell from $1.40 to $0.77 cents a bushel. Corn dropped
from $0.95 to $0.68 cents; while other commodities such as rye, oats, and barley had similar
losses.[30] The New York Tribune reported that goods ready for export could not be
shipped.[31][e] American agriculture went into steep decline and would be plagued by tight money
and dwindling markets for years to come.[30] Grant's and Boutwell's actions to break the Gold
Ring, however, kept the Wall Street panic from growing into a national depression.[32] Butterfield
was allowed to resign from the U.S. Treasury without an investigation in October, 1869.[33]
The subsequent Congressional investigation[f] was chaired by James A. Garfield. Grant's decision
to counter the escalating price of gold did not completely dispel rumors that he and his
administration had profited from the affair.[35] The investigation was alleged on the one hand to
have been limited because Virginia Corbin and First Lady Julia Grant were not permitted to
testify. Garfield's biographer, Alan Peskin, however, maintains the investigation was quite
thorough.[33] The investigation cleared Grant of wrongdoing, but excoriated Gould for his
manipulation of the gold market and Corbin for exploiting his personal connections to Grant.
Butterfield was implicated for serving as a double agent giving information to Gould.[36] In his
Congressional testimony, Gould said Grant "was a very pure, high-minded man; that if he was
satisfied what was the best thing to do, that was what he would do."[11]
Dodging any financial harm, Fisk and Gould escaped conviction, spending money to buy the best
legal defense, including talented attorney David Dudley Field, while Democratic Tweed
Ring judges such as Albert Cardozo shielded them in court. Gould continued to remain a force
on Wall Street, and when he died in December, 1892, his estate was worth $70 million. Fisk
remained wealthy, but was caught in a scandalous romance for a lady's affection and was shot to
death by a jealous lover on January 6, 1872. Boutwell served the remainder of Grant's first term,
until in 1873 he resigned to be elected United States senator from Massachusetts. He served in
the Senate until 1877, afterwards retiring to private life.[30] In 1871, the Tweed Ring run
by Boss Tweed was broken by New York reformers including Edwards Pierrepont, Grant's future
Attorney General, and prominent member of the Committee of Seventy. [37][38]
Henry Adams believed that President Ulysses S. Grant was much too tolerant of his corrupt
associates. In 1870, Adams wrote an article, "The New York Gold Conspiracy," that detailed
Gould and Fisk's scheme to corner the gold market, and hinted that Grant had participated in or
at least known of the scheme.[39]

Horace Porter
Grant's personal secretary

Julia Grant
Wife to Ulysses
William Boss Tweed
Leader of Democratic Party New York Machine

David Dudley Field

Attorney hired by Fisk and Gould
Daniel Butterfield
Assistant Treasurer of the United States

A twenty dollar Liberty Head – Double Eagle gold piece, issued in 1869, commonly used in
banking transactions.
One dollar "Greenback", issued in 1862

A cartoon showing Jim Fisk stirring up the gold market in New York. Grant is shown running
holding a bag of gold.

See also

 Bibliography of Ulysses S. Grant

 Ulysses S. Grant presidential administration scandals
 Panic of 1857
 Panic of 1893
 Ponzi scheme
 List of Ponzi schemes
 Denver Depression of 1893
 Stock market crashes
 The Toast of New York – 1937 film of fictionalized story of Fisk's life, with dramatic
presentation of the gold corner.


1. Jump up^ The Act set a 10 year time table for returning to the Gold standard.[2]
2. Jump up^ Butterfield was Chief of Staff for Joseph Hooker and is noted for creating the
bugle call commonly known as Taps.[7]
3. Jump up^ Cooke was prominent among those who had urged Grant to step in and break
the gold ring.[17]
4. Jump up^ The premium on a gold Double Eagle which represented 0.9675 troy ounces
(30.09 g) of gold bullion at $20 was now 30 percent higher than when Grant took office
only months before. But when the government gold hit the market, the premium
plummeted within minutes.
5. Jump up^ The stock market joined in on the plunge, dropping a full 20 percentage
points and bankrupting or inflicting severe damage on some of Wall Street's most
venerable firms. Thousands of speculators were left financially ruined, and at least one
committed suicide. Foreign trade ground to a halt. Farmers may have felt the squeeze
most of all, with many seeing the value of their wheat and corn harvests dip by 50
6. Jump up^ conducted by the 41st Congress, third session, December 5, 1870 – March 3,


1. ^ Jump up to:a b c d White 2016, p. 478.

2. Jump up^ U.S. Federal Reserve Board, 2007
3. Jump up^ Smith 2001, pp. 480–481.
4. ^ Jump up to:a b c d White 2016, p. 482.
5. Jump up^ White 2016, p. 479; Chernow 2017, p. 672.
6. Jump up^ White 2016, pp. 479–480.
7. ^ Jump up to:a b Chernow 2017, p. 674.
8. Jump up^ White 2016, p. 480-481; Chernow 2017, p. 674.
9. ^ Jump up to:a b White 2016, pp. 479, 481.
10. ^ Jump up to:a b c d White 2016, p. 481.
11. ^ Jump up to:a b c Brands 2012, p. 442.
12. ^ Jump up to:a b Smith 2001, p. 484.
13. Jump up^ McFeely 1981, p. 328; Smith 2001, p. 490.
14. Jump up^ Ackerman 2011, pp. 93–94.
15. Jump up^ Ackerman 2011, p. 96.
16. Jump up^ Ackerman 2011, pp. 96–98.
17. Jump up^ Ackerman 2011, pp. 148–149.
18. Jump up^ Ackerman 2011, pp. 172–173.
19. Jump up^ White 2016, p. 483.
20. ^ Jump up to:a b White 2016, pp. 483–484.
21. Jump up^ McFeely 1981, pp. 326–327.
22. ^ Jump up to:a b McFeely 1981, p. 327.
23. Jump up^ Brands 2012, p. 444.
24. ^ Jump up to:a b Smith 2001, p. 487.
25. ^ Jump up to:a b White 2016, p. 484.
26. ^ Jump up to:a b McFeely 1981, p. 328.
27. Jump up^ Ackerman 2011, p. 206.
28. ^ Jump up to:a b Ackerman 2011, p. 214.
29. Jump up^ Ackerman 2011, p. 220.
30. ^ Jump up to:a b c Smith 2001, p. 490.
31. Jump up^ The "Black Friday" Gold Scandal, 145 Years Ago
32. Jump up^ White 2016, p. 485.
33. ^ Jump up to:a b Adams 1891, p. 364.
34. Jump up^ 41st Congress, 2d session; March 1, 1870; James A. Garfield, chairman
35. Jump up^ Brands 2012, p. 445.
36. Jump up^ Brands 2012, pp. 445–446.
37. Jump up^ Smith 2001, p. 585.
38. Jump up^ Shefter 1992, p. 18.
39. Jump up^ PBS: Biography: Henry Adams

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