Due to the manipulations of Fisk and Gould price of gold plummeted on the New York Gold Exchange on September 24, 1869. Many people were financially ruined and the infamous day was referred to as Black Friday.
Black Friday Scandal History for kids: President Grant and the Scandals of his
Black Friday Scandal Facts for kids
September 24, 1869: It was the first scandal to taint the Grant administration.
It was also referred to as the Gold Panic and the Fisk/Gould scandal
The Civil War and the Reconstruction Era had proved extremely costly and the United States government issued a large amount of paper money "greenbacks" that was backed by credit rather than gold.
Financial speculators believed that the U.S. Government would buy back the "greenbacks" with gold.
A group of financial speculators, led by Fisk and Gould, attempted to corner the gold market on the New York Gold Exchange by buying massive quantities of gold and gold futures, sending the price of gold sky high.
The financial speculators then intended to sell everything at an enormous profit.
Gould and Fisk evolved a plan to gain influence with President Grant. They recruited Grant’s brother-in-law, a financier named Abel Corbin, into their group of gold speculators.
Abel Rathbone Corbin (1808 – 1881) was an American financier, newspaper editor and the husband of Virginia Grant who was the sister of President Grant.
The next part of the plan was to stop the US Government from buying gold.
Abel Corbin supported the syndicates plan arguing against the immediate government sale of gold
Abel Corbin then convinced President Grant to appoint General Daniel Butterfield as assistant Treasurer of the United States.
General Daniel Butterfield had agreed to tip the syndicate off when the government intended to sell gold.
August 1869: Fisk and Gould began buying massive amounts of gold causing gold prices to rise and stocks to drop.
September 20, 1869: Gould and Fisk then started hoarding gold forcing gold prices even higher and Gould and Fisk then started selling their gold at a huge profit.
September 24, 1869: The value of gold had reached a figure that was 30% higher than when President Grant had begun his presidency.
President Grant realized what was happening, that he had received bad advice from his brother-in-law and ordered the government to sell $4 million in gold.
The influx of government gold hit the market and the gold premium plunged within minutes.
Investors rushed to sell their investments and shares, and many of them, including Abel Corbin, were ruined.
James Fisk and Jay Gould escaped significant financial harm
There was a subsequent investigation by Congress chaired by James A. Garfield. Virginia Corbin and First Lady Julia Grant were not called to testify. General Daniel Butterfield was removed from his post. , Although President Ulysses Grant was never a target of investigation but his reputation was badly tarnished.
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