Black Friday 1869: How Jay Gould and Jim Fisk Cornered the Gold Market

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In 1869 the public supply of gold in New York was only about $15 to $20 million, while the country ran on paper greenbacks that could not be exchanged for it. Railroad baron Jay Gould saw that a man with enough money could buy the whole supply and set the price. Only one thing stood in the way: the Treasury held roughly $100 million in gold, and Secretary George S. Boutwell was selling a few million every month. To corner the market, Gould had to get President Ulysses S. Grant to stop.

This episode traces the scheme from its first bribes to its collapse. Gould and his flamboyant partner Jim Fisk worked through Abel Corbin, the president's brother in law, bought an informant inside the Treasury, and pitched Grant on the idea that expensive gold would help Western farmers export wheat and corn. When Grant paused the sales, they bought contracts worth three times the city's supply. On Friday, September 24, 1869, the president struck back, and the panic that followed reached far beyond Wall Street.

• Gould paid assistant treasurer Daniel Butterfield $10,000, more than his $8,000 annual salary, to warn him the moment a government gold sale was ordered.
• Grant's secretary Horace Porter refused a half million dollar gold account, Julia Grant turned down an interest in bonds, and Grant sent back $60,000 worth of art and statues.
• The plot unraveled when a panicked letter from Corbin reached Grant during a game of croquet, and Grant had his wife write back demanding Corbin get out.
• Knowing the end was near, Gould quietly sold his gold while Fisk kept buying. The Treasury then released $4 million and the price fell from 160 to 133 within minutes.
• The stock market dropped 20 percent and wheat and corn lost nearly half their value. A congressional inquiry led by James A. Garfield cleared Grant, and neither Gould nor Fisk was ever convicted.