On this day in New York · September 24, 1869
The Day They Cornered Gold and Wall Street Broke
Jay Gould and Jim Fisk tried to corner the entire nation's gold supply using the President's own brother-in-law as their inside man, and for one Friday morning it almost worked.
The facts
- Date
- Friday, September 24, 1869
- Location
- The New York Gold Exchange (the Gold Room)
- Treasury response
- Grant ordered Boutwell to release $4 million in gold
- Price collapse
- Gold fell from $160 to $138 within minutes
Jay Gould and James Fisk spent the summer of 1869 quietly buying up gold on the New York Gold Exchange, working through Abel Corbin, who happened to be married to President Ulysses S. Grant's sister, to keep the Treasury from selling gold and spoiling the squeeze. By September 22 the two speculators controlled somewhere around $50 to $60 million in gold between them, roughly three times what actually traded hands in the city. Grant caught on to the scheme and on Friday, September 24, 1869, ordered Treasury Secretary George Boutwell to sell $4 million in government gold. The price, which had climbed past $155 that morning, collapsed within minutes, gutting the corner and every broker who had bought in on the way up.
In their words
The day in the words of the people who were there. Every quote is verbatim, and every source links out so you can check it.
-
Mr. Corbin, I am undone if that letter gets out
Jay Gould, to Abel Corbin, as the scheme began to unravel in September 1869
Source: Wikipedia -
Within minutes, the price of gold dropped from $160 to $138 and Gould's and Fisk's gold corner was broken.
From the Wikipedia account of the September 24, 1869 gold panic
Source: Wikipedia
Why it still matters
Black Friday is why New York eventually got real financial regulation instead of just a bell on a trading floor: it's the story bankers and lawmakers pointed to for the next half century whenever someone tried to corner a market. It's also a reminder that having a direct line to the President has always been worth more on Wall Street than any amount of gold.
Sources
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