Gold Market Scam of 1869

While Europe was in upheaval what with france and Germany were in direct conflict the USA was toting the profits and losses of the divisive Civil War. Naturally carpetbaggers were all over the place and their schemes found the right climate under the Reconstruction program. Ulysses S. Grant was inaugurated as President of the USA like Dwight D. Eisenhover on the strength of his military acumen. On the same day of his elevation his opponent Robert E. Lee was breathing his last. So much for the background.
Enter two shady wheeler- dealers one of them is James Fisk Jr., who made his fortune selling fifty-three million dollars of watered down Erie Railway stock.The other was equally unscrupulous Jay Gould. Once they had struck a deal with Boss Tweed they were playing for very high stakes. Boss Tweed ran New York as though it were his personal fiefdom. His Tammany Hall ring had their finger in every pie. It was time for them to corner the United States gold market and it began in September, 1869.
In order to prevent Treasury from making difficulties Gould secretly enlisted the aid of his friend Abel R. Corbin who was married to President Ulysses S. Grant’s sister. He was hardly onto five months in office. President was certainly a military genius but naive about the intricacies of government finance. Corbin’s advice to keep the price of gold high sounded right since he explained that such an act would boost the nation’s economy. Grant gave his assent while Fisk and Gould went on a rampage cornering the gold market when the price was low.(On 2 September Gould began buying gold on a large scale; on 15 September, Fisk also began buying heavily and soon forced the price from $135 to $140.)
In late September the President realized his error. Immediately he ordered the Treasury to release the nation’s bullion reserve onto the market. Gold prices plummeted. The stock market crashed. It is known as Black Friday of 1869. Gould who was sufficiently warned in advance sold his gold in time and made an eleven million dollar profit. Don’t you believe when one tells you there is honor among thieves. Not in this case. Gould didn’t forewarn his partner who lost everything including even the shirt off his back.
Five days later sans gold but laden with plenty of names and dates Fisk went over to the NY Herald ready to tell all. The names included Gould, Corbin, assistant treasurer Daniel Butterfield and most explosive of it all,Grant himself. President Grant was vulnerable and the newspaper was in a dilemma. If Bennet ( who was Fiske’s drinking companion) didn’t publish a rival paper would soon get hold of it. His instinct told it was a scoop of a lifetime. If it went awry his position in the USA would be precarious.
He made his reporters thoroughly investigate and report. At last the Hearld published the news where the President’s role was down played and Bennet’s connection with Fisk was altogether deleted.
aftermath
In time of its publishing the newspaper tycoon Bennet escaped to Paris for the furore to die down.
It was while in Paris looking for another scoop that James Gordon Bennet Jr. hit upon the idea of sending Henry Morton Stanley a reporter under his pay to Africa and this would change his life altogether. His meeting Dr. Livingstone at Ujiji was sensational.
Jay Gould
During the Great Southwest Railroad Strike of 1886 he hired strikebreakers; according to labor unionists, he said at the time, “I can hire one-half of the working class to kill the other half.”There is an anecdote where this robber baron was fleeing from law and all his ill-gotten gains were in tact in his valise. He seemed to have told with a laugh,’Nothing is lost except honor.’
James Fisk
On the other hand Fisk died relatively young. He was shot by Ed. S. Stokes.
Fiske a married man had a relationship with Josie Mansfield a show-girl. Mansfield eventually fell in love with Fisk’s business associate Edward S. Stokes.
In a bid for money, Mansfield and Stokes tried to blackmail Fisk by threatening the publication of letters written by Fisk to Mansfield that allegedly proved Fisk’s legal wrongdoings. A legal and public relations battle followed, but Fisk refused to pay Mansfield anything. Increasingly frustrated and flirting with bankruptcy, Stokes shot and killed Fisk in New York city on January 6, 1872. Fisk gave a dying declaration identifying Stokes as the killer, and Stokes served four years of a six year prison sentence for manslaughter. Fisk was loved and mourned by the workingmen of New York and the Erie Railroad. During the Stokes trial, Fiske’s quick assistance to the victims of the Great Chicago Fire was remembered in a song, “Jim Fisk (He Never Went Back on the Poor)”.

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