CHAPTER XX.
THE TRUE STORY OF BLACK FRIDAY TOLD FOR THE FIRST TIME.
THE GREAT BLACK FRIDAY SCHEME ORIGINATES IN PATRIOTIC MOTIVES.—ADVISING
BOUTWELL AND GRANT TO SELL GOLD.—THE PART JIM FISK PLAYED IN THE
SPECULATIVE DRAMA.-“GONE WHERE THE WOODBINE TWINETH.”—A GENERAL
STATE OF CHAOS IN WALL STREET.—HOW THE ISRAELITE FAINTED.-“WHAT ISH
THE PRISH NOW?”—GOULD THE HEAD CENTRE OF THE PLOT TO “CORNER”
GOLD.—HOW HE MANAGED TO DRAW AMPLE MEANS FROM ERIE.—GOULD AND FISK
ATTEMPT TO MANIPULATE PRESIDENT GRANT AND COMPROMISE HIM AND HIS
FAMILY IN THE PLOT.—SCENES AND INCIDENTS OF THE GREAT SPECULATIVE
DRAMA.
In the year 1869 this country was blessed with abundant crops, far in
excess of our needs, and it was apparent that great good would result
from any method that could be devised to stimulate exports of a part, at
least, of the surplus.
Letters poured into Washington by the thousand from leading bankers,
merchants and business men, urging that the Treasury Department abstain
from selling gold, as had been the practice for some time, so that the
premium might, as it otherwise would not, advance to a figure that would
send our products out of the country, as the cheapest exportable
material in place of coin, which, at its then artificially depressed
price, was the cheapest of our products, and at the same time the only
one undesirable to part with. So the Government decided to suspend gold
sales indefinitely.
Jay Gould and others, being satisfied that this was to be the policy of
the Administration, commenced at once buying large amounts of gold,
actuated, doubtless, by the purest of patriotic motives, namely, to
stimulate cotton and cereal exports. They succeeded in accumulating a
considerable amount of gold at prices ranging from 135 to 140, covering
a period of three months’ steady buying.
This was the honest foundation on which the great Black Friday
speculative deal was erected.
The eruption on Black Friday was really caused by the erratic conduct of
James Fisk, Jr., who actively joined the movement on Thursday, the day
before, and became wild with enthusiasm on the subject of high gold. He
began on Friday, early in the morning, to buy large blocks through his
own brokers, William Belden and Albert Speyer, running the price up very
rapidly.
The original syndicate consisted of Jay Gould, Arthur Kimber,
representing Stern Brothers, of London, and W. S. Woodward, of Rock
Island corner notoriety. The two latter, however, sold out their
interest to Gould, who directed the deal to the end, with the assistance
of several able and wicked partners. Their office was located in Broad
street, on the present site of the Drexel Building.
When the excitement arising from the above causes was at its height, I
sent a telegram to Secretary Boutwell, and one to President Grant,
representing the exact condition of affairs in Wall Street, and urging
the sale of gold without delay. I also prevailed upon General
Butterfield, the New York Sub Treasurer, and Moses H. Grinnell, the
Collector of the Port, to send similar telegrams, which they did, and
timely action was taken at once by an order coming to sell $5,000,000.
The moral effect of this Government action was to strike terror to the
holders of gold, and a general rush was made to sell out, thereby
driving down the premium from 160, in less than two hours, to 132. The
down grade produced an excitement quite equal to the early furore in the
up movement. Albert Speyer had from Fisk a verbal _carte blanche_ order
to buy, in million lots, all the gold he could get at 160; while he was
thus buying millions upon millions at this figure, on the opposite side,
and in other sections of the room, sales were freely made in moderate
amounts at 140, 145, 147 and 150, almost simultaneously; and even when
135 was reached, which was soon thereafter, Speyer still kept on bidding
160 for a million at a time, making one of the wildest and most
ludicrous spectacles ever witnessed among men not idiots. Fisk
afterwards repudiated the contracts made on his account by Speyer &
Belden, simply denying having given the orders, and as they were not in
writing, they could not well be proven, hence both brokers failed,
throwing immense losses upon an innumerable number of others. Quite a
noted firm sold Speyer some of his million lots, which they bought back
at 140, being satisfied with the profit of 20 per cent.; when they had
finished buying, the price instantly broke to 132, and the announcement
of Speyer’s failure, which was made before the close of the day, caused
them also to fail, as well as half the members of the Gold Room. Owing
to the serious complications prevailing and the disaster being so
widespread, it was found impossible to continue the clearances through
the Gold Bank, and the Governing Committee of the Gold Room were at once
convened, and passed a resolution to suspend all dealings in gold for
one week, in order to enable the members to adjust their difficulties
and differences between themselves privately. The Gold Bank also
suspended business in the meantime. While Albert Speyer was vigorously
buying and continuing to bid 160 for one million after another, the
clique were as actively engaged in selling all the market would take at
ten points less, and also busy making private settlements with the
shorts.
As the transactions were purely phantom in their nature, the great
parties in the speculative contest did not really lose much. Contrary to
popular opinion about such transactions, they did, virtually, incur
heavy losses, but in one way or another they managed to evade them.
Gould’s losses were estimated at over four millions. Fisk’s were equally
large, but he repudiated all of them. Others were heavily saddled,
however, with the burden which he should have borne.
Importing merchants were among the greatest sufferers, and a large
number of them were forced to cover at high figures.
The suspension of the Gold Board caused many important failures. Private
settlements were made during a period of sixty days following, in many
instances on the basis of a compromise.
When Fisk heard that Secretary Boutwell had ordered gold sold, he
exclaimed that it would knock spots out of phantom gold, and send him
and others with their long stuff “where the woodbine twineth.” The full
effect of the disaster became more fully realized when the Gold Board
and Gold Bank suspended and the numerous large failures were announced;
then it almost seemed that a general state of chaos reigned, and how to
unravel the complications was the problem to be solved. No one that had
any connection with gold dealings during the eventful day could
positively tell how they actually stood, or how to estimate their losses
or gains; such was the uncertainty as to future results, and the doubt
as to who was, and who was not, going to pay the differences due. The
Board Room was crowded almost to suffocation, and the scene just prior
to its close partook of the appearance of Bedlam let loose; in fact, it
had not been much different during the entire day. Late in the
afternoon, a formidable body of enraged sufferers assembled at the doors
of Smith, Gould & Martin’s office, and many and boisterous were the
threats that were indulged in against the members of the firm, in
consequence of which a police guard was detailed for their protection.
The gold furore brought many Israelites to Wall Street, who since, by
their numbers and natural shrewdness, have become quite formidable in
our midst.
One of them, being very long of the precious metal, on its break from
160 to 140, fainted; water was soon obtained to bathe his feverish brow,
and rubbing was also adopted. When, finally, he had sufficiently
recovered to raise his head and open his eyes, looking all around he
said: “What ish the prish now?” Upon finding it still lower, he closed
his eyes again, and fell into another swoon. He was finally carried from
the Gold Room a sick and ruined, but a wiser Hebrew, and is now in the
“ole cloe” business on the East side.
This is the history in brief, but the scenes and incidents of that day
would furnish material for an interesting volume.
Although I am not much given to the sensational, I have collected a few
of the leading events in detail, which I think are worth putting in
permanent form, if I may presume that this book itself may happily
partake of that character.
The inside history of the conspiracy to put up the price of gold is also
full of interesting material, and shows how deeply laid the scheme was
to take advantage of the circumstances and of the feeling which existed
in favor of stimulating our exports at the time. I shall, therefore,
give an epitome of the salient points behind the scenes of the great
speculative plot, and the bold attempt made to involve President Grant
and his family in the conspiracy.
As I have intimated, Jim Fisk, Jr., or Jim Jubilee Junior, as he was
then popularly called, was eventually put forth as the active member of
the manipulating coterie. The clique made very good use of him, also, at
intervals during the period they were concerting their plans.
Fisk had originally been a peddler in New England, as his father had
been. He appeared in Wall Street a few years previous to the great gold
conspiracy as one of the confidential men of Daniel Drew. Having shown
that he was too sharp for some of the people in the broker’s office
where Mr. Drew made his headquarters, he received a polite hint that his
presence there was undesirable. Mr. Fisk then opened an office of his
own, and united his speculative fortunes with those of Mr. William
Belden. The name of the firm was Fisk & Belden. It was of but short
duration. It seems that they had difficulty in finding bankers to
accommodate them to the extent required, and they closed up the
business. But though Fisk failed of success in this instance as a
broker, his resources were not by any means exhausted. He made himself
generally useful to Mr. Drew, who still adhered to him.
As the result of this friendship and his own smartness, in a short time
afterwards Mr. Fisk was elected to the directory of the Erie Railroad
Company, and Mr. Drew, who had forwarded his interest in that direction,
was left out. This is an instance of the way Fisk made the best use of
his friends.
As the result of Fisk’s election to the Erie Board, forty thousand
shares of new stock were issued. Bold attempts were made to gobble up
other railroads through the same instrumentality. Fuller information on
these matters is given in my chapters on Drew, Gould, and the struggle
with Vanderbilt.
Fisk began to be considered a universal genius at that time, and had
acquired the sobriquet of Prince of Erie. Though he had no money to
operate with when he made his debut in Wall Street, soon after this
large issue of Erie stock, he began to show signs of wealth very
rapidly. He had the reputation of being the fortunate owner of several
railroads and steamboats, an opera house, at least one bench of judges,
an unlimited number of lawyers and a bevy of ballet girls.
The Head Centre of this gold conspiracy needs no introduction here, as I
have attempted to do him ample justice in another chapter. He was also
the power behind the throne in Erie as well as in the Gold clique. He
pulled the wires while Fisk was the imposing factotum who was exhibited
to an admiring public. He managed the courts, the judges and the
lawyers, while Fisk got the reputation of doing this fine work, but was
simply the mechanical executive. He had made himself solid with the
Legislature also, and had acquired a hold on Erie that enabled him to
use that property just as he pleased for his own personal benefit,
ambition and purposes.
Erie was a mighty power at that time, with a wonderful leverage for
raising money. When cash was needed to purchase another railroad, a
legislature or a court, all that was necessary was to sell a few hundred
thousand of Convertible Bonds and turn them into Erie shares. Mr. Gould
was thus fortified with ample means of raising money on call at the time
he played the heavy role in the events which culminated in the disaster
of Black Friday.
Though the circumstances at that time were all in favor of success in
such a plot, it required a mind with great grasp and wonderful powers of
generalization to take advantage of all the bearings of the situation,
and to utilize everything toward the great end in view. Gould did his
work as chief of the conspiracy with rare tact and marvellous sagacity.
A resume of the conspicuous points in the situation and the plot will
make this clear.
The supply of gold in the New York market then did not exceed 25
millions. The Government held less than 100 millions, and about
one-fourth of this was in the form of special deposits represented by
gold certificates, part of which were deposited in the banks and the
remainder circulating throughout the country. Gold was then being sold
by the Treasury at the rate of a million a month, in accordance with a
plan that had been adopted as the best financial policy, both for the
administration and the prosperity of the country. This had always a
tendency to keep the price down, but on account of the circumstances
briefly related in the beginning of this chapter, this policy of selling
gold, owing to our commercial relations, was no longer considered for
the best interests of the country, and Mr. Boutwell, with his coadjutors
in the Treasury, were bound to give ear to the opinions of the bankers
and business men in the interest of our export trade.
Although the policy of stopping the sale of gold had been agreed upon in
deference to the views of the best financiers of the country, yet Mr.
Gould and his fellow strategists thought it was best to make assurance
doubly sure on this point, in order that nothing might stand in the way
of the great speculative intrigue, to get a “corner” in gold. President
Grant was conservative on the subject. The conspirators, therefore,
conceived the design of arranging things so that Secretary Boutwell
could not depart from this policy, no matter what emergency might arise.
This bold and wicked strategy could only be successful by first getting
President Grant convinced that the theory of stopping the gold sales was
the only commercial salvation for the country in the then condition of
business stagnation and the possible panic threatened. The theory was
then to impress him with the necessity of giving Secretary Boutwell an
absolute order not to sell gold, and afterwards to fix things so that it
would be impossible for the President to revoke that order until the
brilliant speculative purposes of the clique in cornering gold should be
accomplished.
The scheme was but little short of treason, regarded from a patriotic
point of view, and it is very questionable if the perpetrators would
have stopped short of this dastardly act, had they not been convinced
that their purpose was fully compassed by a method less villainous and
shocking. It was considered indispensable by the conspirators, for the
consummation of their plans, that Grant should be got out of the way by
some means or other. Fortunately for him, and for the honor of the
nation, the plan succeeded without the necessity of offering him any
violence.
Before explaining how this was done it is necessary to describe briefly
a few of the preliminary events which formed a portion of the plot.
It was arranged that General Grant should accompany a party, one
beautiful evening in the middle of June, who were going to attend the
great Peace Jubilee of Patrick Sarsfield Gilmore in Boston. Jim Fisk did
the executive work in the arrangement. There was a fine champagne supper
on board the Boston boat, and several gentlemen were present who were
thoroughly conversant with financial questions, and could talk glibly on
the state of the country. The subject of exports and the policy of
stopping the sale of gold were thoroughly discussed. It was a feast of
reason, and those who have imagined that it was all flow of soul, on
that festive occasion, do very scant justice to the intelligence that
was at the bottom of the deep design of the nocturnal excursion, planned
by Gould, Fisk & Co. General Grant was an eager listener to all that was
said on the most interesting subject of that day, but his mind, it would
seem, was not then thoroughly made up that the best policy for the
prosperity of the country was to stop the sale of gold. He was undecided
on that point, and it required well directed reasons to convince him.
Mr. Gould observed this and foresaw what was necessary to be done. The
drift of the conversation, when this point was brought clearly out, was
very succinctly described by Mr. Gould in his testimony before the
Garfield Investigating Committee. He said: “The President was a
listener. The other gentlemen were discussing. Some were in favor of
Boutwell’s selling gold, and some were opposed to it. After they all
interchanged their views, some one asked the President what his views
were. He remarked that he thought there was a certain amount of
fictitiousness about the prosperity of the country and the bubble might
as well be tapped in one way as the other. That was the substance of his
remark. He asked me what I thought about it. I remarked that I thought
if that policy was carried out it would produce great distress and
almost lead to civil war; it would produce strikes among the workmen,
and the workshops, to a great extent, would have to be closed; the
manufactories would have to stop. I took the ground that the Government
ought to let gold alone, and let it find its commercial level; that, in
fact, it ought to facilitate an upward movement of gold in the fall. The
fall and winter is the only time that we have any interest in. That was
all that occurred at that time.”
It may be necessary to observe that I am merely quoting Gould from the
report, and am not by any means responsible for his confusion of ideas
and grammar.
This is sufficient to show how ably Mr. Gould played his part in
attempting to get the President into the proper frame of mind to enable
him to endorse a policy so vital to the interests of the country and to
the success of the gold clique.
“I took the ground,” says Gould, “that the Government ought to let gold
alone and let it find its commercial level.”
This reference to “its commercial level” is rich, coming from the
head-centre of the plotters who wanted to put the article up to 200.
Then, in another afterthought, he says: “It (the Government) ought to
facilitate an upward movement of gold in the fall.”
How artfully insinuating was this suggestion in the interest of our
foreign commerce! It showed clearly the power the man possesses of
rising to the patriotic height of the occasion. This is a characteristic
of Mr. Gould that few people know how to appreciate at its true worth.
It has stood out conspicuously in his character in many other
exigencies. It reminds one of the unkind but vigorous remark of the
famous old English critic, Dr. Samuel Johnson: “Patriotism, Sir,” said
the old cynic, “is the last refuge of a scoundrel.”
About the time the above events were transpiring, the Assistant
Secretary of the Treasury, Mr. H. H. Van Dyck, resigned his office in
this city. Mr. Gould’s chief ambition at that time was to name his
successor, in order that he might be able to control the Treasury when
the time to get a “corner” in gold should be ripe. Mr. Abel R. Corbin
came in quite handy at this juncture to help to further the designs of
Mr. Gould. He was a man of fair education and considerable experience
both in business and politics. He had been a lobbyist in Washington for
some years. He was well informed on financial matters, a pretty good
writer, and could “talk like a book.” His wife was a sister of Mrs.
Grant, and he had good opportunities for reaching the Presidential ear,
which he employed to the best advantage.
A gentleman named Robert B. Catherwood, who was married to a
step-daughter of Mr. Corbin, was approached by Gould and Corbin on the
subject of the assistant-treasuryship. They were anxious that Mr.
Catherwood should take the office, and told him he could make a great
deal of money in a perfectly legitimate manner if he were once
installed.
So Mr. Catherwood stated in his testimony before the Investigating
Committee, but he adds, “My ideas differed from theirs in what
constituted a legitimate manner, and I declined the office.”
The office then sought another man in the person of General Daniel
Butterfield. He received the intimation of his appointment in a very
different spirit from Mr. Catherwood, showing that he was fully equal to
the occasion. He wrote a letter to Mr. Corbin thanking him kindly for
the offer, saying that he was under numerous obligations to him, and
expressing a hope that he would be eminently successful in his
undertaking. General Butterfield received his commission in due course.
This made perfect another link in the chain of Mr. Gould’s speculative
design, as he supposed. It made Corbin “solid” with Gould also, a
position which they both highly appreciated. Mr. Gould paid the
following tribute of admiration to the true value of Corbin in the
enterprise: “He was a very shrewd old gentleman. He saw at a glance the
whole case, and said he thought it was the true platform to stand on;
that whatever the Government could do legitimately and fairly to
facilitate the exportation of breadstuffs and produce good prices for
the West, they ought to do so. He was anxious that I should see the
President, and communicate to him my views on the subject.” Corbin
talked with Grant until he received a positive assurance that Boutwell
was not to sell any more gold. At a meeting in Grant’s house, where
Gould and Corbin were present, the President said: “Boutwell gave an
order to sell gold, and I heard of it, and countermanded the order.”
It was not until Gould had received positive assurance from the
President’s own lips, that he considered his scheme perfect. But the
links of this strategic chain were now nearly all forged. The bankers
and merchants were largely in his favor through commercial necessity,
the Sub-Treasury was “fixed,” as he thought, and the Executive fiat had
placed the Treasury of the United States itself where it could not spoil
the deal if Grant did not change his mind. There were reasons, of
course, to apprehend that he would do so in case of an emergency; for he
never was privy to the scheme, no matter what his traducers and
political enemies may have said.
To ensure perfect safety, then, Grant must be put out of the way
temporarily. This was the crowning effort of the conspirators. After the
Boston Peace Jubilee, this Cabal spent the remaining part of the summer
in maturing its designs. Large enterprises of this nature always require
time and patience. I am told that “Billy” Porter, “Sheeny” Mike and
other eminent burglars will work assiduously from six to twelve months
studying all the ins and outs of a bank or other financial concern
before coming to the point of using the “jimmy,” blowing the safe or
chloroforming the janitor.
It seemed necessary that all the members of the Cabal should be fully
acquainted with the combination to Grant’s purposes as regarded his
orders to Boutwell, and that his ideas should remain fixed on the theory
of increasing exportation for the country’s safety. Accordingly it was
arranged that Jim Fisk should visit the President at Newport, where he
was on a visit, some time about the middle of August, a month or so
prior to Black Friday. It would seem that Grant at this date was still
wavering, and adhering to his policy of selling gold in spite of the
order which he had given Boutwell. He may have been suspecting that the
anxiety of Gould, Corbin & Co. for the prosperity of the country was not
altogether genuine. The necessity of bringing further pressure to bear
upon him was therefore clearly manifest.
Referring to the interview at Newport, Fisk said: “I think it was some
time in August that General Grant started to go to Newport. I then went
down to see him. I had seen him before, but not feeling as thoroughly
acquainted as I desired for this purpose, I took a letter of
introduction from Mr. Gould, in which it was stated that there were
three hundred sail of vessels then on the Mediterranean, from the Black
Sea, with grain to supply the Liverpool market. Gold was then about
thirty-four. If it continued at that price, we had very little chance of
carrying forward the crop during the fall. I know that we felt nervous
about it. I talked with General Grant on the subject and endeavored, as
far as I could, to convince him that his policy was one that would only
bring destruction on us all. He then asked me when we should have an
interview, and we agreed upon the time. He said: ‘During that time I
will see Mr. Boutwell, or have him there.’”
The President was carefully shadowed after this by the detectives of the
clique, and great care was taken to throw men across his path who were
fluent talkers on the great financial problem of the day, the absolute
necessity of stimulating the export trade and raising the premium upon
gold for that patriotic purpose. In this way, President Grant began to
think that the opinion of almost everybody he talked with on this
subject was on the same side, and must, therefore, be correct.
About the 1st of September it was considered that the opinions of the
President had been worked up fairly to the sticking point, and Gould
bought $1,500,000 in gold at 132½ for Corbin. Gould, however, was timid
in his purchasing at first, as he had heard that a number of operators
who were short of gold were making arrangements to give Secretary
Boutwell a dinner. On further assurances from Corbin that the President
had written Boutwell to sell no gold without consulting him, Gould
prepared to go ahead with the execution of his great scheme. Nothing
remained to be done in the completion of the plot except to stow away
the President in a place of safety until the financial storm should blow
over.
Things were so managed that the President was placed in a position that
his honor was seriously in danger of being compromised, yet so ably was
the matter engineered that he was perfectly unconscious of the designs
of the plotters.
He was prevailed upon to go to a then obscure town in Pennsylvania,
named Little Washington. The thing was so arranged that his feelings
were worked upon to visit that place for the purpose of seeing an old
friend who resided there. The town was cut off from telegraphic
communication, and the other means of access were not very convenient.
There the President was ensconced, to remain for a week or so about the
time the Cabal was fully prepared for action.
Sometime about the period of the President’s departure for Little
Washington, Fisk bought seven or eight millions of gold. Gould then said
to Fisk: “This matter is all fixed up. Butterfield is all right. Corbin
has got Butterfield all right, and Corbin has got Grant fixed all right,
and in my opinion they are all interested together.”
This was patriotism with a vengeance. Just think of the audacity of it!
Gould enters into a scheme to place the President in a position where he
could not interfere with the plan of getting a “corner” in gold, and
then he turns around and accuses the first Magistrate of the Republic
with being privy to a plot that was calculated to create a panic, and
cause widespread disaster in business circles, and render him an object
of universal contempt.
Gould and Fisk, through Corbin, also attempted to compromise Grant’s
family, as well as his private Secretary, General Horace Porter. This
intention was fully disclosed through the interview of Fisk with Corbin.
Fisk testified: “When I met Corbin he talked very shy about the matter
at first, but finally came right out and told me that Mrs. Grant had an
interest; that $500,000 in gold had been taken at 31 and 32, which had
been sold at 37; that Mr. Corbin held for himself about two millions of
gold, $500,000 of which was for Mrs. Grant and $500,000 for Porter. I
did not ask whether he was General or not. I remember the name Porter.
This was given out very slowly. He let out just as fast as I did when he
found that Gould had told me about the same thing. I said: ‘Now, I have
had nothing to do with your transactions in one way or the other. We
have embarked in a scheme that looks like one of large magnitude. Mr.
Gould has lost as the thing stands now. It looks as if it might be a
pretty serious business before getting out straight again. The whole
success depends on whether the Government will unload on to us or not.’
He said: ‘You need not have the least fear.’ I said: ‘I want to know
whether what Mr. Gould told me is true. I want to know whether you have
sent this $25,000 to Washington, as he states?’ He then told me that he
had sent it, that Mr. Gould had sold $500,000 in gold belonging to Mrs.
Grant, which cost 32, for 37 or something in that neighborhood, leaving
a balance in her favor of about $27,000, and that a check for $25,000
had been sent. Said I: ‘Mr. Corbin, what can you show me that goes still
further than your talk?’ ‘Oh, well,’ the old man said, ‘I can’t show you
anything, but,’ said he, ‘this is all right.’ He talked freely and
repeated: ‘I tell you it is all right.’ When I went away from there, I
had made up my mind that Corbin had told me the truth.”
An attempt was made to prove, before the Garfield Committee, that a
package containing $25,000 was sent to Mrs. Grant through the Adams
Express Company, but expert testimony failed to decide whether the
amount was that or $250, as the two noughts at the extreme right were
crowded into the cents column, and it was difficult to determine whether
or not a very light “period” was placed between them and the “$250.”
The design of the clique was manifest, however, to implicate the family
of the President in some way or other, in order that they might make use
of the Executive influence to help accomplish their great speculative
purpose. But as the Garfield Committee truly said in its report: “The
wicked and cunningly devised attempt of the conspirators to compromise
the President of the United States or his family utterly failed.”
The scheme might have succeeded if Fisk had been possessed of the
coolness and penetration of his partner, but his impetuosity, anxiety
and enthusiasm aroused suspicion and partially spoiled the plot.
Fisk was so eager to be satisfied that Grant was all right that he
overdid the thing by urging Corbin to write Grant a letter to stand firm
and not to permit the Treasury to sell gold under any consideration. The
outcome of this afforded clear proof, if any were wanting, that Grant
had no guilty knowledge of the base purposes for which he was being
used. Fisk had this letter from Corbin sent by a special messenger from
Pittsburgh, who rode twenty-eight miles on horseback, and delivered it
in person to the President. He read the letter, and had his suspicions
at once aroused. He said laconically to the messenger, “It is
satisfactory; there is no answer.” He began to see through the game, and
at once desired Mrs. Grant to write to Mrs. Corbin requesting her
husband to have nothing more to do with the Gould-Fisk gang.
Mrs. Grant wrote to Mrs. Corbin to say that the President was greatly
troubled to learn that her husband had been speculating in Wall Street,
and that she should desire him to disconnect himself immediately with
the party who were attempting to entrap the President.
Corbin hastened to obey the mandate from Little Washington. He was
greatly agitated, but the ruling passion of avarice was strong; in
bidding Gould farewell, and before taking his final adieu of the clique,
he requested the arch plotter to hand him over his share of the profits.
Referring to this incident, Gould said: “I told him I would give
$100,000 on account, and that when I sold, if he liked, I would give him
the average of my sales. I did not feel like buying any gold of him
then.”
This was the denouement of the plot against the President, who
immediately hastened to big Washington.
Now, let me again ask the reader to turn his attention for a moment to
the concluding scenes in the speculative drama in Wall Street on Black
Friday. How the clique tried to manipulate Assistant-Secretary
Butterfield was kept as profoundly secret as possible, and as it turned
out, he did not have as much power over the events of that great day as
was expected. When somebody charged Fisk with tapping the telegraph
wires, however, to obtain information from the Government, he replied:
“It was only necessary to tap Butterfield to find out all we wanted.”
This was very likely a vain boast of Fisk.
On Wednesday, the 22d September, two days preceding Black Friday, the
clique, it is believed, owned several millions more gold than there was
in the city outside the vaults of the Sub-Treasury. Belden bought about
eight millions of gold on that day, while Smith, Gould, Martin & Co.
were also heavy purchasers. The clique held a caucus in the office of
William Heath & Co., in Broad street, and concluded that it had gold
enough to put the price to 200, if it could carry the gold without
lending and compel the “shorts” to purchase. But the idea of finding a
market for over thirty millions of gold was also a gigantic problem, and
they felt the risk of being ground between the upper and the nether
millstones of their scheme.
On the morning of Thursday another council of war was held in the office
of Belden & Co., on Broadway. At this meeting, Gould, Fisk, Henry N.
Smith and William Belden were present. The proceedings of this meeting
were kept a profound secret, but one result of it was that Belden gave
his clerk the famous order to put gold to 144 and keep it there. On that
day Belden purchased about twenty millions of gold, the price opening at
141½ and closing at 143½.
The chiefs of the Cabal had another private meeting up town that
evening. The great question of closing up the transactions on the
following day was the chief topic of discussion. These operators held
contracts for over $100,000,000 in gold. Gould said that the “short”
interest was $250,000,000. The total amount of gold in the city did not
exceed $25,000,000, and the difference between this and the aggregate
amount of the contracts of the clique was the enormous amount that would
have to be settled in the event of a “corner.”
Fisk proposed that the clique show its hand, publish the state of
affairs, and offer to settle with the shorts at 150. His plan was
rejected by his brother conspirators.
On the morning of the fatal day, Belden and William Heath had an early
breakfast together at the Fifth Avenue Hotel, and repaired immediately
to their offices. Belden announced that gold was going to 200. “This
will be the last day of the Gold Room,” he added. Moved by Belden’s
threat, a large number rushed to cover. In the language of Henry N.
Smith, “They came on with a rush to settle.” He was settling in the
office of Smith, Gould & Martin, at 150 to 145, while Albert Speyer,
acting as broker for Fisk and Gould, was bidding up to 160 for a million
at a time. It was only when the price came down to 133 that Speyer
realized the humorous absurdity of his position. He had then bought 26
millions since morning at 160.
A voracious demand for margins about midday brought the work to a
crisis. The scene at the office of Heath was indescribable when Belden
went there to see Gould and his confederates, to find out what was to be
done next with the frenzied purchasers. An eye-witness thus describes
the scene at Heath’s office: “I went outside while Belden went in. I
walked up and down the alley-way waiting for him to come out. Deputy
sheriffs, or men appearing to be such, began to arrive and to mount
guard at Heath’s office to keep out visitors. After waiting a prodigious
long time, as it seemed to me, Jay Gould came creeping out of the back
door, and looking round sharply to see if he was watched, slunk off
through a private rear passage behind the buildings. Presently came
Fisk, steaming hot and shouting. He took the wrong direction at first,
nearly ran into Broad street, but soon discovered his error, and
followed Gould through the rear passage. Then came Belden, with hair
disordered and red eyes, as if he had been crying. He called: ‘Which way
have they gone?’ and, upon my pointing the direction, he ran after them.
The rear passage led into Wall Street. At its exit the conspirators
jumped into a carriage and fled the Street.”
They did not fly the Street, however, but went to the Broad street
office of Smith, Gould & Martin, where the crowd assembled, evidently
with riotous intent, apparently bent upon an application to Judge Lynch
for justice; and had any of the gentlemen appeared outside the confines
of the front wall, the chances were that the lamp-post near by would
have very soon been decorated with a breathless body. To ensure their
safety inside, however, a small police force kept guard outside, which
made the barricade complete. These gentlemen remained under this shelter
until the small hours of the morning, busily endeavoring to find out
where they stood in the result of the gold deal, and the more they
pondered over it, the greater grew the doubt in their minds whether they
were standing on their heads or their heels.
Although the Black Friday “corner” was a temporary calamity, perhaps it
was worth all it cost, in teaching us a useful lesson in financial and
speculative affairs. In my chapter on “Panics, and How to Prevent Them,”
I think I have made several points clear that can be utilized by
financiers, speculators and investors to advantage, in ease of an
impending panic or “corner.”
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