Gotham_ A History of New York City to 1898 - Edwin G. Burrows [728]
The treasury could easily break such a corner by selling some of its vast holdings in the market, instantly driving the price down. Gould, to prevent the newly installed Grant administration from intervening against him, convinced the president that a corner was in the national (and Republican Party’s) interest. If the price of gold went up, American farmers could more easily sell their wheat abroad; railroads would profit from the increased grain shipments; and farmers and railroads were key Republican constituencies. Q.E.D.
Grant agreed, and with the president on board, Gould and Fisk began buying gold. As their army of brokers drove the price steadily higher, howls of outrage reached the White House. Sensing impending doom, Gould began secretly selling gold, even while encouraging Fisk to keep buying and bulling its price. Bears, facing utter disaster, pleaded with the government to sell gold. On September 24, 1869, soon to remembered as Black Friday, crowds of businessmen and merchants facing ruin jammed New Street. As Fisk bought and Gould secretly sold, gold inched up, accompanied by shrieks from the bears, to 145, 150,155. Then, at noon, with brokers crumpling, transactions flying, and the crowd outside so enraged the militia was ordered into readiness, the government dumped gold on the market, sending the price plummeting. Slipping away from the chaos, Gould and Fisk holed up in their heavily defended Opera House headquarters while the reverberations rocked the city.
Scores of smaller dealers failed, one broker shot himself to death, and the market collapsed, threatening a full-scale panic. “Over the pallid faces of some men stole a deadly hue,” wrote the Herald, “and almost transfixed to the earth, they gazed on vacancy. Others rushed like wildfire through the streets, hatless and caring little about stumbling against their fellows.” One man who kept his head was Jim Fisk, who escaped ruin by the simple expedient of repudiating all his contracts and hiding behind Tammany-supplied judges.
Gould kept his head too but lost what was left of his reputation. The collapse of the Gold Corner didn’t precipitate a full-scale depression, but hundreds of businesses failed, and thousands of workers were laid off. They would remember Jay Gould, and the emerging national labor movement would be indelibly affected by this encounter with finance capitalism run amuck. Nor was the press pleased with the turmoil. The Times led a journalistic assault that fastened to Gould forever the character of a sinister and poisonous predator. New York City’s reputation suffered as well. Wartime gambling in the Gold Room had cast the metropolis in a baleful light; Gould’s escapade further blackened its image.
But the men most alienated by the mess Gould had made of the financial markets were the elite directors of conservative banking houses, particularly J. P. Morgan. Gould’s machinations distressed Pierpont both as a matter of business aesthetics and personal interest—his own firm of Dabney, Morgan, and Company was bruised by Black Friday—and in years to come he would dedicate himself to imposing his particular brand of order on the national economy.
THE WEST AND WALL STREET
From the West’s perspective, the differences between Wall Streeters were less compelling than their similarities, given that most bankers and merchants were determined to restore “hard money.” During the Civil War, the government had churned out greenbacks—paper money not exchangeable for gold—in such massive quantities that