The First Usage of the Term Black Friday - The Crash of the U.S. Gold Market


The crash of the US gold market occurred on September 24th, 1869. The breakdown ensued as a consequence of successful conspiracy implementation committed by Jay Gold and James Fisk. They have achieved this through manipulation that had even managed to involve the president himself. Those were the times when the Ulysses S. Grant was at the head of the state. Another important person whose absence would maybe prevent the occurrence of the crash of the gold market was Abel Corbin, the husband of Virginia Grant, sister of the US president. He was a newspaper editor and a small-time speculator in the world of finance. Also, as the first recruited outsider, there was Daniel Adams Butterfield, a civil war general, and businessman with lack of experience.

In order to better understand the conspiracy, it is an absolute necessity to learn about the conspirators that implemented it.

The Conspirators

The base of conspiracy where it’s inventors Jay Gold and James Fisk. Besides, wish to earn immeasurable amounts of money, by all means, necessary, what they had in common was the fact that both of them were the directors of Erie Railroad. Some speculations point that the two of them knew each other from earlier but most of the historians believe that Jay and James got comfortable with each other as colleagues. It is then when they saw a reliable partner in the conspiracy that could easily make them the wealthiest people of their time.

Jay Gould


Jason Gould was born on May 27th, 1836 in Roxbury, New York. His father was a farmer but even as a little boy Jay knew that he wanted nothing to do with the family profession. When the father found out about the son’s attitudes he dropped him off near some school with 50 cents and a sack of clothes. His first job was bookkeeping at a blacksmith shop. Not a single year has passed and the owner had already given Jay an offer that implied half interest in the blacksmith shop. He was a natural talent for business. His next shot was tanning. He made partnerships with leading leather merchants and progressed forward. Unfortunately for Gould tanning business went to hell. His next stop was a speculative investment in the railroads. Eventually, that had gotten him a position as a director of the Erie Railroad together with his future conspiracy partner, James Fisk.



James Fisk


In the world of business, James Fisk was what we call the big guy. His wealth had got him a sack on nicknames like “Big Jim”, “Diamond Jim” or “Jubilee Jim”. He was a stockbroker and corporate executive. Fisk was born in the hamlet of Pownal, Vermont, in Bennington County in 1835. He didn’t like school and at some point, he ran away. Believe it or not, he joined the circus. After some time, he found a job as a hotel waiter and at the end, he inherited the fathers business. His father was an ordinary paddler but James applied what he had learned in the circus to his new profession and opened the door of growth. Later he became salesman for a Boston dry goods firm. Failures had led to Washington where he got a job to sell textiles to the government. His shrewd contracts during the civil war and cotton smuggling made his enormous wealth.

The Black Friday Conspiracy

First of all, it is important to point out that the breakdown occurred just a few years after the civil war has ended. The US was financially drained. There were large debts towards European banks which were more than happy to assists a so-called “Freedom War” with loans. In order to  preserve itself as credible and reliable in the eyes of banks, the US government had to pay the debts. That obligation led to selling gold from the treasury and that is what Jay and Jim decided to manipulate.

Also, in order to make for all non-economists easier to understand what was going on, here are some explanations of the terms that are regularly used in the market:

  • Cornering the market. To corner the market means to obtain a supply in the amount that is enough to set its price on the market. One of the famous definitions says that the cornering of a market is “having the greatest share without having a monopoly.”
  • A bull market. This is the market that is on the rise and because of that economically sound.
  • A bear market. This is the market receding market where all the stocks go down.
  • An ounce of gold. One ounce of gold weighted in grams is 28.35 grams.


The First Step – Get Tips About Government Plans on selling gold

The first step was to get close to the president. There was no better way to achieve that then to recruit Abel Corbin who was the husband of president Grant’s sister. Abel accepted his role. Together with Jay Gould, he approached Daniel Butterfield. Daniel was a civil war general without financial experience. After the war, he was given the position of the Assistant Treasurer of the United States. It was an easy task for conspirators to get an appointment and emerge with their offer that was 2000 dollars higher than the ex-general annual salary of 8000$. Since the secretary of the Treasury George S. Boutwell sold gold through Daniel it was expected from the ex-general to tip every time when he finds out that the state intends to sell. He agreed and conspiracy continued.

The Second Step – Socialize With the President

Socialize With the President

Now when they had a right guy for tips, it was time to approach the president. It had to look natural so it was on the Abel, known for his sweet talk, to provide them with an adequate situation. He did his duty successfully more than once organizing all kinds of mini-events at his mansion. There, the conspirator had the opportunity to put their influence on the president. Together with Abel Corbin, they would make a whole theater. Gould and Fisk would start an argument over the government sale of the gold pointing to a whole mountain of negativities that those actions were bringing to the US economy. Abel was constantly on their side firmly supporting all of their arguments. In the beginning, Grant was reserved. As the main argument of his approach, Gould was pointing out that the higher price of gold would reduce the value of the dollar which would allow farmers to sell their crops overseas. Eventually, the president fell under influence and order to the secretary of the treasury, George Boutwell to change current policy. The fact that shows the strength of influence that the conspirators have established over the president are Boutwell’s achievements. By selling large amounts of gold at lower prices and using the income to purchase back wartime bonds, Boutwell had reduced the national debt by $50 million. Despite his success, Grant sent him a letter in which he spoke of worry about farmers being hurt by lowering the price of gold. Also, the president was very explicit about his wish for the current policy to be changed. Boutwell thought that regardless of who will benefit government should not get involved in the market. However he didn’t want to go against president so he just did what he was told. Boutwell did all of his gold sales and bond purchases through Daniel Butterfield who successfully recommended him to share all his doings with the public. Boutwell informed the ex-general that semi-weekly September government gold sales are to be halted. This was the moment when Gould, through other brokers, started buying all the gold he could find on the market at an accelerated rate.

The Devastation of the Gold Ring

September the first was the day when Gould and Fisk had put their plot into motion. They purchased 1.5$ million in gold on the names of Corbin and Butterfield. The inventors of the plot would earn $15 000($263 000 in 2017) for every dollar rise in gold. By September 6, the price of gold had risen from $132.5 to $137 an ounce. The next day was the day of the startling reversal. Gould was shocked when the members of his pool sold the $6 million that they had earned during the buying frenzy. In one day the price of gold dropped from $137 to $134 an ounce. In just two days Gould lost more than $100 000. He turned to Fisk for help. Fisk arrived in NewYork on September 8th and helped his partner in a conspiracy to defeat the depression that took over him. He reminded Gould that he still had a gold in the amounts enough to fill an Olympic swimming pool. They started plotting new plans but they knew that if they were to start buying again the treasury would counter them by selling gold at an accelerated rate. Despite that fact, in the end, they agreed that on Friday they start buying the gold at a current high price and sell it even higher. However, Fisk feared that this act might provoke the president to step in and break the gold corner.

The Failed Bribery That Almost Stopped the Conspiracy

Right before these events occurred Gould had tried to bribe Grant’s personal secretary Horace Porter by offering him account worth $500 000. Despite being declined Gould had opened an account on the name of Porter. After that, Grant’s secretary wrote to Gould telling him that he wants nothing to do with him.

On September 12, Grant expressed his worries about Bulls and Bears of the gold market, to Boutwell. That, of course, got to Abel Corbin who then informed Gould who decided to send Grant a latter that will advise him not to sell gold. President was on the vocation when he received a letter on which he gave no answer to the messenger that brought it. When Porter, who was with him, heard what the letter was about, he told Grant about the Gould’s attempt to bribe him. The president had immediately understood what laid ahead. This happened on September 12.

The Grand Finale – Breaking the Corner

On September 20, Gould and Fisk started with the gold hoarding and price pumping. Two days later gold closed at $141 an ounce what meant that Gould and Fisk together earned around $60 000 000. On September 23 Grant and Boutwell agreed to break the gold cornet if the price continued to rise. This is exactly what happened the next day. On September 24, Friday, when the gold exceeded $160 an ounce, Grant ordered Boutwell to release $4 million in gold and buy $4 million worth of bonds. In a matter of minutes, the price collapsed from $160 to 138. The corner was broken and many had been dropped into bankruptcy.

The Investigation

The investigation was implemented thoroughly. Eventually, the president was released of charges and suspicions for any wrongdoings but there was a large number of those who believed that Grant’s administration had some kind of profitable illicit dealings. What Grant didn’t understand up until it was too late is that his appearances in the company of Gould and Fisk sent a message to Wallstreet that he approves the rising of gold price. These are the reasons that demolished the credibility of Grant’s administration. The biggest victims were, of course, the farmers. For example, wheat prices on the Chicago trade fell from $1.40 to $0.77. Gould and Fisk had bribed all with the price, bought the best lawyers and in the end managed to go unpunished. They remained wealth until the end of their lives. When Gould died his property was esteemed on over $70 million. Fisk, was killed by a jealous lover because of his romance with a certain lady. Grant was reelected.

Later in American history, there were similar attempts for market cornering but none of them were as big and as successful as the Black Friday Conspiracy. The crises lasted almost six months but in the end, everything got back to normal.

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