|Posted by Gilbert Stack on September 25, 2015 at 5:10 AM|
On this day (September 24) in 1869. Ulysses S. Grant broke the attempt by J. Gould and Jim Fisk to corner the gold supply in the United States. Fisk and Gould had been influencing Grant’s brother-in-law, Abel Rathbone Corbin, with very generous gifts to keep Grant from acting to lower the price of gold. On September 23, Grant figured out what his brother-in-law was doing and warned him to immediately get out of his gold speculations. Corbin immediately ran to Gould to tell him that Grant was on to them. Gould told him not to worry about it.
The next day, “Black Friday”, Gould began secretly selling off his reserves while his partner, Fisk, was still buying. Gold started at 142 and rose to 162. Other stocks began to fall in response as people tried to get in on the gold rally. Purchases were largely financed on margin.
In the meantime, Grant learned what was happening and ordered the Secretary of the Treasury to start selling gold and keep selling it until the corner was broken. The treasury quickly put $4,000,000 in reserves on the market. The price began to fall.
Legend has it that when Wall Street’s Trinity Church clock started striking noon the price of gold was $160 and by the time it finished striking the price was $138. Lots of people lost everything. One man committed suicide. The corner was broken.
Gould is thought to have earned around $10 million on the attempted corner. Fisk ended up repudiating his trades (the ones entered as gold was rising) claiming that since he hadn't written anything down on the transaction slips they weren’t binding. He spent a lot of the rest of his remaining years in court with men suing him for their money.