I’m so thrifty, I’ve been known to almost cause crashes by jumping into a busy street to pick up a penny. Naturally, I enjoy saving a buck. I also enjoy sleep, which is one of life’s greatest satisfactions. That presents me with a tormenting dilemma when Black Friday early-bird sales roll around. Which pleasure do I indulge, and which do I deny? (Spoiler alert: The one I pick usually involves snoring.)
I never really cared for the name Black Friday. It gained popularity in the late 1980s and early 1990s, chiefly because it’s so much more compact than the clunky “Day After Thanksgiving.” But to students of history, it goes deeper. The phrase conjures up an actual day that brought financial disaster to the United States. Since it happened exactly 150 years ago this fall, now is a good time to revisit the original Black Friday.
Ulysses Grant was riding high in 1869. The Appomattox victor was a hero in the North and had cruised to an easy presidential win in 1868. With the wounds of the Civil War and Andrew Johnson’s impeachment still fresh, many hoped better times were to come.
And maybe they would have, if two notorious con men hadn’t cooked up a scheme to become outrageously rich.
Jay Gould and James Fisk typified the robber barons of the Gilded Age. Think of them as 19th-century Gordon Gekkos from the movie Wall Street. They likewise believed greed was good — provided the loot went into their pockets alone. They were greedy on a scale that would have made Gekko gasp.
They set out to corner the gold market, and they would do it through insider trading, thanks to Abel Corbin.
He was a perpetual hanger-on, always on the fringes of business and politics but never in the heat of the action. He had dabbled in real estate and newspaper editing until a spectacular bit of good fortune came his way on May 13, 1869. That day, he married Virginia Grant, the new president’s younger sister. Gould and Fisk saw him as an entrée to the White House. Here’s what they planned.
The U.S. had run up a huge debt during the Civil War. (Uncle Sam had gone from being $64 million in the red in 1860 to $2.8 billion in 1869, or about $53 billion today.) Grant wanted to gradually pay down that debt with monthly sales of government-owned gold.
The general may have been a whiz on the battlefield, but he was a poor judge of character. His new brother-in-law arranged for the two swindlers to meet Grant at social functions. They pumped the unwitting president for details about upcoming Treasury Department gold sales while simultaneously lobbying him to limit the amount sold. Then they began secretly buying all the gold they could, which naturally drove up the price.
Gould and Fisk did a good many more sleazy things, but time doesn’t permit me to go into all of them. Suffice it to say they were rotten to the core and played the unsuspecting Grant like a violin.
Until Grant found out what they were up to. Then it hit the financial fan.
The furious general launched a massive counterattack. When gold hit $155 an ounce on Friday, Sept. 24, Grant ordered $4 million (more than $75 million in 2019 dollars) unloaded in one gigantic sale. In a matter of minutes, the price dropped to $138, wiping out Gould and Fisk’s corner. It also ruined Corbin, who lost everything in the large loan he had taken out to buy the precious metal. (One can’t help wondering what Christmas 1869 was like for the extended Grant family.) It was called Black Friday because so many fortunes were lost on that single day.
But the financial carnage didn’t stop there. Black Friday triggered panic selling on Wall Street, which in turn led to several months of bad financial times. The country avoided a depression, but just barely.
Worse for Grant, his administration acquired a taint from which it never fully recovered. Although he went on to win reelection in 1872 (and even came incredibly close to getting a third term in 1880), the whiff of scandal lingered in his White House.
As I said, Black Friday doesn’t conjure up pretty holiday images for those who know what happened 150 years ago. To a history lover’s ear, it still smacks of greed gone wild rather than great deals on stocking-stuffers for the kids.
Which just helped me make my decision. I’ll be hitting the snooze button at dawn this Friday. Again.
J. Mark Powell (@JMarkPowell) is a contributor to the Washington Examiner’s Beltway Confidential blog. He’s VP of communications at Ivory Tusk Consulting, a South Carolina-based agency. A former broadcast journalist and government communicator, his “Holy Cow! History” column is available at jmarkpowell.com.
