Black Friday gold panic in New York (1869–1870)

Black Friday on September 24, 1869, was a financial panic on the New York Gold Exchange resulting from a conspiracy by Jay Gould, James Fisk, and Abel Corbin to corner the gold market. The scheme involved leveraging President Grant's influence, leading to a sharp price collapse, brokerage failures, and a mild recession that resolved by early 1870.

Episodes

Background and detail

Background. The federal government had accumulated a massive national debt during the Civil War, prompting President Grant to sign the Public Credit Act of 1869 to return to the gold standard. This policy involved selling Treasury gold, creating a volatile market environment that speculators sought to exploit through manipulation on the New York Gold Exchange.

The Gold Ring. Jay Gould, James Fisk, and Abel Corbin formed the Gold Ring to corner the gold market. They attempted to bribe Grant's secretary and befriended the President to use his name in the scheme. Gould and Fisk began purchasing gold in August 1869, aiming to force up prices on the exchange.

Impact and Investigation. The panic caused brokerage firms to collapse and agriculture prices to plummet, resulting in a mild recession. An 1870 government investigation detailed the scheme, hinting at Grant's knowledge. The economy resumed recovery by January 1870, though the financial devastation persisted for months.

People involved

Sources

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