Black Friday, September 24, 1869
The black board in the New York Gold Room, September 24, 1869, showing the collapse of the price of gold. Handwritten caption by James A. Garfield indicates it was used as evidence before the Committee of Banking & Currency during hearings in 1870. During the reconstruction era after the American Civil War, the United States government issued a large amount of public debt to finance construction. This included the issuing of fiat greenbacks, not backed by gold, but were required to be accepted for the payment of federal debt. It was generally believed that the Government would ultimately redeem the "greenbacks" with gold. In 1869, a group of speculators, headed by James Fisk and Jay Gould, sought to profit from this by cornering the gold market. In the late summer of 1869, Gould began buying large amounts of gold. He never sold this gold. This caused prices to rise and stocks to plummet. After Grant realized what had happened, the federal government sold $4 million in gold. On September 20, 1869, Gould and Fisk started hoarding gold, driving the price higher. On September 24 the premium on a gold Double Eagle was 30 percent higher than when Grant took office. But when the government gold hit the market, the premium plummeted within minutes. Investors scrambled to sell their holdings, and many of them were ruined. Fisk and Gould escaped significant financial harm.
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Photo credit: © Photo Researchers / Alamy / Afripics
License: Licensed
Model Released: No
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