"Black Friday": Gold prices plummet after Ulysses S. Grant orders the Treasury to sell large quantities of gold after Jay Gould and James Fisk plot to control the market.
The Black Friday gold panic of September 24, 1869 was caused by a conspiracy between two investors, Jay Gould and his partner James Fisk, and Abel Corbin, a small time speculator who had married Virginia (Jennie) Grant, the younger sister of President Grant. They formed the Gold Ring to corner the gold market and force up the price of that metal on the New York Gold Exchange. The scandal took place during the Presidency of Ulysses S. Grant, whose policy was to sell Treasury gold at weekly intervals to pay off the national debt, stabilize the dollar, and boost the economy. The country had gone through tremendous upheaval during the Civil War and was not yet fully restored.
Gould and Fisk hoped to take advantage of Corbin's relationship with his brother in law—the president—and Gould persuaded Corbin to introduce him to Grant. Gould and Fisk hoped that befriending the President would get them privy information about the government's gold policy—and even prevent the sale of gold—and thereby manipulate the market. It worked, resulting in a scandal that undermined both the credibility of Grant's presidency and the national economy. Gould and Fisk used their personal appearances with Grant to gain clout on Wall Street in addition to using their insider information.
During the first week of September, Grant's Secretary of the Treasury George S. Boutwell received a letter from Grant telling him gold sales would be harmful to Western farmers, a notion planted by Gould and Fisk. Boutwell suspended Treasury gold sales. At the same time, Gould and Fisk began buying gold through New York City's Gold Room, raising the price of gold. After learning about the nature of their scheme, Grant first told Corbin to unload his gold holdings before ordering the release of $4 million in government gold on September 24. Grant's move immediately drove down the price of gold, crushing the Gold Ring's corner on the market. A panic on Wall Street ensued and the country went through months of economic turmoil. Thanks to Grant's efforts, as well as those of his administration, a national depression was averted. Gould and Fisk hired the best defense available. Favored by Tweed Ring judges, the conspiratorial partners escaped prosecution. An 1870 government investigation, headed by fellow Republican James A. Garfield, exonerated Grant of any illicit involvement in the conspiracy.