The Day They Tried to Corner Gold

The funeral procession is opulent. The city has never seen such wealth. Everybody's there. The rich. The poor. Lordy Lord. Didja ever see such a thing in yer life? It's Jim Fisk. Got hisself shot dead. The caravan wends its way through the streets. The wealthy watch in quiet dignity. Others guzzle beer in celebration. Street arabs...shoeless homeless boys...seven...eight years old...dart in and out through the crowds. The year is 1871. The horse drawn hearse is decked in silver.

Gold...it's that yellow stuff that drives men mad. (Some of you probably thought it was women). Back we go...to the summer of 1869. The precious stuff is on the minds of men like J.P. Morgan, and Jay Gould, and Jim Fisk--financial wizard of his day. Gould has just closed some rewarding swindles in railroad stock. He is now studying the Gold Room of the New York Stock Exchange. He has a vision. He and Fisk are going to corner the nation's currency by controlling gold. He has the resources. But there's a kicker. The U.S. Treasury is holding about $80 million of this yellow metal. This MUST be kept out of the market if they're going to capture all the rest of the gold out there. Question is: How to do it? The answer: Get President Ulysses S. Grant to agree not to move the nation's gold from its vaults.

Fisk has a yacht--The Providence. In June, Grant is invited on board. Now yacht-borne, a glass of bourbon in one hand, a cigar in the other, Grant is titillated by hobnobbing with the financial wizards of his time. These are the guys that deal in, and make, millions. These wheeler-dealers respected him for his wisdom and skill, never mind the fact that Grant was a one time business failure, an army misfit, and a kindling wood peddlar. Gould is whispering in his ear. He's explaining things over and over. A free ride of gold on an open market, as it seeks its own level, unhindered by the metal in the U.S. Treasury, was good for the country.

Gold drops to 125 in the Gold Room listing. The Treasury was maintaining a hands-off policy, keeping the gold off the market, as per Grant's orders. Gold goes up to 137. Fisk spreads a rumor that Mrs. Grant is "in gold". Gold shoots up to 141. The Tammany bank backs Fisk and Gould and others with everything it has in its recourses. It issues certified checks as if they were grains of sand. Collateral? Only The gold that was being bought. Fisk and his cronies buy $40 million in gold. This represents about twice as much gold as is actually in existence on the free market. Gold goes up to over 144. Fisk and Gould have produced a major coup. They have cornered al the gold, and can demand payment in gold from those who sold them gold...sold short on gold they didn't have. It was a titanic squeeze play...as long as Grant stood firm.

Panic hits the streets. There's no gold available. It's all been bought up. For the nation to do business, produce, ship, import...real gold is needed. Grant is approached. He is asked to release gold out of the Treasury. The Fisk/Gould scheme is laid out. Grant is going to put Treasury gold out for sale.

Friday, September 24, 1869. Black Friday. Fisk is on Wall Street, trying to lift the price up to $200. He's buying like mad. Gold goes up to 150, 160, 165. There are riotous scenes in all major cities.There's wild bidding. Frenzied mobs of speculators are buying. If it keeps going up up up, they'll make a fortune. No one is yet aware of Grant's plan to release the metal into the market.

Then, suddenly, Secretary of the Treasury, Mr. Boswell, flings millions in government gold onto the market. Prices plummet. Fortunes are lost. Mobs gather around the offices of Fisk and his partners. Fisk is assaulted. His life is threatened. Rich men were ruined. Millionaires were suddenly insolvent. Murder was in the air. Gould took it on the lam. But Fisk had made a fortune. He had been secretly selling his personal stock. It's said he squirreled away $11 million. He gets away with it.

So...you may ask...how did he die. Shot! By a jealous rival for the favors of his mistress. And the moral of the story me lads is this: If you're going to try and corner all the gold in the United States, be the first in, and the first out. And there you have it.