BLACK FRIDAY

By J. K. Medbery.

THE name, Black Friday, is applied to the first of two disastrous days (September 24-5, 1869) in the financial history of the United States. It involved a panic caused by the effort of Gould and Fisk to corner the gold market, and originated in a fight between them and the Vanderbilts for control of the Erie Railroad. A campaign of bribery and corruption was carried on that soiled the reputations of public officials, including legislatures and judges by wholesale, reaching its climax in the gold conspiracy of 1869 and Black Friday. An attempt was made to control President Grant himself.

The event was a sort of precursor to a subsequent evil experience Grant had in Wall Street, after his second term as President, when he became a partner in the firm of Grant and Ward, which came to grief and involved him in financial ruin. This contemporaneous account is given in Medbery's "Men and Mysteries of Wall Street."

ON the 22d of September gold stood at 137 1/2 when Trinity bells rung out the hour of twelve. By two it was at 139. Before night its lowest quotation was 141. This ascent, regular, unfluctuating, and evidently predetermined, carried the more alarm by the very extent of the rise. In the old Rebellion days a ten-per-cent increase in eight hours was an affair of no moment whatever. It happened every week, sometimes twice and thrice a week. But since the sharp vibrations of June 16 and 18, 1866, when gold rose and fell from 154 to 160, and again from 133 to 167 3/4, the utmost daily range had been two per cent, with occasional fractional additions. Three years of dul1 monotony, and now an advance of three and a half per cent in five hours! At the same time the Stock Market conditions exhibited tokens of excessive febrility, New York Central dropping twenty-three per cent and Harlem thirteen. Loans had become extremely difficult to negotiate. The most usurious prices for a twenty-four hours' turn were freely paid. The storm was palpably reaching the proportions of a tempest.

Nevertheless, the brokers on the bear side strove manfully under their burden. The character and purposes of the clique were fully known. Whatever of mystery had heretofore enfolded them was now boldly thrown aside, and the men of Erie, with the sublime Fisk in the forefront of the assailing column, assured the shorts that they could not settle too quickly, since it remained with the ring, now holding calls for one hundred millions, either to kindly compromise at 150 or to carry the metal to 200 and nail it there. This threat was accompanied by consequences in which the mailed hand revealed itself under the silken glove. The movement had inter-twisted itself deep into the affairs of every dealer in the Street, and entangled in its meshes vast numbers of outside speculators. In borrowing or in margins the entire capital of the former had been nearly absorbed, while some five millions had been deposited by the latter with their brokers in answer to repeated calls. When Thursday morning rose, gold started at 141 5/8, and soon shot up to 144. Then the clique began to tighten the screws. The shorts received peremptory orders to increase their borrowing margins. At the same moment the terms of loans overnight were raised beyond the pitch of ordinary human endurance. Stories were insidiously circulated exciting suspicion of the integrity of the Administration, and strengthening the belief that the National Treasury would bring no help to the wounded bears. Whispers of an impending lock-up of money were prevalent; and the fact, then shrewdly suspected, and now known, of certifications of checks to the amount of twenty-five millions by one bank alone on that day lent color to the rumor. Many brokers lost courage, and settled instantly. The Gold Boom shook with the conflict, and the battle prolonged itself into a midnight session at the Fifth Avenue Hotel. The din of the tumult had penetrated to the upper chambers of journalism. Reporters were on the alert. The great dailies magnified the struggle, and the Associated Press spread intelligence of the excitement to remote sections.

When Friday opened clear and calm, the pavement of Broad and New Streets soon filled up with unwonted visitors. All the idle population of the city and its neighborhood crowded into the financial quarter to witness the throes of the tortured shorts. Blended with the merely curious were hundreds of outside speculators who had ventured their all in the great stake, and trembled in doubt of the honor of their dealers. Long before 9 A. M. these men, intensely interested in the day's encounter, poured through the alleyway from Broad Street, and between the narrow walls of New Street, surging up around the doorways, and piling themselves densely and painfully within the cramped galleries of the Room itself. They had made good the fresh calls for margins up to 143, the closing figure of the night before. The paramount question now was, How would gold open? They had not many minutes to wait. Pressing up to the fountain, around which some fifty brokers had already congregated, a bull operator with resonant voice bid 145 for twenty thousand. The shout startled the galleries. Their margins were once more in jeopardy. Would their brokers remain firm? It was a terrible moment. The bears closed round the aggressors. Yells and shrieks filled the air. A confused and baffling whirl of sounds ensued, in which all sorts of fractional bids and offers mingled, till '46 emerged from the chaos. The crowd within the arena increased rapidly in numbers. The clique agents became vociferous. Gold steadily pushed forward in its perilous upward movement from '46 to '47, thence to '49, and, pausing for a brief twenty minutes, dashed on to 150 1/2. It was now considerably past the hour of regular session. The President was in the chair. The Secretary's pen was bounding over his registry book. The floor of the Gold Room was covered with three hundred agitated dealers and operators, shouting, heaving in masses against and around the iron railing of the fountain, falling back upon the approaches of the committee-rooms and the outer entrance, guarded with rigorous care by sturdy doorkeepers. Many of the principal brokers of the street were there, Kimber, who had turned traitor to the ring; Colgate, the Baptist ; Clews, a veteran government broker ; one of the Marvins ; James Brown ; Albert Speyer, and dozens of others hardly less famous. Every individual of all that seething throng had a personal stake beyond, and, in natural human estimate, a thousandfold more dear than that of any outside patron, no matter how deeply or ruinously that patron might be involved. At 11 of the dial gold was 150 1/2; in six minutes it jumped to 155. Then the pent-up tiger spirit burst from control. The arena rocked as the Coliseum may have rocked when the gates of the wild beasts were thrown open, and with wails and shrieks the captives of the empire sprang to merciless encounter with the ravenous demons of the desert. The storm of voices lost human semblance. Clenched hands, livid faces, pallid foreheads on which beads of cold sweat told of the interior anguish, lurid, passion-fired eyes, all the symptoms of a fever which at any moment might become frenzy were there. The shouts of golden millions upon millions hurtled in all ears. The labor of years was disappearing and reappearing in the wave line of advancing and receding prices. With fortunes melting away in a second, with five hundred millions of gold in process of sale or purchase, with the terror of yet higher prices, and the exultation which came and went with the whispers of fresh men entering from Broad Street bearing confused rumors of the probable interposition of the government, it is not hard to understand how reason faltered on its throne, and operators became reckless, buying or selling without thought of the morrow or consciousness of the present.