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The “Black Friday” Gold Scandal

The “Black Friday” Gold Scandal

If any pair of investors had the financial clout and lack of scruples required to engineer the bedlam of Black Friday, it was Jay Gould and Jim Fisk. As president and vice president of the Erie Railroad, the duo had won a reputation as two of Wall Street’s most ruthless financial masterminds. Their rap sheets boasted everything from issuing fraudulent stock to bribing politicians and judges, and they enjoyed a lucrative partnership with Tammany Hall power player William “Boss” Tweed. Gould in particular had proven an expert at devising new ways to game the system, and was once dubbed the “Mephistopheles of Wall Street” for his preternatural ability to line his own pockets. “[Gould’s] nature suggested survival from the family of spiders,” historian Henry Adams later wrote. “He spun huge webs, in corners and in the dark…he seemed never to be satisfied except when deceiving everyone as to his intentions.”

In early 1869, Gould spun a web aimed at conquering what was perhaps the most audacious target in the American financial system: the gold market. At the time, gold was still the official currency of international trade, but the United States had gone off the gold standard during the Civil War, when Congress authorized $450 million in government-backed “greenbacks” to fund the Union march to war. Competing currencies—gold and greenbacks—had been in circulation ever since, and Wall Street had formed a special “Gold Room” where brokers could trade them. Since there was only around $20 million in gold in circulation at any given time, Gould wagered that a speculator with deep enough pockets could potentially buy up huge amounts of the precious metal until they had “cornered” the market. From there, they could drive up the price and sell for astronomical profits.

Gould’s gold ploy faced one very significant hurdle: President Ulysses S. Grant. Since the beginning of Grant’s tenure as chief executive, the U.S. Treasury had continued a policy of using its massive gold reserves to buy back greenbacks from the public. This meant that the government effectively set the value of gold: when it sold its supply, the price went down; when it didn’t, the price went up. If a speculator like Gould tried to corner the market, Grant could simply order the Treasury to sell off huge amounts of gold and drive the price through the floor. For his gold scheme to work, Gould needed President Grant to keep a tight grip on his purse strings.

“The Mephistopheles of Wall Street” found an elegant solution to the government problem in the form of Abel Corbin, a former Washington bureaucrat who happened to be married to Ulysses Grant’s sister, Jennie. In the spring of 1869, Gould befriended Corbin and persuaded him to help with his secret plan to corner the gold market. As a quid pro quo, he deposited a cool $1.5 million in gold in an account under Corbin’s name. The president’s brother-in-law sprang into action that summer. To ensure Gould would have an ear on the government’s actions, Corbin used his political influence to help install General Daniel Butterfield as the U.S. sub-treasurer in New York. In exchange for providing advance notice of any government gold sales, Butterfield was given a $1.5 million stake in the scheme and a $10,000 loan. Corbin also used his family connections to cozy up to Grant and try to persuade him that high gold prices would benefit U.S. farmers who sold their harvest overseas. He arranged for Gould to meet with Grant to discuss the matter, and even helped anonymously author an editorial in the New York Times claiming that the president had reversed his financial policy. The constant wheedling eventually paid off. During a meeting with Corbin on September 2, Grant confided that he had changed his mind on gold and planned to order the treasury not to sell over the next month.

Jay Gould and a few other conspirators had been secretly stockpiling gold since August, but upon learning that the fix was in, they disguised their identities behind an army of brokers and proceeded to gobble up all the gold they could. Gould also enlisted the help of his fellow financial buccaneer Jim Fisk, who promptly dropped $7 million on gold and became one of the cabal’s leading members. As the Gould-Fisk ring increased its stake, gold’s value climbed to dizzying heights. In August, a $100 gold piece had sold for around $132 in greenbacks, but only a few weeks later, the price spiked as high as $141. In Wall Street’s Gold Room, distraught speculators and gold short-sellers suddenly found themselves caught in a vise. Rumors spread about a nefarious group of investors who were trying to “bull,” or drive up, the gold market, and many began calling for the Treasury to intervene by selling its gold reserves. Fisk and Gould kept mum, but by that point, they personally owned a combined $60 million in gold—three times the amount of the public supply in New York.

Gould’s shopping spree continued unabated until September 22, when he learned from Abel Corbin that the president was on to them. Corbin had written Grant a letter looking for assurance that he remained firm on his new, non-interventionist gold stance, and the note had finally aroused the president’s suspicions that his brother-in-law might be involved in a gold scheme. Furious at having been manipulated, the president had gotten his wife to write a response chastising Corbin and warning that Grant would not hesitate to “do his duty to the country” and break the corner. Gould was stunned, but in true robber baron fashion, he neglected to divulge the new information to Fisk or his other partners. Instead, when the buying bonanza resumed on September 23, he began secretly selling off as much of his own gold as he could.

By September 24, 1869—the day that would become known as “Black Friday”—the hubbub over gold had reached a fever pitch. Mobs of spectators and reporters gathered near Wall Street, and many of the Gold Room’s indebted speculators walked to work like men on their way to the gallows. Gold had closed the previous day at $144 ½, but shortly after trading resumed, it took a tremendous leap to $160. Unaware that the game might soon be up, Fisk continued buying like a madman and bragged that gold would soon top $200.

In Washington, D.C., Ulysses S. Grant resolved to bust Gould and Fisk’s corner on the gold market. Shortly before noon, he met with Treasury Secretary George Boutwell, who had been following the chaos via telegraph. After a brief conversation, Grant ordered Boutwell to open his vaults and flood the market. A few minutes later, Boutwell wired New York and announced the Treasury would sell a whopping $4 million in gold the following day.

Along with finally loosening Gould and Fisk’s grasp on the gold market, the news sent Wall Street into a tailspin. “Possibly no avalanche ever swept with more terrible violence,” the New York Herald later wrote. Within minutes, the inflated gold prices plummeted from $160 to $133. The stock market joined in on the plunge, dropping a full 20 percentage points and bankrupting or inflicting severe damage on some of Wall Street’s most venerable firms. Thousands of speculators were left financially ruined, and at least one committed suicide. Foreign trade ground to a halt. Farmers may have felt the squeeze most of all, with many seeing the value of their wheat and corn harvests dip by 50 percent.

Ripples from “Black Friday” affected the U.S. economy for several years and blighted the rest of Ulysses S. Grant’s tenure as president. Nevertheless, Jay Gould and Jim Fisk managed to escape the disaster none the worse for wear. Despite multiple allegations of malfeasance and an official investigation by Congress, the two leveraged their political connections and employed a brigade of attorneys to avoid spending a single night in jail. Fisk even ducked out on his massive losses, claiming third party brokers had made the trades without his knowledge. Gould may have proved even more fortunate. It’s unclear how his finances fared on Black Friday, but according to some estimates, his last minute fire sale may have netted him somewhere around $12 million.

Gould was born in Roxbury, New York, to Mary More (1798–1841) and John Burr Gould (1792–1866). His maternal grandfather Alexander T. More was a businessman, and his great-grandfather John More was a Scottish immigrant who founded the town of Moresville, New York. Gould studied at the Hobart Academy in Hobart, New York, [5] paying his way by bookkeeping. [6] As a young boy, he decided that he wanted nothing to do with farming, his father's occupation, so his father dropped him off at a nearby school with fifty cents and a sack of clothes. [7]

Gould's school principal was credited with getting him a job as a bookkeeper for a blacksmith. [8] A year later, the blacksmith offered him half interest in the blacksmith shop, which he sold to his father during the early part of 1854. Gould devoted himself to private study, emphasizing surveying and mathematics. In 1854, he surveyed and created maps of the Ulster County, New York, area. In 1856, he published History of Delaware County, and Border Wars of New York, which he had spent several years writing. [9]

In 1856, Gould entered a partnership with Zadock Pratt [8] to create a tanning business in Pennsylvania in an area that was later named Gouldsboro. He eventually bought out Pratt, who retired. In 1856, Gould entered a partnership with Charles Mortimer Leupp, a son-in-law of Gideon Lee and one of the leading leather merchants in the United States. The partnership was successful, until the Panic of 1857. Leupp lost all his money in that financial crisis, but Gould took advantage of the depreciation in property value and bought up former partnership properties. [8]

The Gouldsboro Tannery became a disputed property after Leupp's death. Leupp's brother-in-law David W. Lee was also a partner in Leupp and Gould, and he took armed control of the tannery. He believed that Gould had cheated the Leupp and Lee families in the collapse of the business. Gould eventually took physical possession, but he was later forced to sell his shares in the company to Lee's brother. [10]

In 1859, Gould began speculative investing by buying stock in small railways. His father-in-law Daniel S. Miller introduced him to the railroad industry by suggesting that Gould help him save his investment in the Rutland and Washington Railroad in the Panic of 1857. Gould purchased stock for 10 cents on the dollar, which left him in control of the company. [11] He engaged in more speculation on railroad stocks in New York City throughout the Civil War, and he was appointed manager of the Rensselaer and Saratoga Railroad in 1863.

The Erie Railroad encountered financial troubles in the 1850s, despite receiving loans from financiers Cornelius Vanderbilt and Daniel Drew. It entered receivership in 1859 and was reorganized as the Erie Railway. Gould, Drew, and James Fisk engaged in stock manipulations known as the Erie War, and Drew, Fisk, and Vanderbilt lost control of the Erie in the summer of 1868, while Gould became its president. [12]

It was during the same period that Gould and Fisk became involved with Tammany Hall, the Democratic Party political machine that largely ran New York City at the time. They made its boss, William M. Tweed, a director of the Erie Railroad, and Tweed arranged favorable legislation. Tweed and Gould became the subjects of political cartoons by Thomas Nast in 1869. Gould was the chief bondsman in October 1871 when Tweed was held on $1 million bail. Tweed was eventually convicted of corruption and died in jail. [13]

In August 1869, Gould and Fisk began to buy gold in an attempt to corner the market, hoping that the increase in the price of gold would increase the price of wheat and motivate western farmers to sell. This, in turn, would cause a great amount of shipping eastward, increasing freight business for the Erie Railroad. During this time, Gould used contacts with President Ulysses S. Grant's brother-in-law Abel Corbin to influence the president and his Secretary General Horace Porter. [14] [15] These speculations culminated in the panic of Black Friday on September 24, 1869, when the greenback (cash) premium over face value fell on a gold Double Eagle from 62 percent to 35 percent. Gould made a small profit from this operation by hedging against his own attempted corner as it was about to collapse, but he lost it in subsequent lawsuits. The gold corner established Gould's reputation in the press as an all-powerful figure who could drive the market up and down at will. [16]

In 1873, Gould attempted to take control of the Erie Railroad by recruiting foreign investments from Lord Gordon-Gordon, supposedly a cousin of the wealthy Campbell clan who was buying land for immigrants. He bribed Gordon-Gordon with a million dollars in stock, but Gordon-Gordon was an impostor and cashed the stock immediately. Gould sued him, and the case went to trial in March 1873. In court, Gordon-Gordon gave the names of the Europeans whom he claimed to represent, and he was granted bail while the references were checked. He immediately fled to Canada, where he convinced authorities that the charges were false. [17] [18]

Having failed to convince Canadian authorities to hand over Gordon-Gordon, Gould attempted to kidnap Gordon-Gordon with the help of his associates and future members of Congress Loren Fletcher, John Gilfillan, and Eugene McLanahan Wilson. The group captured him successfully, but they were stopped and arrested by the North-West Mounted Police before they could return to the US. Canadian authorities put them in prison and refused them bail, [17] [18] and this led to an international incident between the United States and Canada. Governor Horace Austin of Minnesota demanded their return when he learned that they had been denied bail, and he put the local militia on full readiness, and thousands of Minnesotans volunteered for an invasion of Canada. After negotiations, the Canadian authorities released them on bail. Gordon-Gordon was eventually ordered to be deported but committed suicide before the order could be carried out. [17] [18]

Western railroads Edit

After being forced out of the Erie Railroad, Gould started to build up a system of railroads in the midwest and west. He took control of the Union Pacific in 1873 when its stock was depressed by the Panic of 1873, and he built a viable railroad that depended on shipments from farmers and ranchers. He immersed himself in every operational and financial detail of the Union Pacific system, building an encyclopedic knowledge and acting decisively to shape its destiny. Biographer Maury Klein states that "he revised its financial structure, waged its competitive struggles, captained its political battles, revamped its administration, formulated its rate policies, and promoted the development of resources along its lines." [19] [20]

By 1879, Gould gained control of three more important western railroads, including the Missouri Pacific Railroad. He controlled 10,000 miles (16,000 km) of railway, about one-ninth of the rail in the United States at that time, and he had controlling interest in 15 percent of the country's railway tracks by 1882. The railroads were making profits and set their own rates, and his wealth increased dramatically. He withdrew from management of the Union Pacific in 1883 amid political controversy over its debts to the federal government, but he realized a large profit for himself. He obtained a controlling interest in the Western Union telegraph company and in the elevated railways in New York City after 1881. In 1889, he organized the Terminal Railroad Association of St. Louis which acquired a bottleneck in east–west railroad traffic at St. Louis, but the government brought an antitrust suit to eliminate the bottleneck control after Gould died. [21]

Gould was a member of West Presbyterian Church at 31 West 42nd Street. It later merged with Park Presbyterian to form West-Park Presbyterian. [22]

He married Helen Day Miller (1838–1889) in 1863 and had six children.

Gould died of tuberculosis, then referred to as "consumption," on December 2, 1892, and was interred in the Woodlawn Cemetery, The Bronx, New York. His fortune was conservatively estimated for tax purposes at $72 million (equivalent to $2.07 billion in 2021 [23] ), which he willed in its entirety to his family. [5]

At the time of his death, Gould was a benefactor in the reconstruction of the Reformed Church of Roxbury, New York, now known as the Jay Gould Memorial Reformed Church. [24] It is located within the Main Street Historic District and listed on the National Register of Historic Places in 1988. [25] The family mausoleum was designed by Francis O'Hara.

Gould moved to New York City in the 1850s and began learning the ways of Wall Street. The stock market was largely unregulated at the time, and Gould became adept at manipulating stocks. Gould was ruthless at using techniques such as cornering a stock, by which he could drive prices up and ruin speculators who were “short” on the stock, betting the price would go down. It was widely believed that Gould would bribe politicians and judges and was thereby able to skirt whatever laws might have curtailed his unethical practices.

A story that circulated in Gould's time about his early career was that he led his partner in the leather business, Charles Leupp, into reckless stock transactions. Gould's unscrupulous activities led to Leupp's financial ruin, and he killed himself in his mansion on Madison Avenue in New York City.

Black Friday

Black Friday, September 24 1869, also known as the Fisk/Gould Scandal, was a financial panic in the United States caused by two speculators’ efforts to corner the gold market on the New York Gold Exchange.

It was one of several scandals that rocked the presidency of Ulysses S. Grant. During the American Civil War, the United States government issued a large amount of money that was backed by nothing but credit. After the war ended, people commonly believed that the U.S. Government would buy back the “greenbacks” with gold. In 1869, a group of speculators, headed by James Fisk and Jay Gould, sought to profit off this by cornering the gold market. Gould and Fisk first recruited Grant’s brother-in-law, a financier named Abel Corbin. They used Corbin to get close to Grant in social situations, where they would argue against government sale of gold, and Corbin would support their arguments. Corbin convinced Grant to appoint General Daniel Butterfield as assistant Treasurer of the United States. Butterfield agreed to tip the men off when the government intended to sell gold.

The first scandal to taint the Grant administration was Black Friday, a gold-speculation financial crisis in September 1869, set up by Wall Street manipulators Jay Gould and James Fisk. They tried to corner the gold market and tricked Grant into preventing his Treasury Secretary from stopping the fraud. However, Grant eventually released large amounts of gold back onto the market, causing a large-scale financial crisis for many gold investors. Gould had already prepared and quietly sold out while Fisk denied many agreements and hired thugs to intimidate his creditors.

Grant Administration Scandals

The postwar era was marked by widespread political corruption. Dishonest Scalawags and Carpetbaggers enriched themselves in state and local governments of the South during Reconstruction. Cities in the North were not immune to the prevailing greed where the infamous Tweed Ring of New York City set the standard for urban corruption. On the national level the two Grant administrations established a woeful record, although few doubted the president`s personal honesty. Major scandals included the following:

  • Credit Mobilier . Representative Oakes Ames of Massachusetts and Thomas C. Durant were prominent stockholders in the Union Pacific Railroad. In 1867 the two cooperated in forming Crédit Mobilier, a dummy construction company fobbed off as responsible for completing the transcontinental railway`s last 600 miles. In the process, U.P. stockholders and the federal government were bilked out of millions of dollars. When it appeared that an investigation was going to be launched, Ames bribed influential congressmen and was able to head off scrutiny. Nevertheless, the fraud was exposed in 1872. It was apparent that Vice president Schuyler Colfax had been bribed with stock. House Speaker James A. Garfield was linked to the dealings, but his participation was never proven. Despite the loss of $20 million (a huge sum in the 1870s), no prosecutions ever occurred.
  • Black Friday . In 1869, speculators Jim Fisk and Jay Gould attempted to corner the nation’s gold market. They enlisted the help of Grant’s brother-in-law, who had pledged to prevent the president from acting to ruin the scheme. The conspirators bought huge amounts of gold and gold futures, sending the price of the commodity spiraling upward. They intended to sell everything at an enormous profit. However, Grant came to realize that his brother-in-law’s advice was harming public confidence and he ordered the immediate sale of $4 million worth of government gold. The price plummeted. Thousands of people suffered financial losses – not including Fisk and Gould, who refused to pay off their obligations.
  • The Whiskey Ring . In the years following the Civil War, federal liquor taxes were raised to extremely high rates to help pay off the cost of the fighting. In order to avoid the high tax, many of the nation’s distillers bribed officials in the Department of the Treasury, receiving tax stamps at a fraction of their face value. Treasury Secretary Benjamin H. Bristow eventually caught wind of the dishonesty and launched a massive investigation. In the end, more than 100 officials were convicted. Grant, much to his discredit, successfully shielded his private secretary, Orville E. Babcock.
  • The Indian Ring . Grant’s Secretary of War, William W. Belknap, accepted bribes from companies with licenses to trade on the reservations of many Native American tribes. Belknap was impeached by the House of Representatives, but acquitted by the Senate in August 1876.

Black Friday (Stock Market Crash)

Black Friday was a stock market catastrophe that took place on Sept. 24, 1869. On that day, after a period of rampant speculation, the price of gold plummeted, and the markets crashed. It can also refer to a shopping holiday in the U.S. following Thanksgiving.

Black Friday

It was sparked by a ring of speculators, led by Jay Gould and James Fisk, who attempted to corner the gold market. In early September, they bought as much bullion as they could get their hands on, causing the price of gold to skyrocket. They also enlisted the help of Abel Corbin, the brother-in-law of President Ulysses S. Grant. They wanted him to persuade the president to limit the metal's availability, which would drive its price even higher.

But their attempt to use the White House to manipulate the supply failed. When Grant learned what was happening, he ordered the U.S. Treasury to sell gold instead. The government unloaded $4 million worth, and on Friday, Sept. 24, 1869, the price of gold fell from $160 to $130 per ounce. The gold market collapsed, causing the stock market to plummet more than 20% in the next week, ruining many investors. The day became known in financial history as Black Friday.

This stock market crash was the origin of referring to stock market crashes as "black" days. Other examples include Black Tuesday, Oct. 29, 1929, when the market fell precipitously, signaling the start of the Great Depression, and Black Monday, Oct. 19, 1987, when the Dow Jones Industrial Average (DJIA) plummeted more than 22%, the largest one-day drop in stock market history.

Black Friday History: The Dark True Story Behind The Name

The COVID-19 pandemic represents a massive dark cloud hanging over the holidays this year. If you’re a shopaholic, however, the thrill of snatching Black Friday deals may offer some light relief. That is, until you find out why the day is called “Black Friday.”

Maybe you’re familiar with the wholesome origin story of Black Friday . It goes something like this: For years, tryptophan-happy shoppers would flood local shops and malls the day after Thanksgiving , and that surge in spending was enough to put retailers “in the black” for the year. Therefore, the Friday following Thanksgiving was dubbed “Black Friday,” and it became the unofficial start of the holiday shopping season .

Except that wasn’t always how the phrase was used. Before the retail industry put a tidy little spin on Black Friday, it had a much more sinister meaning. Here’s the real reason the term “Black Friday” exists.

The Origin Of Black Friday

When a day is preceded by “black,” that’s usually an indication that it was pretty bad day (hello, Black Monday ). Black Friday had a similar connotation.

The very earliest use of the phrase Black Friday dates to 1869 and had nothing to do with Christmas shopping. It was the day plummeting gold prices caused a market crash , the effects of which were felt by the U.S. economy for years.

The first mentions of Black Friday as we know it are said to have occurred around the 1950s or ’60s in Philadelphia, coined by traffic police who dreaded the day.

“The Philadelphia Police Department used the term to describe the traffic jams and intense crowding of the downtown retail stores,” said David Zyla, an Emmy-winning stylist and author of “ How to Win at Shopping .” He noted that one of the first uses of the term in print appeared in an ad in a 1966 issue of The American Philatelist , a magazine for stamp collectors.

An archived excerpt of this ad appears in a thread on The Linguist List , an online forum operated by the Indiana University Department of Linguistics :

“Black Friday” is the name which the Philadelphia Police Department has given to the Friday following Thanksgiving Day. It is not a term of endearment to them. “Black Friday” officially opens the Christmas shopping season in center city, and it usually brings massive traffic jams and over-crowded sidewalks as the downtown stores are mobbed from opening to closing.

There’s additional evidence to suggest that this unflattering term originated among police in Philadelphia. The late Joseph P. Barrett, a longtime police reporter and feature writer for the Philadelphia Bulletin , reminisced about his part in the use of Black Friday in a 1994 Philadelphia Inquirer article headlined, “ This Friday Was Black With Traffic ”:

In 1959, the old Evening Bulletin assigned me to police administration, working out of City Hall. Nathan Kleger was the police reporter who covered Center City for the Bulletin.

In the early 1960s, Kleger and I put together a front-page story for Thanksgiving and we appropriated the police term “Black Friday” to describe the terrible traffic conditions.

However, local police weren’t the only ones who loathed this day. “The ratio of sales personnel-to-customers added to the pandemonium, as the frequent custom at the time was for sales associates to call in sick on this day to extend their Thanksgiving holiday weekend,” Zyla said.

Indeed, in another archived clip from a piece titled “Tips to Good Human Relations for Factory Executives,” which was published in a 1951 issue of Factory Management and Maintenance , the author describes rampant absenteeism the Friday after Thanksgiving:

“Friday-after-Thanksgiving-itis” is a disease second only to the bubonic plague in its effects. At least that’s the feeling of those who have to get production out, when the “Black Friday” comes along. The shop may be half empty, but every absentee was sick ― and can prove it.

It’s not clear whether Black Friday was a common expression as early as 1951 or if the author of the article was simply being clever, but one thing’s for sure: Not a whole lot of people were fans of that day.

Lipstick On A Pig

Not surprisingly, retailers didn’t love the use of the gloomy term “Black Friday” to describe one of their biggest revenue days. So they put a positive spin on it.

“Black Friday joins a long list of days that have taken on new meaning over time,” Zyla said. As early as 1961, public relations professionals attempted to change the public’s perception of Black Friday. In an issue of P ublic Rel ations News , an industry newsletter, the author described efforts by one well-known PR executive to change the day from “Black” to “Big” in order to solidify its reputation as a day of family fun and shopping:

Hardly a stimulus for good business, the problem was discussed by the merchants with their Deputy City Representative, Abe S. Rosen, one of the country’s most experienced municipal PR executives. He recommended adoption of a positive approach which would convert Black Friday and Black Saturday to Big Friday and Big Saturday. The media cooperated in spreading the news of the beauty of Christmas-decorated downtown Philadelphia, the popularity of a “family-day outing” to the department stores during the Thanksgiving weekend, the increased parking facilities, and the use of additional police officers for guaranteeing a free flow of traffic.

The name “Big Friday” didn’t stick, but continued efforts to put a positive spin on the day eventually paid off. Today, most consumers associate Black Friday with the black ink retailers see from increased sales.

“Retailers have little concern today with the origin of the name but have taken full advantage of its global recognition as a day (along with Cyber Monday) to make a significant portion of their yearly sales with one-day-only and doorbuster promotions,” Zyla said. Online sales alone during Black Friday 2019 reached a record $7.2 billion, up 14% from the previous year.

It’s a great day for retailers, but Black Friday has always represented the dark side of American consumerism, too. Over the years, frenzied crowds competing for discounted merchandise have resulted in violence and injuries, including 12 deaths. And even though shoppers probably won’t have to deal with gridlocked roads and overcrowded stores this year as social distancing is enforced, the financial devastation experienced by businesses and individuals alike as a result of the pandemic will surely cast an element of gloom over this day.

So if you decide to participate in one of the biggest shopping days of the year, try to have a bit of compassion for others. Consider staying home and scoring deals from the comfort and safety of your computer. If you do have to go out, wear a mask. Most important, give yourself a break if your budget is tight this year. After all, Black Friday isn’t the cheerful holiday retailers want you to believe it is.

If it matters to you, it matters to us. Support HuffPost’s journalism here.

How did it become associated with shopping?

As it turned out, many of the football fans rushing into the streets of Philadelphia were also coming for another reason — shopping.

The city's retailers wanted to capitalize on the increased traffic, so they tried to erase the negative connotation around "Black Friday," even briefly attempting to call it "Big Friday." But the name didn't stick, so advertisers just started embracing the original nickname. Newspaper ads were using "Black Friday" to call in eager shoppers as early as 1966, according to the Telegraph.

Others joined in, and by 1975, bus drivers and taxi drivers were also using the term as a way to mark the traffic-laden day they dreaded each year.

By the 1980s, the phrase began spreading nationwide, with retailers in every city setting their biggest deals for the day after Thanksgiving. Things completely took off from there, and now Black Friday is a $6 billion affair, with more than 160 million Americans swarming to shops during Thanksgiving weekend in 2018.


Grant was personally honest with money matters. However, he trusted and protected his close associates, in denial of their guilt, despite evidence against them. [5] [6] According to C. Vann Woodward, Grant had neither the training nor temperament to fully comprehend the complexities of rapid economic growth, industrialization, and western expansionism. [6] [7] During his presidency, Grant enjoyed speaking with men of wealth and influence, but he was also personally generous to the poor. [8] Grant had come from a humble background where men of superior intelligence and ability were threats rather than assets. Instead of responding with trust and warmth to men of talent, education, and culture, he turned to his military friends from the Civil War and to politicians as new as himself. [6] [9] According to Grant's son, Ulysses Jr., his father was "incapable of supposing his friends to be dishonest." [10] According to Grant's Attorney General George H. Williams, Grant's "trusting heart was the weakness of his character". [11] Williams also said Grant was slow to make friends, however, once friendships were made "they took hold with hooks of steel." [11]

Many of Grant's associates were able to capture his confidence through flattery and brought their intrigues openly to his attention. One of these men, Orville E. Babcock, was a subtle and unscrupulous enemy of reformers, having served as Grant's personal secretary for seven years while living in the White House. Babcock, twice indicted, gained indirect control of whole departments of the government, planted suspicions of reformers in Grant's mind, plotted their downfall, and sought to replace them with men like himself. President Grant allowed Babcock to be a stumbling block for reformers who might have saved Grant's presidential legacy. Grant's secretary of state, Hamilton Fish, who was often at odds with Babcock, made efforts to save Grant's reputation by advocating that reformers be appointed to or kept in public office. Grant also unwisely accepted gifts from wealthy donors that cast doubts on his reputability. [6] [12]

Black Friday Gold Panic 1869 Edit

The first scandal to taint the Grant administration was Black Friday, also known as the Gold Panic, that took place in September 1869, when two aggressive private financiers cornered the gold market in their New York Gold Room, with blatant disregard to the nation's economic welfare. The scandal involved Treasury Department policy and personel, but most of the financial damage directly affected the national economy and New York's financial houses. The intricate financial scheme was primarily conceived and administered by Wall Street manipulators Jay Gould and his partner James Fisk. Their plan was to convince President Grant not to sell Treasury gold, in order to increase the sales of agriculture products overseas and increase the shipping business of Gould's Erie Railroad. Gould and Fisk were able to get Grant's brother-in-law, Abel Rathbone Corbin, involved with the scheme as a way to get access to Grant himself. Gould had also given a $10,000 bribe to the assistant Secretary of the Treasury, Daniel Butterfield, in exchange for inside information. On June 5, 1869, while Grant was traveling from New York to Boston on The Providence, a ship owned by both Gould and Fisk, the two speculators urged Grant not to sell any gold from the Treasury and attempted to convince him that a high price of gold helped farmers and the Erie Railroad. [13] President Grant, however, was stoic and did not agree to Fisk and Gould's suggestion to stop releasing Treasury Gold into the market. [13]

Grant's Secretary of Treasury, George S. Boutwell, continued to sell Treasury gold on the open market. In late August 1869, President Grant consulted with businessman, A. T. Stewart, Grant's initial Cabinet nominee for Secretary of Treasury, concerning the Treasury's selling gold. Stewart advised Grant that the Treasury should not sell gold, in order that the Government would not be involved in the gold market. [14] Grant accepted Stewart's advise and wrote to Boutwell that selling extra Treasury gold would upset agriculture sales. [14] Boutwell had, on September 1, originally ordered $9,000,000 in gold to be sold from the Treasury in order to buy up U.S. Bonds with greenbacks. However, after receiving a letter from Grant, Boutwell cancelled the order. Previously, Secretary Boutwell had been selling regularly at $1,000,000 of gold each week. [15] On September 6, 1869, Gould bought the Tenth National Bank, which was used as a buying house for gold, and Gould and Fisk then began buying gold in earnest. As the price of gold began to rise, Grant became suspicious of possible manipulation and wrote a letter to Secretary Boutwell on September 12, stating "The fact is, a desperate struggle is now taking place. I write this letter to advise you of what I think you may expect, to put you on your guard." However, President Grant's personal associations with Gould and Fisk gave them the clout that they needed to continue their financial scam on Wall Street. [16] [17] [18]

Sometime around September 19, 1869, Corbin, at the urging of Gould, sent a letter to Grant desperately urging him not to release gold from the Treasury. Grant received the letter from a messenger while playing croquet with Porter at a deluxe Pennsylvania retreat. He finally realized what was going on and was determined to stop the gold manipulation scheme. When pressed for a reply to Corbin's letter, Grant responded curtly that everything was "all right" and that there was no reply. One Grant biographer described the comical nature of the events as an Edwardian farce. Grant, however, did have his wife Julia respond in a letter to Corbin's wife that Abel Corbin needed to get out of the gold speculation market. When Gould visited Corbin's house, he read the letter from Mrs. Grant containing the warning from Grant, after which he began to sell gold, while also buying small amounts of gold in order to keep people from getting suspicious. Gould never told Fisk, who kept buying gold in earnest, that Grant was catching onto their predatory scheme. [19]

Secretary Boutwell was already keeping track of the situation and knew that the profits made in the manipulated rising gold market could ruin the nation's economy for several years. By September 21 the price of gold had jumped from $37 to $141, and Gould and Fisk jointly owned $50 million to $60 million in gold. Boutwell and Grant finally met on Thursday, September 23, and agreed to release gold from the treasury if the gold price kept rising. Grant wanted $5,000,000 in gold to be released while Boutwell wanted $3,000,000 released. Then, on (Black) Friday, September 23, 1869, when the price of gold had soared to $160 an ounce, Boutwell released $4 million in gold specie into the market and bought $4,000,000 in bonds. Boutwell had also ordered that the Tenth National Bank be closed on the same day. The gold market crashed and Gould and Fisk were foiled, while many investors were financially ruined. [16]

The gold panic devastated the United States economy for months. Stock prices plunged and the price of food crops such as wheat and corn dropped severely, devastating farmers who did not recover for years afterward. Gould had earlier claimed to Grant that raising the price of gold would actually help farmers. Also Fisk refused to pay off many of his investors who had bought gold on paper. The volume of stocks being sold on Wall Street decreased by 20%. Fisk and Gould, who could afford to hire the best lawyers, were never held accountable for their profiteering, as favorable judges declined to prosecute. Gould remained a powerful force on Wall Street for the next 20 years. Fisk, who practiced a licentious lifestyle, was killed by a jealous rival on January 6, 1872. [16] Butterfield later resigned.

In an 1869 Congressional investigation into the gold panic, Democrats on the House investigation committee questioned why Julia Grant had received a package from the Adams Express Company containing money reported to be $25,000. Another source claims that the package was just $25.00, but nonetheless, it was highly unusual for a First Lady to receive cash in the mail. Corbin had bought gold at 33 margin and sold at 37, leaving Julia a profit of $27,000. Neither Mrs. Grant nor Mrs. Corbin testified in front of the investigation committee. In 1876 Secretary of State Hamilton Fish revealed to Grant in that Orville E. Babcock, another private secretary to the President, had also been involved in gold speculations in 1869. [20] [21]

New York custom house ring Edit

In 1871, the New York Custom House collected more revenue from imports than any other port in the United States. By 1872, two congressional investigations and one by the Treasury Office under Secretary George S. Boutwell looked into allegations of a corruption ring set up at the New York Custom House under two Grant collector appointments, Moses H. Grinnell and Thomas Murphy. Both Grinnell and Murphy allowed private merchants to store goods not claimed on the docks in private warehouses for exorbitant fees. Grant's secretaries Horace Porter and Orville E. Babcock and Grant's friend George K. Leet, owner of a private warehouse, allegedly shared in these profits. Secretary Boutwell advocated a reform to keep imports on company dock areas rather than being stored at designated warehouses in New York. Grant's third collector appointment, Chester A. Arthur, implemented Boutwell's reform. On May 25, 1870, Boutwell had implemented reforms that reduced public cartage and government costs, stopped officer gratuities, and decreased port smuggling, but on July 2, 1872, U.S. Senator Carl Schurz insinuated in a speech that no reforms had been undertaken and that the old abuses at the custom house continued. The New York Times claimed that Schurz's speech was "carefully prepared" and "more or less disfigured and discolored by error." The second thorough congressional investigation concluded that abuses either did not exist, had been corrected, or were in the process of being corrected. [22]

Star Route ring Edit

In the early 1870s, lucrative postal route contracts were given to local contractors on the Pacific coast and southern regions of the United States. These were known as "Star Routes" because an asterisk was placed on official Post Office documents. These remote routes were hundreds of miles long and went to the most rural parts of the United States by horse and buggy. Previously inaccessible areas on the Pacific coast received weekly, semi-weekly, and daily mail because of these routes. However, corruption ensued, with contractors paid exorbitant fees for fictitious routes and for providing low-quality postal service to the rural areas.

One contractor, F.P. Sawyer, made $500,000 a year on routes in the Southwest. [23] [24] To obtain these highly prized postal contracts, contractors, postal clerks, and various intermediary brokers set up an intricate ring of bribery and straw bidding in the Postal Contract Office. Straw bidding reached a peak under Postmaster General John Creswell, who was exonerated by an 1872 congressional investigation that was later revealed to have been tainted by a $40,000 bribe from western postal contractor Bradley Barlow. An 1876 Democratic investigation was able to temporarily shut down the ring, but it reconstituted itself and continued until a federal trial in 1882, under President Chester A. Arthur, finally shut down the Star Route ring. [23] [24] The conspirators, however, who were indicted and prosecuted, escaped conviction in both their first and second trials.

Salary grab Edit

On March 3, 1873, President Grant signed a law that increased the president's salary from $25,000 a year to $50,000 a year. The law raised salaries of members of both houses of the United States Congress from $5,000 to $7,500. Although pay increases were constitutional, the act was passed in secret with a clause that gave the congressmen $5,000 in bonus payouts for the previous two years of their terms. The Sun and other newspapers exposed the $5,000 bonus clause to the nation. The law was repealed in January 1874 and the bonuses returned to the treasury. [25] This pay raise proposal was submitted as an amendment to the government's general appropriations bill. Had Grant vetoed the bill, the government would not have any money to operate for the following fiscal year, which would have necessitated a special session of Congress. However, Grant missed an opportunity to make a statement by threatening a veto. [26]

Sanborn incident Edit

In 1874, Grant's cabinet reached its lowest ebb in terms of public trust and qualified appointments. After the presidential election of 1872, Grant reappointed all of his Cabinet with a single exception. Charges of corruption were rife, particularly from The Nation, a reliable journal that was going after many of Grant's cabinet members. Treasury Secretary George S. Boutwell had been elected to the U.S. Senate in the 1872 election and was replaced by Assistant Treasury Secretary William A. Richardson in 1873. Richardson's tenure as Treasury Secretary was very brief, as another scandal erupted. The government had been known to hire private citizens and groups to collect taxes for the Internal Revenue Service. [27] [28] This moiety contract system, although legal, led to extortion abuse in the loosely run Treasury Department under Sec. Richardson. [29] [30]

John B. Sanborn was contracted by Sec. Richardson to collect certain taxes and excises that had been illegally withheld from the government having received an exorbitant moiety of 50% on all tax collections. [29] [30] Treasury officials pressured Internal Revenue agents not to collect delinquent accounts so Sanborn could accumulate more. Although the collections were legal, Sanborn reaped $213,000 in commissions on $420,000 taken in taxes. A House investigation committee in 1874 revealed that Sanborn had split $156,000 of this with unnamed associates as "expenses." Although Richardson and Senator Benjamin Butler were suspected to have taken a share of the profit money, there was no paper trail to prove such transactions, and Sanborn refused to reveal with whom he split the profits. While the House committee was investigating, Grant quietly appointed Richardson to the Court of Claims and replaced him with the avowed reformer Benjamin H. Bristow. [31] On June 22, 1874, President Grant, in an effort of reform, signed a bill into law that abolished the moiety contract system. [29]

Department of Interior Edit

In 1875, the U.S. Department of the Interior was in serious disrepair due to corruption and incompetence. Interior Secretary Columbus Delano, who allowed profiteering to thrive in the department, was forced to resign from office on October 15, 1875. Delano had also given lucrative cartographical contracts to his son John Delano and Ulysses S. Grant's own brother, Orvil Grant. Neither John Delano nor Orvil Grant performed any work, nor were they qualified to hold such surveying positions. [32] [33]

On October 19, 1875, Grant made another reforming cabinet choice when he appointed Zachariah Chandler as Secretary of the Interior. Chandler immediately went to work reforming the Interior Department by dismissing all the important clerks in the Patent Office. Chandler had discovered that during Delano's tenure, money had been paid to fictitious clerks while other clerks had been paid without performing any services. Chandler next turned to the Department of Indian Affairs to reform another Delano debacle. President Grant ordered Chandler to fire everyone, saying, "Have those men dismissed by 3 o'clock this afternoon or shut down the bureau." Chandler did exactly as Grant had ordered. Chandler also banned bogus agents, known as "Indian Attorneys," who had been paid $8.00 a day plus expenses for, ostensibly, providing tribes with representation in the nation's capital. Many of these agents were unqualified and swindled the Native American tribes into believing they had a voice in Washington. [34]

Department of Justice Edit

Attorney General George H. Williams administered the United States Department of Justice (DOJ) with slackness. There were rumors that Williams was taking bribes in exchange for declining to prosecute pending trial cases. In 1875, Williams was supposed to prosecute the merchant house Pratt & Boyd for fraudulent customhouse entries. The Senate Judiciary Committee had found that Williams had dropped the case after his wife had received a $30,000 payoff. When informed of this, Grant forced Williams's resignation. Williams had also indiscreetly used Justice Department funds to pay for carriage and household expenses. [35] [36]

Whiskey Ring Edit

The worst and most famous scandal to hit the Grant administration was the Whiskey Ring of 1875, exposed by Treasury Secretary Benjamin H. Bristow and journalist Myron Colony. Whiskey distillers had been evading taxes in the Midwest since the Lincoln Administration. [37] Distillers of whiskey bribed Treasury Department agents who in turn aided the distillers in evading taxes to the tune of up to $2 million per year. The agents would neglect to collect the required excise tax of 70 cents per gallon, and then split the illegal gains with the distillers. The ringleaders had to coordinate distillers, rectifiers, gaugers, storekeepers, revenue agents, and Treasury clerks by recruitment, impressment, and extortion. [38] [39]

On January 26, 1875, Bristow ordered Internal Revenue officers in various sites to different locations, effective February 15, 1875, on a suggestion from Grant. This would keep the fraudulent officers off guard and allow investigators to uncover their misdeeds. Grant later rescinded the order on the grounds that advance notice would cause the ringleaders to cover their tracks and become suspicious. [40] Rescinding Secretary Bristow's order would later give rise to a rumor that Grant was interfering with the investigation. Although moving the supervisors most certainly would have disrupted the ring, Bristow conceded that he would need documentary evidence on the ring's inner workings to prosecute the perpetrators. Bristow, undaunted, kept investigating, and found the ring's secrets by sending Myron Colony and other spies to gather whiskey shipping and manufacturing information. [38]

On May 13, 1875, with Grant's endorsement, Bristow struck hard at the ring, seized the distilleries, and made hundreds of arrests. The Whiskey Ring was broken. Bristow, with the cooperation of Attorney General Edwards Pierrepont and Treasury Solicitor Bluford Wilson, launched proceedings to bring many members of the ring to trial. Bristow had obtained information that the Whiskey Ring operated in Missouri, Illinois, and Wisconsin. Missouri Revenue Agent John A. Joyce and two of Grant's appointees, Supervisor of Internal Revenue General John McDonald and Orville E. Babcock, the private secretary to the President, were eventually indicted in the Whiskey Ring trials. [41] Grant's other private secretary Horace Porter was also involved in the Whiskey Ring according to Solicitor General Bluford Wilson. [42]

Special prosecutors appointed Edit

Grant then appointed a special prosecutor, former senator John B. Henderson, to go after the ring. Henderson, while in the Senate, had been the administration's worst critic, and Grant appointed him to maintain integrity in the Whiskey Ring investigation. Henderson convened a grand jury, which found that Babcock was one of the ringleaders. Grant received a letter to this effect, on which he wrote, "Let no guilty man escape." [43] It was discovered that Babcock sent coded letters to McDonald on how to run the in St. Louis. During the investigation McDonald claimed he gave Babcock $25,000 from the divided profits and even personally sent him a $1,000 bill in a cigar box. [43]

After Babcock's indictment, Grant requested that Babcock go through a military trial rather than a public trial, but the grand jury denied his request. In a reversal of his "let no guilty man escape," order to Sec. Bristow, Grant unexpectedly issued an order not to give any more immunity to persons involved in the Whiskey Ring, leading to speculation that he was trying to protect Babcock. Although this reversal had the appearance of not letting the guilty get away, the prosecutor's trial cases were made more difficult to prove in court. The order caused strife between Sec. Bristow and Grant, since Bristow needed distillers to testify with immunity in order to pursue the ringleaders. [37] Prosecutor Henderson, himself, while going after members of the ring in court accused Grant of interfering with Secretary Bristow's investigation. [44] accusation angered Grant, who fired Henderson as special prosecutor. Grant then replaced Henderson with James Broadhead. Broadhead, though a capable attorney, had little time to get acquainted with the facts of Babcock's case and those of other Whiskey Ring members. At the trial a deposition was read from President Grant stating that he had no knowledge that Babcock was involved in the ring. The jury listened to the president's words and quickly acquitted Babcock of any charges. Broadhead went on to close out all the other cases in the Whiskey Ring. [44] McDonald and Joyce were convicted in the graft trials and sent to prison. On January 26, 1877, President Grant pardoned McDonald. [38]

President Grant's deposition Edit

The Whiskey Ring scandal even came to the steps of the White House. There were rumors that Grant himself was involved with the ring and was diverting its profits to his 1872 re-election campaign. Grant needed to clear his own name as well as Babcock's. Earlier, Grant had refused to believe Babcock was guilty even when Bristow and Wilson personally presented him with damaging evidence, such as two telegrams signed "Sylph" Babcock suggested that the signature was that of a woman giving the president "a great deal of trouble", hoping that Wilson would back off for fear of igniting a presidential sex scandal, but Wilson was not bluffed. [45]

On the advice of Secretary of State Hamilton Fish, the President did not testify in open court but instead gave a deposition in front of a congressional legal representative at the White House. Grant was the first and, to date, only president ever to testify for a defendant. The historic testimony came on Saturday, February 12, 1876. Chief Justice Morrison R. Waite, a Grant appointment to the U.S. Supreme Court, presided over the deposition. [38] The following are excerpts from President Grant's deposition.

Eaton: "Have you ever seen anything in the conduct of General Babcock, or has he ever said anything to you, which indicated to your mind that he was in any way interested in or concerned with the Whiskey Ring at St. Louis or elsewhere?" President Grant: "Never." [40] Eaton: "Did General Babcock on or about April 23, 1875, show you a dispatch in these words: "St. Louis, April 23, 1875. Gen. O.E. Babcock, Executive Mansion, Washington, D.C. Tell Mack to see Parker of Colorado & telegram to Commissioner. Crush out St. Louis enemies." Cook: "Objection." Made for the record. President Grant: "I did not remember about these dispatches at all until since the conspiracy trials have commenced. I have heard General Babcock's explanation of most or all of them since that. Many of the dispatches may have been shown to me at the time, and explained, but I do not remember it." Eaton: "Perhaps you are aware, General, that the Whiskey Ring have persistently tried to fix the origins of that ring in the necessity for funds to carry on political campaigns. Did you ever have intimation from General Babcock, or anyone else in any manner, directly or indirectly, that any funds for political purposes were being raised by any improper methods?" Cook: "Objection." Made for the record. President Grant: "I never did. I have seen since these trials intimations of that sort in the newspapers, but never before." Eaton: "Then let me ask you if the prosecuting officers have not been entirely correct in repelling all insinuations that you ever had tolerated any such means for raising funds." Cook: "Objection." Made for the record. President Grant: "I was not aware that they had ever attempted to repel any insinuations." [38]

On February 17, 1876, U.S. Circuit Justice John F. Dillon, another Grant appointment, overruled Cook's objections, declaring the questions admissible in court. Grant, who was known for a photographic memory, had many uncharacteristic lapses when it came to remembering incidents involving Babcock. The deposition strategy worked and the Whiskey Ring prosecution never went after Grant again. During Babcock's trial in St. Louis the deposition was read to the jury. Babcock was acquitted at trial. After the trial, Grant distanced himself from Babcock. After the acquittal, Babcock initially returned to his position as Grant's private secretary outside the President's office. At public outcry and the objection of Hamilton Fish, Babcock was dismissed as private secretary and focused on another position that he had been given by Grant in 1871: superintending engineer of public buildings and grounds. [38] [41]

Grant's Pulitzer Prize winning biographer, William S. McFeely, stated that Grant knew Babcock was guilty and perjured himself in the deposition. According to McFeely the "evidence was irrefutable" against Babcock, and Grant knew this. McFeely also points out that John McDonald also stated that Grant knew that the Whiskey Ring existed and perjured himself to save Babcock. Grant historian Jean Edward Smith counters that evidence against Babcock was "circumstantial" and the St. Louis jury acquitted Babcock "in the absence of adequate proof." More recently, (2017) historian Charles Calhoun and author of "The Presidency of Ulysses S. Grant" concludes correspondence between Babcock and his lawyers "leaves little doubt of Babcock's complicity in the Whiskey Ring." [46]

Many of Grant's friends who knew him claimed that the President was "a truthful man" and it was "impossible for him to lie." Yet Treasury Clerk A. E. Willson told future Supreme Court Justice John Harlan, "What hurt Bristow most of all and disheartened him is the final conviction that Grant is himself in the Ring and knows all about [it]" [47] Grant's popularity, however, decreased significantly in the country as a result of his testimony and after Babcock was acquitted in the trial. Grant's political enemies used this deposition as a launchpad to public office. The New York Tribune stated that the Whiskey Ring scandal "had been met at the entrance of the White House and turned back." However, the national unpopularity of Grant's testimony on behalf of his friend Babcock ruined any chances for a third term nomination. [48] [49] [50]

Bristow's investigation results Edit

When Secretary Benjamin Bristow struck suddenly at the Whiskey Ring in May 1875, many people were arrested and the distilleries involved in the scandal were shut down. Bristow's investigation resulted in 350 federal indictments. There were 110 convictions, and three million dollars in tax revenues were recovered from the ring. [36] [48] [51]

Trader Post ring Edit

Grant had no time to recover after the Whiskey Ring graft trials ended, for another scandal erupted involving War Secretary William W. Belknap. A Democratic House investigation committee revealed that Belknap had taken money in exchange for an appointment to a lucrative Native American trading post. In 1870, responding to extensive lobbying by Belknap, Congress had authorized the Secretary of War, to award private trading post contracts to military forts throughout the nation. [52] Native Americans would come into the forts and trade for food, weapons, and clothing. Additionally, U.S. soldiers stationed at the forts purchased costly supplies. Both Indians and soldiers generated huge profits at the trading posts. The profit money from Fort Sill was shared by Belknap and his wives, in order for the Belknap's to live an extravagant Washington D.C. lifestyle.

Belknap's wife Carrie, with Belknap's authority and approval, managed to secure a private trading post at Fort Sill for a personal friend from New York City, Caleb P. Marsh. An illicit contract arrangement was set up by Belknap, between Carrie Belknap, Caleb P. Marsh, and incumbent contract holder John S. Evans, in which Carrie Belknap and Marsh would receive $3,000 every quarter, splitting the proceeds, while Evans would be able to retain his post at Fort Sill. Carrie Belknap died within the year, but Belknap and his second wife continued to accept payments, though they were smaller due to a dip in Fort Sill's profits, after the Panic of 1873. By 1876 Belknap had received $20,000 from the illicit arrangement. On February 29, 1876, Marsh testified in front of a House investigation committee headed by Representatives Lyman K. Bass and Hiester Clymer. During the testimony, Marsh testified that Belknap and both his wives had accepted money in exchange for the lucrative trading post at Fort Sill. The scandal was particularly upsetting, in this Victorian age, since it involved women. [53] [54] Lieut. Col. George A. Custer later testified to the Clymer Committee on March 29 and April 4 that Sec. Belknap had received kickback money from the profiteering scheme of post traders through the resale of food meant for Indians. [55]

On March 2, 1876, Grant was informed by Benjamin Bristow at breakfast of the House investigation against Secretary Belknap. After hearing about Belknap's predicament, Grant arranged a meeting with Representative Bass about the investigation. However, Belknap, escorted by Interior Secretary Zachariah Chandler, rushed to the White House and met with Grant before his meeting with Representative Bass. Belknap appeared visibly upset or ill, mumbling something about protecting his wives' honor and beseeching Grant to accept his resignation "at once." Grant, in a hurry to get to a photography studio for a formal portrait, regretfully agreed and accepted Belknap's resignation without reservation. [54]

Grant historian Josiah Bunting III noted that Grant was never put on his guard when Secretary Belknap came to the White House in a disturbed manner or even asked why Belknap wanted to resign in the first place. Bunting argues that Grant should have pressed Belknap into an explanation for the abrupt resignation request. [56] Grant's acceptance of the resignation indirectly allowed Belknap, after he was impeached by the House of Representatives for his actions, to escape conviction since he was no longer a government official. Belknap was acquitted by the Senate, escaping with less than the two-thirds majority vote needed for conviction. Even though the Senate voted that it could put private citizens on trial, many senators were reluctant to convict Belknap since he was no longer Secretary of War. It has been suggested that Grant accepted the resignation in a Victorian impulse to protect the women involved. [53]

Cattellism Edit

Congress allotted Secretary George M. Robeson's Department of the Navy $56 million for construction programs. In 1876, a congressional committee headed by Representative Washington C. Whitthorne discovered that $15 million of that sum was unaccounted for. The committee suspected that Robeson, who was responsible for naval spending, embezzled some of the missing money and laundered it in real estate transactions. This allegation remained unproven by the committee. [57]

The main charge against Robeson was taking financial favors from Alexander Cattell & Co., a grain contractor, in exchange for giving the company profitable contracts from the Navy. An 1876 Naval Affairs committee investigation found Robeson to have received such gifts as a team of horses, Washington real estate, and a $320,000 vacation cottage in Long Branch, New Jersey, from Alexander Cattell & Company. The same company also paid off a $10,000 note that Robeson owed to Jay Cooke and offered itself as an influence broker for other companies doing business with the Navy, thus turning away any competitive bidding for naval contracts. Robeson was also found to have $300,000 in excess to his yearly salary of $8000. The House Investigation committee had searched the disorganized books of Cattell, but found no evidence of payments to Robeson. Without enough evidence for impeachment, the House ended the investigation by admonishing Robeson for gross misconduct and claimed that he had set up a system of corruption known as Cattellism. [58] [59]

In a previous investigation that Charles Dana headed in 1872, Robeson had been suspected of awarding a $93,000 bonus to a building contractor in a "somewhat dangerous stretch of official authority" known as the Secor claims. A competent authority claimed that the contractor had already been paid in full and there was no need for further reward. Robeson was also charged with awarding contracts to ship builder John Roach without public bidding. The latter charge proved to be unfounded. The close friendship with Daniel Ammen, Grant's longtime friend growing up in Georgetown, Ohio, helped Robeson keep his cabinet position. [57] [58]

On March 18, 1876, Admiral David D. Porter wrote a letter to William T. Sherman, ". Our cuttle fish [Robeson] of the navy although he may conceal his tracks for a while in the obscure atmosphere which surrounds him, will eventually be brought to bay. " Robeson later testified in front of a House Naval Committee on January 16, 1879, about giving contracts to private companies. Robeson was asked about the use of old material to build ironclads and whether he had the authority to dispose of the Puritan, an outdated ironclad. Although Robeson served ably during the Virginius Affair and did authorize the construction of five new Navy ships, his financial integrity remained in question and was suspect during the Grant administration. To be fair, Congress gave Robeson limited funding to build ships and as Secretary was constantly finding ways to cut budgets. [57] [58]

Safe burglary conspiracy Edit

In September 1876, Orville E. Babcock was involved in another scandal. [60] Corrupt building contractors in Washington, D.C., were on trial for graft when bogus Secret Service agents working for the contractors placed damaging evidence into the safe of the district attorney who was prosecuting the ring. On the night of April 23, 1874, hired thieves opened the safe, using an explosive to make it appear that the safe had been broken into. One of the thieves then took the fake evidence to the house of Columbus Alexander, a citizen who was active in prosecuting the ring. [61] The corrupt agents "arrested" the "thieves" who then committed perjury by signing a document falsely stating Alexander was involved in the safe burglary.

The conspiracy came apart when two of the thieves turned state evidence and Alexander was exonerated in court. Babcock was named as part of the conspiracy, but later acquitted in the trial against the burglars evidence suggests that the jury had been tampered with. [37] Evidence also suggests that Babcock was involved with the swindles by the corrupt Washington contractors' ring and with those who wanted to get back at Columbus Alexander, an avid reformer and critic of the Grant Administration. In 1876 Grant dismissed Babcock from the White House under public pressure due to Babcock's unpopularity. Babcock continued in government work, and became Chief Light House Inspector. In 1883, Babcock drowned at sea at the age of 48 while supervising the building of Mosquito Inlet Light station. [62]

Lakota treaty breach Edit

The breach of a treaty between the Lakotas and the United States, signed in 1868, the year before Grant took office, was engineered by Grant and his cabinet, in February 1876, in order to accommodate miners seeking gold in the Black Hills. Known as the Paha Sapa (literally, "hills that are black"), this area was essential to the survival of the Lakota living in the Unceded Territory (versus those living on the Great Sioux Reservation), as a game reserve. [63]

Watch the video: Exploring the Abandoned Black Friday Gold Mine AF6 and DE6 Levels (January 2022).