Sunday, June 2, 2013

63. Jim Fisk, part 2: The Great Gold Corner of 1869, or, Can't a fellow have a little fun?

            Most of us have dreamed of doing the impossible, but few have really attempted it.  In 1869 Jay Gould and Jim Fisk really attempted it, and in so doing convulsed markets on both sides of the Atlantic.  This is their story, continuing the saga of Jim Fisk, which began two weeks ago in post #61.

            To corner gold:  speculators on Wall Street had dreamed of it, but no one had ever tried to do it,  since the Treasury Department could sell just a fraction of its gold and smash the corner.  But one day in the spring of 1869 Jay Gould suggested to his partner Jim Fisk that they do exactly that.  Fisk probably raised the usual objections, but Gould countered with the assurance that the Treasury would not sell gold.  How could he be sure?  Because he had made the acquaintance of one Abel Corbin, a speculator of somewhat dubious reputation, who had married the sister of President Ulysses S. Grant.  Jay Gould had made Mr. Corbin’s acquaintance and explained to him that if the Treasury didn’t sell gold, farmers would get good prices for their crops, workers would prosper, industry expand, and the whole economy benefit.  But if the Treasury  -- God forbid! --  sold gold, the whole nation would be stricken.  Mr. Corbin was very impressed.  So when he visited the President recently, he advised him against selling gold.

            By now, Jim Fisk’s eyes must have grown wide with wonder.  Did Jay Gould have the President fixed?  Just about.


            Except as small, bright specks of glint, Jim Fisk had never seen gold, didn’t know what the substance in bulk looked like.  He only knew that it was valued something fierce; that men had toiled and fought and killed for it; that it was dug out of the earth as dust or bits of rock and somehow got converted into big metal chunks – bars, maybe? --  that were locked away in vaults; and that, in the form of paper contracts and certificates, it was traded daily in the Gold Room, where no one had ever cornered it or even dreamed of trying.  To corner gold:  in his mind the impossible – the unimaginable – became a dazzling, tantalizing prospect.  He tingled at the thought of it.

            In a couple of weeks, Gould continued, the President would be passing through New York on his way to a Peace Jubilee in Boston.  What finer way for him to get from here to there than on one of Jim Fisk steamers, with the two of them as his personal escorts?  Mr. Corbin thought it an excellent idea, would put it to the President at the earliest opportunity.  At the merest possibility of having the Chief Executive to themselves all the way to Boston, the duo simmered with excitement.  But would it really happen?

            On the afternoon of June 15, 1869, at the Chambers Street dock, where his Providence was tied up with its decks scrubbed, brass gleaming, canaries warbling, and pennants aflutter in the breeze, Jim Fisk strutted in his naval uniform and lavender kid gloves, sporting a diamond breastpin, his mustache fiercely waxed.  For this event beyond belief he had marshaled all his reserves of daring, his armament of Flash.  Amid booming cannon and the blare of a band, the President and his entourage arrived.  Fisk at once introduced himself, welcomed the President, and waved him aboard the Providence.

Chances are, he didn't even laugh at Fisk's jokes.

            Ulysses S. Grant hardly had a martial air.   A bit of a sloucher, he mumbled a greeting and offered a handshake, then shuffled aboard with other dignitaries; Fisk waved him to the grand saloon.  There, as the Providence glided away from the dock, the admiral and Jay Gould offered cigars and champagne, then deftly initiated a discussion about the merits of not selling gold. 

            Bumper harvests were expected, Gould expounded in his silver-toned voice.  If the price of gold stayed high, farmers – the very bedrock of the nation – would get good prices for their crops, millions of bushels of grain would be shipped, railroads would thrive, and tons of breadstuffs would be exported to Europe, bringing in another bumper harvest in the form of foreign exchange.  Jim Fisk vigorously agreed.

            Some of the gentlemen present evinced glimmerings of doubt, others nodded, but the President himself, square-jawed with a close-cut, grizzled beard, proved to be as mumbly and reticent as his hosts were expansive and verbose.  All the way to Boston everyone opined except the presidential sphinx, who puffed on his cigar, said nothing.

            “What do you think, Mr. President?” Fisk finally mustered the temerity to ask.

            “There’s a certain fictitiousness about the country’s prosperity,” he said, flicking an ash from his cigar.  “The bubble might as well be tapped in one way as another.”

            Chilled to the quick, Fisk and Gould exchanged a frantic glance, redoubled their efforts.

File:Great Peace Jubilee, Boston, June 1869.jpg
The Peace Jubilee.  For Admiral Fisk, a stage
that proved irresistible.

            In Boston, where the President and other notables proceeded to the Jubilee amid great acclaim, Admiral Fisk in full naval regalia accompanied them, acknowledging with smiles and gestures those large portions of the applause that he thought intended for himself.  Some spectators took him for Admiral Farragut; others, for the President.  From then on he was known as Jubilee Jim.

            Two days later, when the President passed through New York on his way back to Washington, the duo entertained him, his wife, and the Corbins in a box at Fisk’s Fifth Avenue Theater, chatting with the Chief Executive in full view of an astonished audience packed from dome to pit.  The two ladies swayed gently to the strains of Offenbach’s La Périchole, and Abel Corbin probably quickened to a cancan, but the President watched expressionless, as withdrawn and enigmatic as ever.

            Viewing the box from a distance, respectables in the audience wondered how Grant could appear in such company.  What next?  Would the brazen Fisk dare to present his mistress to the President?  Bets were placed by some, but Josie, though pent with longing and splendidly attired, remained in her own box opposite, briskly fluttering her fan while stealing glances at her Jimjim conversing with the President.

            Over the weeks that followed, Jay Gould had numerous interviews with his newfound friend Mr. Corbin, a jowly old man with thinning hair and a slick manner, who assured him of his influence with the President.  Gould then assured Fisk that, thanks to Corbin’s intervention, the Secretary of the Treasury was “all right,” as was the Assistant Secretary for New York, and even the President himself!

            Nagged by doubts, Fisk went to see Corbin himself.  In his parlor on West Twenty-seventh Street, Abel Corbin swore piously that he had the President’s ear: the Treasury would not sell gold.  Fisk came away half convinced, half teased by flutterings of doubt.  Corbin struck him as slick as a freshly printed bank note, as innocent as a newborn babe.  Could his whiny earnestness and mealy-mouthed piety be trusted?  But Gould assured him that, with help from Gould himself, Corbin was into the speculation for thousands.  Impressed, Jim Fisk too bought gold.

            On the night of July 14, while the masters of Erie were preoccupied with the price of a precious metal, two Erie trains collided in Pennsylvania; nine passengers died in the flames, three of them burned beyond recognition.  “The long, dismal, and bloody catalogue of disasters that marks the history of the Erie Railroad," said the New York Herald, “is made again to bear another burden of human slaughter.”

            Steadily the price of gold rose in the Gold Room, as feverish brokers bought and sold before a crowd of spectators that each day grew larger and more excited, drawn there by rumors of a prodigious feat unheard of: an attempt to corner gold.

            “It can’t be done!” said some.

            “It is being done,” said others.

            Gold: the mere idea of it, that wondrous metal coveted by all but seen by few – less a hard reality than a shimmering illusion, a dream -- gripped the city, the nation.  And it was being cornered on Wall Street!

            On September 2, when Grant, en route to Saratoga, came through New York and breakfasted with the Corbins, Gould called on Corbin and was admitted, though he didn't see Grant.  Gould evidently held a whispered conference with Corbin while the President was in another room and received further assurance that the Treasury would not sell gold.  Exultant, Gould bought more gold.

            But the situation changed dramatically on the evening of Wednesday, September 22, when he called again on Corbin, who showed him a letter that Mrs. Grant had sent to Mrs. Corbin, Grant's sister: "Tell Mr. Corbin that the President is very much distressed by your speculations and you must close them as quick as you can."  Obtuse as he was, the President had finally caught on.

           "Mr. Corbin," said Gould, "I am undone if that letter gets out."

           There was now mistrust between the two, and Corbin wanted out.  Gould promised to think this over, and Corbin agreed to keep the letter to himself.  But Gould now knew for certain that he was dealing with a fixer who couldn't fix.  Having bought fifty million in gold on margin, he had to start selling even while he continued to buy.  Who but Jay Gould could contemplate such a double game?  Of all this, not a word to Fisk.

            On Thursday, September 23, while Jay Gould hovered in the offing, Jim Fisk came bounding and whooping into the Gold Room.  Gold was at 137, he said, but he'd bet any part of $50,000 that it would go over 145.  So unsettled were the bears by now, he found no takers.  Meanwhile it was being whispered that the President and his cabinet were in the game up to their ears.  With gold in turmoil, stocks were plunging, money was scarce, trade disrupted, and markets shaken on both sides of the ocean.  SELL  GOLD  urged an avalanche of telegrams to Washington, while honest men and connivers alike rained curses and threats on Prince Erie, who when the Gold Room closed with gold at 144, departed merrily with a cigar in his teeth at an angle.  Despairing speculators made a dash for Delmonico’s on Broadway, crowded the bar, drank their whiskey straight.  By all accounts, panic loomed, chaos threatened.  Would the government sell gold, or not?

            On Friday morning Jim Fisk reappeared on Broad Street in a stylish carriage, flanked by two glittering actresses under laced domes of parasols, amid the stares and oaths of onlookers.  Well aware that he might be mobbed in the Gold Room, he went to his broker’s office just across the street, bade farewell to the parasols, then commandeered a back room for Gould and himself.

            All morning the Gold Room was jammed with hoarse-voiced brokers and speculators, yelling and jostling, some drunk, all frantic, many of them rushing at intervals to splash water on their fevered faces at the cupid-and-dolphin fountain bubbling in the middle of the room, while a mechanical indicator overhead proclaimed the price of gold.  Small operators had been ruined the previous day; now the bigger bearish houses were crumbling.  A huge crowd seethed in the street outside, while stocks plummeted and business throughout the country was paralyzed. 

The crowd outside Gould's office, just across Broad Street from the Gold Room,
on September 24, 1869.  From a publication of the time.

            In their back office across the street, Jay Gould, a mastermind of cunning but a glutton for anxiety, was tearing stray bits of paper to pieces and whispering orders to messengers, while Jim Fisk strutted up and down, coat off, gripping a gold-headed cane as he dispatched more orders to buy.

            “Put it up to one fifty!  … Put it up to one fifty-five!  …  I’m the Napoleon of Wall Street!”

            With each new high a roar erupted in the Gold Room, echoed by a roar in the street: music to Fisk’s ears.  At 12:30 a deafening howl was heard: gold had hit 160; men were weeping or fainting.

            Jim Fisk exulted.  A peddler from Vermont had cornered the world’s most precious metal!  His spirit soared, his feet barely touched the ground.

            Then, suddenly, a messenger rushed in with dire tidings: the Treasury was selling gold. 

            “That can’t be!” shrieked Fisk.

            Chaos in the Gold Room.  Within minutes the price plummeted to 135; the corner was bust, and with it innumerable denizens of Wall Street.  Several brokers were reported to be raving; one had shot himself.  Standing in a ring of shredded paper, Jay Gould was distraught.

File:Black Friday 1869.jpg
Blackboard of the Gold Room on September 24.  Gold peaked at 162 1/2 (2nd column), then
plunged to 133.  This photograph was used as evidence in the 1870 Congressional hearing.

            “I’m forty miles down the Delaware!” shouted Napoleon Fisk, dazed, out millions.  “Old Corbin run a saw right through us!  We’re skinned!  We’re hung out to dry!”

            Suddenly they heard a commotion outside -- “Lynch the bastards!”  “Hang them!”
“Shoot them!” – as a mob of ruined speculators burst into their broker’s front office.  In a flash, portly Jim Fisk, coatless, and frail Jay Gould were out a side door and darting down the street.  Threats and oaths pursued them as they dashed past startled bystanders and yelping dogs toward the bustling throngs of Broadway.  There they lost their pursuers in the crowd, hailed a cab, and rushed uptown.

            Arriving at the Opera House, the fugitives took refuge behind its thick marble walls, guarded by a squad of Erie stalwarts.  While Jay Gould, shaken to the depths, collapsed on a couch in Fisk’s office, Jim Fisk took sober stock: a fortune lost, markets convulsed, mortal threats still ringing in his ear …  What a lark!   Soon after, performing ablutions at a rose-tinted marble sink adorned with sculpted nymphs, he washed away the toil of the day.  Clean-shirted, donning another coat, he joined Gould in the Erie banquet hall to dine sumptuously; he gobbled, Gould nibbled. 

            Gould, having assembled the scattered fragments of his being, now probably confessed to Fisk that while Fisk was buying, he had been selling.  So Gould had limited their losses and presumably -- there is no record of this, but the assumption is safe, since he and Fisk remained friends -- presumably he shared his profits with Fisk.  But Fisk had contracts to buy gold; he owed millions.  The solution: repudiate them -- in Wall Street parlance, "squat" on them -- don’t pay.  This would mean scores of lawsuits, but their pal Judge Barnard could enjoin the plaintiffs; it would take them years to even try to collect.  So from the depths of his marble fortress, Jim Fisk squatted on his contracts, got sued and denounced and cursed.

            “Rogues!  Knaves!  Thieves!” cried Stock Exchange and press, as tides of scandal, washing over Wall Street, lapped at the White House gates.  The President had in fact had no part in the corner, but his fleeting acquaintance with the conspirators seemed to imply otherwise.  Meanwhile everyone was talking about it: September 24, 1869 -- Black Friday.

            For two weeks Jim Fisk and Jay Gould stuck it out in Castle Erie, conducting business by wire, sipping champagne and feasting on pheasant and quail, while speculators, process servers, and journalists pounded at the door downstairs, until shooed off by Erie thugs reinforced by Tweed’s police.  When word spread that Fisk had been shot dead by a ruined victim, toasts to the assassin were raised at Delmonico’s, until the report proved false.

            At this point Jim Fisk may well have reflected.  No one was toasting the death of Jay Gould.  Had Jay wangled him into this, so Fisk would bear not just the losses but the blame?  Who could fathom Jay Gould’s mind, where schemes masked schemes, subtleties enhanced subtleties, and cunning underlay cunning?      

            Meanwhile Abel Corbin, his role in the affair exposed, had taken to his bed and was whining and weeping to reporters.  Said Fisk, “He’s bleating like an unweaned calf!”

            A reporter was finally admitted into the marble confines of the Opera House.  Announced Gould, “I had nothing to do with the panic.”  Said Fisk, “Can’t a fellow have a little fun?” 

            Months later, freed from their fortress at last, the two conspirators were summoned before the House Banking and Finance Committee to testify with others about the Black Friday panic in gold.  Abel Corbin admitted to a tiny speculation: “Not for myself.  For the sake of a lady, my wife.”  Jay Gould explained that civic duty had caused him at great risk to support the price of gold for the good of the Erie Railway and the nation.  When Fisk’s turn came, he mounted a buoyant spiel about the complexities of railroading and the intricacies of gold, which he too denied ever having tried to corner. 

            Chairman James A. Garfield, a future president, was at a loss in this maze of deceit.   Millions had been at stake that day, yet no one admitted to a profit.  Where did all that money go?”

            “Mr. Garfield,” said Fisk, “it went where the woodbine twineth.”

            Silence among the Congressmen, then ripples, tides of laughter.

            The Committee  vigorously denounced Fisk, Gould, Corbin, and others, but since there was no law against speculating in gold or cozying up to a President, they otherwise escaped unscathed.

File:Gold Bars.jpg
These are what it was all about, though no one involved in the
corner ever laid eyes on them.  Yes, they really do exist, in the
vaults of Fort Knox and elsewhere.

            On New Year’s Day, when gentlemen in Gotham went calling on ladies, and ladies stayed home to receive, Jim Fisk remained with Josie Mansfield, his lady friend, at 359 West Twenty-third Street to play host to a galaxy of callers.  Boss Tweed and his Tammany cronies, judges, bankers, and railroad presidents rubbed elbows in the parlors, treading on thick carpets under frescoed ceilings as they nibbled assorted goodies while quaffing whiskey and champagne.  Among them was Judge Barnard, black locks lustrous as always, eyes flashing, diamond studs gleaming. 

            Also present, no doubt, was Edward S. Stokes, a dapper young man about town dressed in the very pinnacle of fashion, whom Fisk had taken as a partner in an oil deal.  On this or another occasion, Fisk introduced him to Josie, thus setting in motion the engine of his fate.  But Fisk, with the turmoil of gold -- aside from seventeen lawsuits -- behind him, surely proposed a toast to the New Year, 1870, confident that it too would be a ripsnorter.  For Jubilee Jim, the sky was the limit.

            Scandal tours in the Big Apple:  Most cities like to put their best foot forward; they don't want to show their warts.  (If that's a mixed metaphor, forgive.)  But not New York.  According to an article in last Friday's Times, two tour companies now offer guided tours of Manhattan sites where celebrities have misbehaved.  One sponsored by the Post and costing forty-nine dollars revisits sites immortalized by that tabloid's headlines.  Thus the tour bus, going past the Helmsley Park Lane Hotel on Central Park South, recalls the headline "Rich Bitch" hailing the death of Leona Helmsley, the hotel's owner, who left twelve million dollars to her Maltese lap dog.  Passing the fabled Plaza Hotel, it salutes film and TV actor Charlie Sheen's ravaging his room after a fun-filled night with an escort, convinced she had stolen his $165,000 watch, as reported in the headline "Trashed!  Sheen in Coke-&-Hooker Rampage at the Plaza."  But the Post's most famous headline, "Headless Body in Topless Bar," is not included, since it would involve a long trip out to Jamaica in Queens.  These tours must be successful, since a rival company has initiated similar tours.  Where but in New York?

            Coming next:  A West Village Murder and the Fear of Night, prompted by the recent murder of a gay man not far from my apartment.  Our irrational but very real fear of night.  Still in the offing:  Trees; Farewells; Go Ahead: The Mania and Disease of Progress; and Who is a hero?

(c)  2013  Clifford Browder

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