On this day, more colorfully known as "Black Friday," gold prices plummeted, sending the markets into chaos. At the root of the wreckage was an old-fashioned swindle, engineered by flamboyant financier Jay Gould and his robber baron partner, James Fisk. Gould and Fisk conspired to inflate and then corner the gold market, primarily by spreading a rumor that President Grant was about to stop the sale of government gold. Grant, who was better suited to the battlefield than office, initially bought into their logic, due, in part, to his belief that the sale of government gold would hurt farmers and small-time entrepreneurs. The president eventually saw through the scheme and, in response, put $4 million worth of gold on the market. The price of gold in specie, which had previously swelled to $163.50, promptly shrank to $133. Investors were ruined and the economy went into a tailspin. The swindle ultimately took a toll on two of its main players. It blemished Grant's record, raising suspicions about the war hero's competency. And Gould surreptitiously dumped his share of the gold before the drop in specie prices, leaving Fisk with a hefty loss on the deal.
- source: www.history.com
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