Volume II Part 13 (1/2)
Speculation in gold was not all on one side. There were speculators who were anxious to break down the price of gold, and between the lines I could read the condition of the respective parties from whom I received letters. Under date of September 23, I received a letter from a prominent house in New York in which the writer said: ”I am actuated to again portray to you the state of financial affairs as they now exist in this city. The speculative advance in gold has brought legitimate business almost to a standstill, owing to the apprehension of a corner, which from appearances may appear at any moment.”
It did not follow that the writer of the letter was ”short on gold,” as the phrase is. I had, however, in my possession at the time a list of persons in New York who were supposed to be contestants, some for an advance in gold and others for a fall. The writer of the letter was among those whose names had been given to me as speculators for a fall in gold. In this connection I may say that it was no part of my policy to regulate affairs in Wall Street or State Street or Lombard Street.
Until it became apparent that the operations in New York affected largely and seriously the business interests of the country, and until it became apparent that the Treasury receipts were diminished by the panic that had taken possession of the public, I refrained from any interference with those who were engaged either in forcing up or forcing down the price of gold.
Under date of the 24th day of September, I received a letter from my special and trusted correspondent in the city of New York in which I find this statement: ”This has been the most dreadful day I have ever seen in this city. While gold was jumping from forty-three to sixty- one the excitement was painful. Old, conservative merchants looked aghast, n.o.body was in their offices, and the agony depicted on the faces of men who crowded the streets made one feel as if Gettysburg had been lost and that the rebels were marching down Broadway. Friends of the Administration openly stated that the President or yourself must have given these men to feel that you would not interfere with them or they would never dare to rush gold up so rapidly. In truth, many parties of real responsibility and friends of the Government openly declared that somebody in Was.h.i.+ngton must be in this combination.”
The last sentence in this quotation unfolds the policy which had guided Gould and Fisk and their a.s.sociates from April to the culmination of their undertaking, the 24th day of September. As far as I know, the effort had been directed chiefly to the support of a false theory that the President was opposed to the sale of gold, especially during the autumn months, when a large amount of currency is required, or in those days was supposed to be required, for ”the moving,” as it was called, of the produce of the West to the sea coast for s.h.i.+pment to Europe.
They even went so far as to allege that the President had ordered the Secretary of the Treasury to suspend the sale of gold during the month of September, for which there was no foundation whatever.
Indeed, up to the 22d of September, when I introduced the subject of the price of gold to the President, he had neither said nor done anything, except to write a letter from New York City under date of September 12, 1869, in the following words:
NEW YORK CITY, _September_ 12, 1869.
DEAR SIR: I leave here for western Pennsylvania to-morrow morning and will not reach Was.h.i.+ngton before the middle or last of next week. Had I known before making my arrangements for starting that you would be in this city early this week, I would have remained to meet you. I am satisfied that on your arrival you will be met by the bulls and bears of Wall Street, and probably by merchants, too, to induce you to sell gold, or pay the November interest in advance, on the one side, and to hold fast on the other. The fact is, a desperate struggle is now taking place, and each party wants the Government to help him out. I write this letter to advise you of what I think you may expect, to put you on your guard.
I think, from the lights before me, I would move on without change until the present struggle is over. If you want to write me this week, my address will be Was.h.i.+ngton, Pennsylvania. I would like to hear your experience with the factions, at all events, if they give you time to write. No doubt you will have a better chance to judge than I, for I have avoided general discussion on the subject.
Yours truly, U. S. GRANT.
Hon. GEORGE S. BOUTWELL, _Secretary of Treasury_.
At a meeting, which was accidental, as far as the President was concerned, on board one of Fisk and Gould's Fall River steamers, when he was on his way to Boston, in June of that year, to attend the Peace Jubilee, an attempt was made to commit General Grant to the policy of holding gold. I was present on the trip with the President. What happened on the boat may be best given in the language of Mr. Fisk and Mr. Gould. Mr. Fisk, in his testimony before the committee, said:
”On our pa.s.sage over to Boston with General Grant, we endeavored to ascertain what his position in regard to the finances was. We went down to supper about nine o'clock, intending while we were there to have this thing pretty thoroughly talked up, and, if possible, to relieve him from any idea of putting the price of gold down.”
Mr. Gould's account before the committee was as follows:
”At this supper the question came up about the state of the country, the crops, prospects ahead, etc. The President was a listener; the other gentlemen were discussing. Some were in favor of Boutwell's selling gold, and some were opposed to it. After they had all interchanged their views, some one asked the President what his view was. He remarked that he thought there was a certain amount of fict.i.tiousness about the prosperity of the country, and that the bubble might as well be tapped in one way as another. . . . We supposed from that conversation that the President was a contractionist. His remark struck across us like a wet blanket.”
The error of Fisk and Gould and their a.s.sociates, from the beginning to the end of the contest, was in the supposition that the President was taking any part in the operations of the Treasury concerning the price of gold. If he expressed any opinions outside in conversation, there were no acts on his part in harmony with or in antagonism to the views he entertained. As a matter of fact, with the exception of the letter from the city of New York, he had no conference or correspondence with me up to the 22d day of September, when I called upon him, and gave him a statement of the price of gold in the city of New York, and of the nature and character of the combination that existed there, as far as it was understood by me. Their policy was directed to two points: first, to influence the President, if possible, to interfere in a way to advance the price of gold; and, second, to satisfy their adherents and opponents that the President either had so interfered or would so interfere.
Even Fisk and Gould may at a period of time have rested in the belief that the President either had interfered or that he would interfere.
Their confidence was in Mr. A. R. Corbin, a brother-in-law of the President, who, under the influence of various considerations, which appear to have been personal and pecuniary to a very large extent, lent himself to the task of influencing the President. As a matter of fact, his attempts were very feeble and misdirected and of no consequence whatever. Indeed, such is my opinion of the President, and such my belief as to his opinion concerning Mr. Corbin, that nothing which Mr.
Corbin did say, or could have said, did have or could have had the least influence upon the President's opinion or conduct. It is, however, also true that Fisk and Gould employed Corbin and gave him consideration in their undertakings out of which he realized some money. I received information, also, which may not have been true, that they suggested to him that he might become president of the Tenth National Bank, which had a very conspicuous part in the events which culminated in Black Friday.
An attempt to strengthen the impression that it was the purpose of the President to prevent the sale of gold was made through an article prepared by Mr. Corbin, probably under the direction of Mr. Gould and others, which appeared finally, with some alterations and omissions, in the New York _Times_ of the 25th of August. It appears to have been the purpose of the parties interested to mislead the _Times_ as to the authors.h.i.+p of the article, and they secured the agency of Mr. James McHenry, a prominent English capitalist, who called at the _Times_ office, and presented the article to Mr. Bigelow, the editor, as the opinion of a person in the intimate confidence of the President. The article was put in type and double leaded. When so prepared, suspicions were aroused, and the financial editor, Mr. Norvell, made very important corrections, taking care to omit sentences and paragraphs that contained explicit statements as to the purposes of the President. Some of the phrases omitted were in these words: ”It may be that further purchases of bonds will be made directly with gold.”
”As gold acc.u.mulates, the less would be the premium upon it. High prices for gold before the sale of our products would cause lower prices of gold after the sale of products.”
Among the statements made which were preserved in the article as printed finally were these: ”The President evidently intends to pay off the 5-20s as rapidly as he may in gold”; ”So far as current movements of the Treasury are concerned, until crops are moved it is not likely Treasury gold will be sold for currency to be locked up.”
Following the appearance of this article, I received a letter from Mr.
Gould, dated the 30th of August, in which this sentence appears: ”If the New York _Times_ correctly reflects your financial policy during the next three or four months; namely, to unloose the currency balance at the Treasury or keep it at the lowest possible figure, and also to refrain during the same period from selling or putting gold on the market, thus preventing a depression of the premium at a season of the year when the bulk of our agricultural products have to be marketed, then I think the country peculiarly fortunate in having a financial head who can take a broad view of the situation, and who realizes the importance of settling the large balance of debt against us by the export of our agricultural and mining products instead of bonds and gold.”
Of my reply to that letter, the committee say: ”The brief and formal reply of the Secretary gave Gould no clew to the purpose of the Government.”
Under date of September 20, I received a letter from Gould to which I made no reply. Aside from the topics to which he directed my attention in the letter, it is the unavoidable inference from the context as a whole that Gould had then no faith in the statements given to the public that the President was in any manner pledged to interfere and prevent the sale of gold. The following extracts from the letter of September 20 are a full exposition of his policy and of the means on which he relied to advance the price of gold during the month of September:
”On the subject of the price of gold and its effect upon the producing interests of the West, permit me to say that during the months of September of the past two years the price has averaged about forty- five. Gold must range this year at about that premium to enable the export of the surplus crops of wheat and corn. We have to compete with the grain-producing countries bordering on the Black and Mediterranean seas, and it requires a premium of over forty per cent on gold to equalize our high-priced labor and long rail transportation to the seaboard.
”My theory is to let gold go to a price that we can export our surplus products to pay our foreign debts, and the moment we turn the balance of trade in our favor gold will decline from natural causes. In my judgment, the Government cannot afford to sell gold during the next three months while the crops are being marketed, and if such a policy were announced, it would immediately cause a high export of bread- stuffs and an active fall trade.