Part 761

"During the war gold had swollen in value to 285, when the promise of the nation to pay a dollar on demand was only worth thirty-five cents. Thence it had gradually sunk. … All our purchases from foreign nations, all duties on those purchases, and all sales of domestic produce to other nations are payable in gold. There is therefore a large and legitimate business in the purchase and sale of gold, especially in New York, the financial centre of the nation. But a much larger business of a gambling nature had gradually grown up around that which was legitimate. … These gambling operations were based on the rise and fall of gold, and these in turn depended on successful or unsuccessful battles, or on events in foreign nations that could be neither foreseen nor guarded against. The transactions were therefore essentially gambling. … So large was the amount of this speculative business, gathering up all the gold-betting of the nation in a single room, that it more than equalled the legitimate purchase and sale of gold. There were large and wealthy firms who made this their chief business; and prominent among them was the firm of Smith, Gould, Martin & Co., four gentlemen under one partnership name, all wealthy and all accustomed to this business for years. Their joint wealth and business skill made them a power in Wall street. The leading mind of the firm, though not the first named, was Mr. Jay Gould, President of the Erie Railway, joint owner with Colonel James Fisk Jr., of two lines of steamboats, and largely interested in a number of railroads and other valuable properties. Mr. Gould looked upon gold, railroads, and steamboats as the gilded dice wherewith to gamble. … During the spring of 1869 he was a buyer of gold. There was perhaps fifteen millions of that rare currency in New York outside the Sub-Treasury; and he had bought half that amount, paying therefor a bonus of a little more than two millions of dollars. As fast as he had purchased the precious metal he had loaned it out to those who needed it for the payment of duties, and who hoped to repurchase it at a lower rate. And so, though the owner of seven millions, he had none of it in hand; he merely possessed the written acknowledgment of certain leading merchants and brokers that they owed him that amount of specie, which they would repay with interest on demand. Having this amount obtainable at any moment, Mr. Gould had the mercantile community at his mercy. But there was some hundred millions of gold in the Treasury, more or less, and the President of the United States or the Secretary of the Treasury might at any time throw it on the market. On this point it was very desirable to ascertain the opinion of President Grant; more desirable to have constant access to his private ear." In various ways, argumentative influences were brought to bear on President Grant and the Secretary of the Treasury, Mr. Boutwell, to persuade them that it was desirable for the country, while the crops were being moved, to hold up the price of gold. One important channel for such influences was supplied by the President's brother-in-law, a retired New York merchant, named Corbin, who was drawn into the speculation and given a share in Gould's gold purchases. {2348} By strenuous exertions, Gould and his associates pushed up the price till "in May it stood at 144 7/8; but as soon as they ceased to buy, the price began to recede until in the latter part of June it again stood at 136. The others were then frightened and sold out. 'All these other fellows deserted me like rats from a ship,' said Gould. But for him to sell out then would involve a heavy loss, and he preferred a gain. He therefore called upon his friend and partner Fisk to enter the financial arena. It is but justice to Mr. Fisk to say that for some time he declined; he clearly saw that the whole tendency of gold was downward. But when Gould made the proposition more palatable by suggesting corruption, Fisk immediately swallowed the bait. … He … entered the market and purchased twelve millions. There is an old adage that there is honor among thieves. This appears not to be true on the Gold Exchange. All Mr. Gould's statements to his own partner were false, except those relating to Corbin and Butterfield. And Mr. Corbin did his best. He not only talked and wrote to the President himself; not only wrote for the New York 'Times,' but when General Grant visited him in New York, he sent Gould to see him so often that the President, unaware of the financial trap set for him, rebuked the door servant for giving Mr. Gould such ready access. But it is worthy of note that neither Corbin, Gould, nor Fisk ever spoke to the President of their personal interest in the matter. They were only patriots urging a certain course of conduct for the good of the country. These speculations as to the advantage to the country of a higher price of gold seem to have had some effect on the Presidential mind; for early in September he wrote to Mr. Boutwell, then at his Massachusetts home, giving his opinion of the financial condition of the country, and suggesting that it would not be wise to lower the price of gold by sales from the Treasury while the crops were moving to the seaboard. Mr. Boutwell therefore telegraphed to the Assistant Secretary at Washington only to sell gold sufficient to buy bonds for the sinking fund. Through Mr. Corbin or in some other way this letter came to the knowledge of the conspirators; for they at once began to purchase and the price began to rise. … On the 13th of September, gold, swelling and falling like the tide, stood at 135½. The clique then commenced their largest purchases, and within nine days had bought enough to hold sixty-six millions—nearly every cent of it fictitious, and only included in promises to pay. On the evening of Wednesday, September 22, the price was 140½; but it had taken the purchase of thirty or forty millions to put it up that five cents. Could it be forced five cents higher, and all sold, the profits would be over ten millions of dollars! It was a stake worth playing for. But the whole mercantile community was opposed to them; bountiful harvests were strong arguments against them; and more than all else, there stood the Sub-Treasury of the United States, with its hundred millions of dollars in its vaults, ready at any time to cast its plethora of wealth on their unfortunate heads. … Corbin, while assuring Gould that there was no danger of any Government sale, and yet himself greatly in trepidation, addressed a letter to General Grant urging him not to interfere with the warfare then raging between the bulls and the bears, nor to allow the Secretary of the Treasury to do so. … The letter would probably have had some effect, but unfortunately the ring overdid their business in the way in which they sent it." The letter was conveyed by a private messenger. The messenger, "Mr. Chapin, delivered his letter, asked General Grant if there was any reply, and being told there was none, started for his home, first telegraphing to his employer, 'Letter delivered all right.' It was a most unfortunate telegraphic message he sent back. He swears that his meaning was that the letter was delivered all right; and so the despatch reads. But the gold gamblers, blinded by the greatness of the stake at risk, interpreted the 'all right' of the message as an answer to the contents of Mr. Corbin's letter—that the President thought the letter all right; and on the strength of that reading Fisk rushed into the market and made numerous purchases of gold. But that very letter, which was intended to be their governmental safeguard, led to their ruin. Carried by special messenger for a day and a half, its urgency that the Administration should sell no gold, coupled with frequent assertions in the newspapers that Mr. Corbin was a great bull in gold, excited General Grant's suspicions. He feared that Corbin was not actuated by patriotic motives alone in this secret correspondence. At the President's suggestion, therefore, Mrs. Grant wrote to her sister, Mrs. Corbin, telling her that rumors had reached them that Mr. Corbin was connected with speculators in New York, and that she hoped if this was so he would at once disengage himself from them; that the President was much distressed at such rumors. On the receipt of this letter, Mr. Corbin was greatly excited." Corbin showed the letter to Gould, and got himself let out of the game, so that he might be able to say to President Grant that he had no interest in gold; but Fisk was not told of the President's suspicions. "On the evening of Wednesday, September 21, it was determined to close the corner within two days." A desperate attack on the market began next morning. Gold opened that day at 39½; it closed at 44. The next day was "Friday, September 24, commonly called Black Friday, either from the black mark it caused on the characters of dealers in gold, or, as is more probable, from the ruin it brought to both sides. The Gold Room was crowded for two hours before the time of business. … Fisk was there, gloating over the prospect of great gains from others' ruin. His brokers were there, noisy and betting on the rapid rise of gold and the success of the corner. All alike were greatly excited, palpitating between hope and fear, and not knowing what an hour might bring forth. … Gold closed on Thursday at 144; Speyers [principal broker of the conspirators] commenced his work on Friday by offering 145, one per cent. higher than the last purchase. Receiving no response, he offered to buy at 146, 147, 148, and 149 respectively, but without takers. Then 150 was offered, and half a million was sold him by Mr. James Brown, who had quietly organized a band of prominent merchants who were determined to meet the gold gamblers on their own ground. … Amid the most tremendous confusion the voices of the excited brokers could be heard slowly bidding up the value of their artificial metal. {2349} Higher and higher rose the tide of speculation; from 156 to 159 there was no offer whatever; amid deep silence Speyers called out, 'Any part of five millions for 160.' 'One million taken at 160,' was the quiet response of James Brown. Further offers were made by the brokers of the clique all the way from 160 to 163½. But Mr. Brown preferred to grapple the enemy by the throat, and he sold Speyers five millions more, making seven millions of gold sold that hour for which Speyers agreed to pay eleven millions in currency. Such figures almost stagger one to read of them! But Speyers continued to buy till before noon he had purchased nearly sixty millions. … As the price rose cent by cent, men's hearts were moved within them as the trees are shaken by the swelling of the wind. But when the first million was taken at 160 a great load was removed, and when the second million was sold there was such a burst of gladness, such a roar of multitudinous voices as that room, tumultuous as it had always been, never heard before. Everybody instantly began to sell, desiring to get rid of all their gold before it had tumbled too deep. And just as the precious metal was beginning to flow over the precipice, the news was flashed into the room that Government had telegraphed to sell four millions. Instantly the end was reached; gold fell to 140, and then down, down, down, to 133. There were no purchasers at any price. … The gold ring had that day bought sixty millions of gold, paying or rather agreeing to pay therefor ninety-six millions of dollars in currency!" But Gould, Fisk & Co., who owned several venal New York judges, placed injunctions and other legal obstacles in the way of a settlement of claims against themselves. "Of course these judicious and judicial orders put an end to all business except that which was favorable to Fisk and Gould. They continued to settle with all parties who owed them money; they were judicially enjoined from settling with those to whom, if their own brokers may be believed, they were indebted, and they have not yet settled with them. … As the settlements between the brokers employed by the ring and their victims were all made in private, there is no means of knowing the total result. But it is the opinion of Mr. James B. Hodskin, Chairman of the Arbitration Committee of the Exchange, and therefore better acquainted with its business than anyone else, that the two days' profits of the clique from the operations they acknowledged and settled for were not less than twelve millions of dollars; and that the losses on those transactions which they refused to acknowledge were not less than twenty millions. The New York 'Tribune' a day or two afterward put the gains of the clique at eleven million dollars. Some months after 'Black Friday' had passed away, Congress ordered an investigation into its causes. … For two or three days the whole business of New York stood still awaiting the result of the corner. … In good-will with all the world, with grand harvests, with full markets on both sides the Atlantic, came a panic that affected all business. Foreign trade came to a stand-still. The East would not send to Europe: the West could not ship to New York. Young men saw millions of dollars made in a few days by dishonesty; they beheld larger profits result from fraud than from long lives of honesty. Old men saw their best-laid plans frustrated by the operations of gamblers. Our national credit was affected by it. Europe was told that our principal places of business were nests of gamblers, and that it was possible for a small clique, aided by our banking institutions, to get possession of all the gold there was in the land; and that when one firm had gone through business transactions to the amount of over one hundred millions of dollars, the courts of the United States would compel the completion of those bargains which resulted in a profit, while those that ended in a loss were forbidden. For two or three months the sale of bonds in Europe was affected by the transactions of that day; and not until the present generation of business men has passed away will the evil influence of Black Friday be entirely lost."

_W. R. Hooper, Black Friday (The Galaxy, December, 1871)._

NEW YORK: A. D. 1875-1881. Stalwarts and Half-breeds.

See STALWARTS.

NEW YORK: A. D. 1881. Adoption of the Code of Criminal Procedure.

See LAW, COMMON: A. D. 1848-1883.

NEW YORK: A. D. 1892. Restored Tammany government in the City.

The Tammany organization was greatly discredited and crippled for a time by the exposure and overthrow of Tweed and his "ring," in 1871; but after a few years, under the chieftainship of John Kelly and Richard Croker, successive "grand sachems," it recovered its control of the city government so completely that, in 1892, Dr. Albert Shaw was justified in describing the latter as follows: "There is in New York no official body that corresponds with the London Council. The New York Board of Aldermen, plus the Mayor, plus the Commissioners who are the appointive heads of a number of the working departments such as the Excise, Park, Health and Police departments, plus the District Attorney, the Sheriff, the Coroners, and other officials pertaining to the county of New York as distinct from the city of New York, plus a few of the head Tammany bosses and the local Tammany bosses of the twenty-four Assembly Districts—all these men and a few other officials and bosses, taken together, would make up a body of men of about the same numerical strength as the London Council; and these are the men who now dominate the official life of the great community of nearly eighteen hundred thousand souls. In London the 137 councillors fight out every municipal question in perfectly open session upon its actual merits before the eyes of all London, and of the whole British empire. In New York, the governing group discusses nothing openly. The Board of Aldermen is an obscure body of twenty-five members, with limited power except for mischief, its members being almost to a man high Tammany politicians who are either engaged directly in the liquor business or are in one way or another connected with that interest. So far as there is any meeting in which the rulers of New York discuss the public affairs of the community, such meetings are held in the Tammany wigwam in Fourteenth Street. But Tammany is not an organization which really concerns itself with any aspects of public questions, either local or general, excepting the 'spoils' aspect. It is organized upon what is a military rather than a political basis, and its machinery extends through all the assembly districts and voting precincts of New York, controlling enough votes to hold and wield the balance of power, and thus to keep Tammany in the possession of the offices. {2350} Its local hold is maintained by the dispensing of a vast amount of patronage. The laborers on public works, the members of the police force and the fire brigades, the employees of the Sanitary Department, of the Excise Department, of the Street Cleaning and Repair Department and of the Water and Dock and Park Departments, the teachers in the public schools and the nurses in the public hospitals, all are made to feel that their livelihood depends on the favor of the Tammany bosses; and they must not only be faithful to Tammany themselves, but all their friends and relatives to the remotest collateral degree must also be kept subservient to the Tammany domination. The following characterization of Tammany leadership and method is from the New York Evening Post. … 'None of the members occupy themselves with any legislation, except such as creates salaried offices and contracts in this city, to be got hold of either by capture at the polls or "deals" with the Republican politicians here or in Albany. When such legislation has been successful, the only thing in connection with it which Tammany leaders consider is how the salaries shall be divided and what "assessments" the places or contracts can stand. If any decent outsider could make his way into the inner conferences at which these questions are settled, he would hear not the grave discussion of the public interests, how to keep streets clean, or how to repave them, or how to light them or police them, or how to supply the city with water, but stories of drunken or amorous adventure, larded freely with curious and original oaths, ridicule of reformers and "silk-stockinged" people generally, abuse of "kickers," and examination of the claims of gamblers, liquor-dealers, and pugilists to more money out of the public treasury. In fact, as we have had of late frequent occasion to observe, the society is simply an organization of clever adventurers, most of them in some degree criminal, for the control of the ignorant and vicious vote of the city in an attack on the property of the tax-payers. There is not a particle of politics in the concern any more than in any combination of Western brigands to "hold up" a railroad train and get at the express packages. Its sole object is plunder in any form which will not attract the immediate notice of the police.'"

_A. Shaw, Municipal Problems of New York and London (Review of Reviews, April 1892)._

NEW YORK: A. D. 1894. Constitutional Convention.

A bill passed by the legislature of 1892, calling a convention to revise the constitution of the State, provided for the election of 128 delegates by Assembly districts, and 32 at large, but added 9 more whom the Governor should appoint, 3 to represent labor interests, 3 woman-suffrage claims, and 3 the advocates of prohibition. By the legislature of 1893 this act was set aside and a new enactment adopted, making the total number of delegates to the Constitutional Convention 165, all elective, and apportioning five to each senatorial district. The convention assembled at Albany, May 9, 1894. Its labors are unfinished at the time this volume goes to press. Questions of reform in municipal government have claimed the greatest attention.

NEW YORK: End----------

NEW YORK SOCIETY LIBRARY.

See LIBRARIES, MODERN: UNITED STATES OF AMERICA.

NEW ZEALAND: Start--------

NEW ZEALAND: The aborigines.

"The traditions of these people [the Maoris] lead to the conclusion that they first came to New Zealand about 600 years ago, from some of the islands between Samoa and Tahiti; but some ethnologists put the migration as far back as 3,000 years. Their language is a dialect of the Polynesian, most resembling that of Rarotonga, but their physical characters vary greatly. Some are fair, with straight hair, and with the best type of Polynesian features; others are dusky brown, with curly or almost frizzly hair, and with the' long and broad arched nose of the Papuan; while others have the coarse thick features of the lower Melanesian races. Now these variations of type cannot be explained unless we suppose the Maoris to have found in the islands an indigenous Melanesian people, of whom they exterminated the men, but took the better-looking of the women for wives; and as their traditions decidedly state that they did find such a race when they first arrived at New Zealand, there seems no reason whatever for rejecting these traditions, which accord with actual physical facts, just as the tradition of a migration from 'Hawaiki,' a Polynesian island, accords with linguistic facts."

_Hellwald-Wallace, Australasia (Stanford's Compendium, new issue, 1893), chapter 14, section 9 (volume 1)._

ALSO IN: _E. Shortland, Traditions and Superstitions of the New Zealanders._

_J. S. Polack, Manners and Customs of the New Zealanders._

_Lady Martin, Our Maoris._

_W. D. Hay, Brighter Britain, volume 2, chapters 3-5._

See, also, MALAYAN RACE.

NEW ZEALAND: A. D. 1642-1856. Discovery. Colonization. Early dealings with Natives. Constitutional organization.