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How Did Jay Gould's Gold Market

584 Words3 Pages

Jay Gould and Jim Fisk attempted to corner the nation’s gold market on September 24th 1869. They were president and vice president of the Erie Railroad, and they earned the reputation as two of Wall Street’s most ruthless financial masterminds. Their rap sheets included everything from issuing fraudulent stock to bribing politicians and judges, and they had a lucrative partnership with Tammany Hall power player Willian “Boss” Tweed. Jay Gould was an expert at devising new ways to game the system and he was once named the “Mephitopheles of Wall Street” because of his ability to line his own pockets. In 1869 Gould “spun a web” that was aimed at conquering the gold market. Gold was still the official currency of international trade at the time, but …show more content…

There was only around $20 million in gold circulation so Gould thought that someone with deep enough pockets could buy up huge amounts of gold until they cornered the market and they could drive up the price and sell for crazy profits. Gould’s scheme faced one significant hurdle, President Ulysses S. Grant. The US Treasury had continued a policy of using its huge gold reserves to buy back greenbacks from the public since the beginning of Grant’s tenure as chief executive. The government set the value of gold. When it sold its supply, the price went down, and when it didn’t sell, the price went up. If someone like Gould tried to corner the market, Grant would order the treasury to sell off large amounts of gold so the price would drive through the floor. Gould found a solution to this problem and befriended Abel Corbin, the husband of Ulysses S Grant’s sister. He persuaded Corbin to help him with his plan to corner the gold market. Corbin used his political influence so Gould would have an ear on the government’s actions. Corbin got close with Grant and tried to tell him high gold prices would benefit US farmers who sold their harvest

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