History of Buchanan County, Iowa, with illustrations and biographical sketches, Part 126

Author: Williams bros., Cleveland, pub. [from old catalog]; Riddle, A. G. (Albert Gallatin), 1816-1902
Publication date: 1881
Publisher: Cleveland, Williams brothers
Number of Pages: 574

USA > Iowa > Buchanan County > History of Buchanan County, Iowa, with illustrations and biographical sketches > Part 126

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So much of this as my limits permit is here found. It thus discloses the purpose and means employed, and reveals conspiracy against the business of the country, seemingto involve the highest officers of the Nation in it.

On the first of September, 1868, the price of gold was one hundred and forty-five. During the autumn and winter it continued to decline, interrupted only by occasional fluctuations, till in March, 1869, it touched one hundred and thirty and one-fourth (its lowest point for three years). and continued near that rate until the middle of April, the earliest period to which the evidence taken by the committee refers. At that time, Mr. Jay Gould, president of the Erie railroad company, bought seven millions of gold, and put up the price from one hundred and thirty-two to one hundred and forty. Other brokers followed his example, and by the twentieth of May had put up the price to one hundred and forty- four and seven-eighths, from which point, in spite of speculation, it

continued to decline, and on the last day of July stood at one hundred and thirty-six.

The first indication of a concerted movement on the part of those who were prominent in the panic of September was an effort to secure the appointment of some person who should be subservient to their schemes, as assistant treasurer at New York, in place of Mr. II. H. Van Dyck, who resigned in the month of June. In this effort Mr. Gould and Mr. A. R. Corbin appear to have been closely and intimately connected If the testimony of the witnesses is to be believed, Mr. Corbin suggested the name of his step-son-in-law, Robert B. Cather- wood, and Mr. Gould joined in the suggestion. This led to an inter- view with Catherwood, the object of which is disclosed in his own testi- mony, as follows:

"I went next day to have a conversation with Mr. Gould and Mr. Corbin, and I found that the remark was simply this: That the parties could operate in a legitimate way and make a great deal of money, and that all could be benefitted by it in a legitimate manner. 1 satisfied my- self that I could not fill the bill."

And again, (page 441):

"Mr. Gould, Mr. Corbin, myself, and some other associates, had an understanding that we would go into some operations, such as the pur- chase of gold, stocks, &c., and that we would share and share alike."

And, (page 441): "I declined to go into this sub-treasury business." On what grounds Mr. Catherwood declined to be a candidate does not appear.

The parties next turned their attention to General Butterfield, and, both before and after his appointment, claimed to be his supporters. Gould and Catherwood testify that Corbin claimed to have secured the appointment, though Corbin swears that he made no recommendation in the case. General Butterfield was appointed assistant treasurer, and entered upon the duties of that office on the first of July.

It is, however, proper to state that the committee have no evidence that Catherwood's name was ever proposed to the President or secre- tary as a candidate for the position, nor that General Butterfield was in any way cognizant of the corrupt schemes which led the conspirators to desire his appointment, nor that their recommendations had any weight in securing it. In addition to these efforts, the conspirators re- solved to discover, if possible, the purposes of the President and the secretary of the treasury in regard to sales of gold. The first attempt in this direction, as exhibited in the evidence, was made on the 15th of June, when the President was on board one of Messrs. Fisk and Gould's Fall River steamers, on his way to Boston. At nine o'clock in the evening, supper was served on board, and the presence at the table of such men as Cyrus W. Field, with several leading citizens of New York and Boston, was sufficient to prevent any suspicion that this occasion was to be used for the benefit of private speculation; but the testimony of Fisk and Gould indicates clearly the purpose they had in view. Mr. Fisk says (page 171):

"On our passage over to Boston with General Grant, we endeavored to ascertain what his position in regard to 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 is as follows (page 171):

"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, au = opposed to it. After they had all interchanged views, some one asked the President what his view was. He remarked that he thought there was a certain amount of fictitiousness about the prosperity of the country, and that the bubble might as well be tapped

* When asked what became of the twenty-five thousand dollars paid by Gould to Corbin, with a pathetie wave of hands expressive of utter loss, lie replied, "Gone where the woodbine twineth."

LIFE OF JAMES A. GARFIELD.

in one way as another. We supposed, from that conversation, that the President was a contractionist. * *

His remark struck aeross us like a wet blanket.

It appears that these skilfully-contrived efforts elicited from the President but one remark, and this opened a gloomy prospect for the speculators; for Mr. Gould testifies that early next morning he was at the telegraph office, and found there one of his associates telegraphing to New York to sell out his stocks.

Upon their return to New York, Fisk and Gould determined to bring a great pressure upon the administration, to prevent, if possible, a further decline in gold, which would certainly interfere with their pur- poses of speculation.

This was to be effeeted by facts and arguments presented in the name of the country and its business interests; and a financial theory was agreed upon, which, on its face, would appeal to the business in- terests of the country, and enlist in its support many patriotic citizens, but would, if adopted, incidentally enable the conspirators to make their speculations eminently successful. That theory was, that the business interests of the country required an advance in the price of gold; that, in order to move the fall crops and secure the foreign mar- ket for our grain, it was necessary that gold should be put up to 145. According to Mr. Gould, this theory, for the benefit of American trade and commerce, was suggested by Mr. James McHenry, a prominent English financier, who furnished Mr. Gould the data with which to ad- vocate it. This theory is exhibited very fully in the testimony of Mr. Gould (pp. 4 and 5), and of Mr. Fisk (pp. 171 and 172).

. Grant was followed to Newport in vain-something else must be done.

If the impression could be produced that the secretary of the treasury would withhold gold for a month that would do.

On the nineteenth of August the President passed through New York. The Times was to be used, and a seeming semi-official article was written, headed "Grant's Financial Policy," to be used as a leading editorial, its publication to be secured by indirect means. The Times was reached, and the article put in double-leaded lines, ready. The editor became suspicious. It was published in an amended form, with the original in a parallel col- umn, and failed. An effort on Secretary Boutwell was ineffective also. It so happened that he did decide to sell gold sparingly during September. Perhaps this de- sign was penetrated, and gold touched near 138, on the sixth. Gould purchased. His associates became alarm- ed, but he persisted. His means to force it up were various and curious. A pretense 'that the President had ordered the non-sale of gold in September was one means. That the advance of gold was the depression of the currency, should be kept in mind. At the middle of September Gould had gold at 135 and 136, and Gould was alone. He courted Fisk, who was coy, but became frisky.

Fisk was told that Corbin had enlisted the interests of persons high in authority, that the President, Mrs. Grant, General Porter, and Gen- eral Butterfield were corruptly interested in the movement, and that the secretary of the treasury had been forbidden to sell gold. Though these declarations were wickedly false, as the evidence abundantly

shows, yet the compounded villainy presented by Gould and Corbin was too tempting a bait for Fisk to resist. He joined the movement at onee, and brought to its aid all the force of his magnetic and infeetu- ous enthusiasm. The malign influence which Cataline wielded over the reekless and abandoned youth of Rome, finds a fitting parallel in the power which Fisk carried into Wall street, when, followed by the thugs of Erie and the debauchees of the Opera House, he swept into the gold-room and defied Loth the street and the treasury. Indeed, the whole gold movement is not an unworthy copy of that great conspiracy to lay Rome in ashes and deluge its streets in blood, for the purpose of enriehing those who were to apply the torch and wield the dagger.

With the great revenue of the Erie railway company at their com- mand, and having converted the Tenth National bank into a manufac- tory of certified checks to be used as cash at their pleasure, they terri- fied all opponents by the gigantic power of their combination, and amazed and dazzled the dissolute gamblers of Wall street by declaring that they had in league with them the chief officers of the national government.

Possessed of these real and pretended powers, the conspirators soon had at their command an army of brokers, as corrupt as themselves, though less powerful and daring. They opened an account for the "pool," which they styled the national gold account, hoping thus to strengthen the pretense that officers of the national government were interested with them.

They gradually pushed the price of gold from one hundred and thirty- five and one-half, where it stood on the morning of the thirteenth of September, until on the evening of Wednesday, the twenty-second, they held it firm at one hundred and forty and one-half. Russell A. Hills, clerk for William Heath & Company, had bough seven millions for the clique. James Ellis, partner of the same firm, had bought for them six millions, eight hundred and ninety-five thousand dollars more, under orders to put up the price and hold it there.

Woodward testifies that he bought eighteen millions, of which ten millions were taken by Gould. H. K. Enos testifies that he bought ten millions. E. K. Willard testifies that he bought ten millions. Charles E. Quincy, of Heath & Company testifies that he hield over fourteen millions.

On the evening of Wednesday, the twenty-second, gold stood at one hundred and forty and one-half, and according to Fisk's testimony the conspirators hield calls from fifty to sixty millions. Mr. Gould thinks it was not more than twenty-five millions, but his partner (Smith) testifies that they held from forty to fifty or fifty-five millions, in the purchase of which they had employed from fifty to sixty brokers. No better proof was needed that the natural tendency of gold was downward than the fact that it required these enormous purchases, with all the acompani- ments of fraud, to hold it three cents higher than it had stood sixteen days before.

During the ten days in which these purchases were made, the con- spirators were disturbed by the movements of the secretary of the treasury.

About the fourteenth of September it became known in New York that within a few days Secretary Boutwell would pass through the city, and that he had accepted an invitation to dine at the Union League club. It was noised about that the dinner was gotten up by parties short of gold, who expected to use the occasion to influence the secretary in favor of inereasing his sales of gold, and breaking up the supposed clique. Mr. Gould became alarmed at the confident manner in which the secretary's intentions were spoken of, and solieitous as to what effect the bears and business men might have on the secretary's policy.

He called on Corbin, and communicated his fears. The testimony shows that he distrusted CorLin's pretended influence. For nearly a fortnight he had ealled twice a day, and while studying the situation was narrowly watching Corbin's behavior. He knew that every cent of

BANKING AND CURRENCY.

advance in the price of gold added fifteen thousand dollars to Corbin's profit from the gold movement, and that this fact might explain Cor- bin's pretense of knowing the President's purposes, and of being able to influence them.

Corbin continued to assure Gould that there was no danger, and on the evening of the seventeenth of September it was agreed that the former should address a letter to the President, urging him not to in- terfere in the gold market by ordering or permitting sales from the treasury. During that night Corbin wrote a long letter on the subject, which was not considered worth preserving, but was destroyed soon after it was received by the President. The testimony shows that the letter contained no reference to the private speculations of Corbin, but urged the President not to interfere in the fight then going on between the bulls and bears, nor to allow the secretary of the treasury to do so by any sales of gold. The letter also repeated the old arguments in regard to transportation of the crops. Its contents are exhibited in the testimony of both Corbin (page 249) and Gould (page 155).

While Corbin was writing it, Gould called upon Fisk to furnish his most faithful servant to carry the letter. W. O. Chapin was designated as the messenger, and early on the following morning went to Mr. Cor- bin's house and received it, together with a note to General Porter. He was instructed to proceed with all possible haste, and telegraph Fisk as soon as the letter was delivered. He reached Pittsburgh a little after midnight, and, proceeding at once by carriage to Washington Pennsylvania, thirty miles distant, delivered the letter to the President, and, after waiting some time, asked if there was any answer. The President told him there was no answer, and he hurried away to the nearest telegraph office and sent to Mr. Fisk this dispatch: "Letters delivered all right," and then returned to New York.

Mr. Fisk appears to have interpreted the "all right" of the dispatch as an answer to the doctrine of the Corbin letter, and says he pro- ceeded in his enormous purchases upon that supposition.

This letter, which Corbin had led bis co-conspirators to trust as their safeguard against interference from Mr. Boutwell, finally proved their ruin. Its effect was the very reverse of what they anticipated.

General Porter testifies, (page 448): The letter would have been like hundreds of other letters received by the President, if it had not been for the fact that it was sent by a special messenger from New York to Washington, Pennsylvania, the messenger having to take a carriage and ride some twenty-eight miles from Pittsburgh. This letter, sent in that way, urging a certain policy on the administration, taken in con- nection with some rumors that had got into the newspapers at that time as to Mr. Corbin's having become a great bull in gold, excited the President's suspicions, and he believed that Mr. Corbin must have a pecuniary interest in those speculations; that he was not actuated simply by a desire to see a certain policy carried out for the benefit of the administration. Feeling in that way, he suggested to Mrs. Grant to say, in a letter she was writing to Mrs. Corbin, that rumors had reached her that Mr. Corbin was connected with speculators in New York, and that she hoped that if this was so he would disengage him- self from them at once; that he (the President) was very much dis- tressed at such rumors. She wrote a letter that evening, which I did not see. That, I think, was the night after the messenger arrived, and while we were still at Washington, Pennsylvania.

Both Mr. Gould and Mr. Corbin have testified in regard to this letter, and they state its contents substantially as given by General Porter.

It was received in New York on the evening of Wednesday, the twenty-second. Late that night Mr. Gould called at Corbin's house. C'orbin disclosed the contents of the letter, and they sat down to con- sider its significance. Both have detailed at length in their evidence what transpired between them that night and the following morning. (See Gould's evidence, pp, 156 and 157, and Corbin's evidence, pp. 251 to 253.)

This letter created the utmost alarm in the minds of both these con- spirators. It showed Corbin that his duplicity was now strongly sus- pected, if not actually discovered. It showed Goukl that he had been deceived by Corbin's representations, and that a blow from the treasury might fall upon him at any hour.

The picture of these two men that night, as presented in the evi- dence, is a remarkable one. Shut up in the library, near midnight, Corbin was bending over the table and straining with dim eyes to de- cipher and read the contents of a letter, written in pencil, to his wife, while the great gold gambler, looking over his shoulder, caught with his sharper vision every word.

The envelope was examined, with its post-mark and date, and all the circumstances which lent significance to the document. In that inter- view Corbin had the advantage, for he had had time to mature a plan. He seems to have determined, by a new deception, to save his credit with the President, and at the same time reap the profit from his specu- lation with Mr. Gould. He represented to Gould the danger of allow- ing the President any reason to believe that he, Corbin, was engaged in speculation, and said he had prepared a letter to the President deny- ing that he had any interest in the movement, direct or indirect, and said he must send the letter by the first mail, but that in order to send it, it must be true. He proposed, therefore, to Gould that they should settle the purchase of a million and a half by Gould, paying to him the accrued profits, which, as gold stood that night, would amount to over one hundred thousand dollars in addition to the twenty-five thou- sand dollars he had already received.

Gould was unwilling either to refuse or accept the proposition. Fear- ful, on the one hand, of losing his money, and on the other of incur- ring Corbin's hostility, he asked a delay until morning, and in the mean- time enjoined and maintained secrecy in regard to the existence of the letter.

Gould went from Corbin's house to the office of the Erie railroad, still keeping Mrs. Grant's letter a secret from Fisk. Later in the day he disclosed only enough of the truth to make Fisk jointly responsible for whatever amount of money he should pay to Corbin.

Mr. Gould testifies that the check was drawn, but never paid to Corbin.

JIr. Fisk knew only of Corbin's nervousness, but Gould knew far more. He says that Corbin had deceived him in pretending to possess knowledge of the President's purposes, and of being in any way able to influence them. He saw the whole extent of the danger and the ruin which a treasury sale would bring upon him. New victims were prepared, and a new scheme devised to save himself.

Gould's old partner, Belden, rushed upon the street and made immense purchases. He managed to induce Speyer to believe he was himself the broker for Fisk, Gould and others, with orders to buy. Others purchased.

Gould says "I was a seller of gold that day. I pur- chased merely enough to make believe that I was a bull, and Fisk was in the gold room offering bets that gold would touch two hundred. Gold that day closed at one hundred and forty-four. The conspirators held a meet- ing, had lists of all the dealers. They had calls for more than one hundred millions. There were not fifteen millions real gold in New York, outside the treasury. Every man who had bought or loaned owed them, and must buy it of them to pay with, and at their prices. More than two hundred and fifty prominent men and firms were short. They resolved to publish the list, demand one

LIFE OF JAMES A. GARFIELD.

hundred and sixty for gold, and if settlements were de- layed later than three p. M. more would be required, but were advised that there was peril in that. It was then determined to push gold up still further the next day, Friday-day of doom. The name of Belden should cover the purchases. Heath's office was the head- quarters.

Smith, Osborne, Dater, and Timpson, and other leading brokers of this clique, were to frighten the borrowers of gold into private settle- ments in their office, and Jay Gould, the guilty plotter of all these criminal proceedings, determined to betray his own associates, silent and imperturbable, by nods and whi pers, directed all. He knew that day better than ever the value of silence, and as he testified to the com- mittee, (page 143) :

"I had my own plans, and did not mean that anybody should say that I had opened my mouth that day, and I did not."

Speyer was sent to the gold room and run gold up to one hundred and sixty, taking sixty million dollars.

The clique needed vast sums of money so as to be able to pay for the gold that parties who declined to place margins in their hands might return to them. For this Gould had made, as he thought, ample pro- vision. He had some time before purchased a controlling interest in the Tenth National bank, and used that institution as a convenience to certify the checks of his firm. To this bank he wrote a letter the day before the panic, guaranteeing them from loss through certifying the checks of William Heath & Co.

Russell A. Hills, clerk of Heath & Co. says, (p. 398):

"He told me that the Tenth National bank had agreed to certity to an unlimited extent, day by day. A short time afterwards one of the officers of the bank came into the office of William Heath & Co., and said that it was impossible for the bank to certify, as there were three bank examiners in there to prevent it."

It is in evidence that on Thursday the bank certified checks to the amount of twenty-five millions, and on Friday, notwithstanding the presence of the examiners, certified fourteen millions more.

While this desperate work was going on in New York, its alarming and ruinous effects were reaching and paralyzing the business of the whole country and carrying terror and ruin to thousands. Business men everywhere, from Boston to San Francisco, read disaster in every new bulletin. The price of gold fluctuated so rapidly that the tele- graphic indicators could not keep pace with its movement. The com- plicated mechanism of these indicators is moved by the electric current carried over telegraphic wires directly from the gold-room, and it is in evidence that in many instances these wires were melted or burned off in the efforts of the operators to keep up with the news.

In the meantime two forces were preparing to strike the conspirators a blow. One was a movement led by James Brown, a Scotch banker of New York, and supported by many leading bankers and merchants. The situation of all those whose legitimate business required the pur- chase of gold was exceedingly critical, and the boldest of them, under the lead of Brown, joined the great crowd of speculative bears in des- perate efforts to break down the conspiracy and put down the price of gold by heavy sales. The other was a movement at the national capital.

The President returned from Pennsylvania to Washington on Thurs- day, the twenty-third, and that evening had a consultation with the sec- retary of the treasury concerning the condition of the gold market. The testimony of Mr. Boutwell shows that both the President and himself concurred in the opinion that they should, if possible, avoid any interference on the part of the government in a contest where both

parties were struggling for private gain; but both agreed that if the price of gold should be forced still higher, so as to threaten a general financial panic, it would be their duty to interfere and protect the busi- ness interests of the country. The next morning the price advanced rapidly, and telegrams poured into Washington from all parts of the country, exhibiting the general alarm, and urging the government to interfere, and, if possible, prevent a financial crash. This was issued:

"TREASURY DEPARTMENT, September 24, 1869.

"DANIEL BUTTERWORTH, Assistant Treasurer United States, New York:

"Sell four millions ($4,000,000) gold to-morrow, and buy four mill- ions (4,000,000) bonds.

"GEORGE S. BOUTWELL, "Secretary 'Treasury.

"Charge to department.

"Sent 11:42 A. M."

The message was not in cipher, and there was no attempt to keep it secret. It was duplicated, and a copy sent over each of the rival lines. The one sent by the Western Union line was dated at the treas- ury 11:42, Washington time, and reached General Butterfield 12:10, New York time. That sent over the Franklin line was dated at the treasury 11:45, and was delivered to General Butterfield at 12:05, New York time. The actual time occupied in transmitting the dispatch from the secretary to General Butterfield, including messenger travel at both ends of the line, was eight minutes, the same over each line; but in the branch office of the Western Union company, at Washing- ton, there was a delay of eight minutes before the operator could get control of the wire. Its contents may have been heard in some of the telegraph offices in New York, by outside experts standing near the instruments, and thus the news may have been known in the gold-room in advance of its publication; but the evidence on that point is not conclusive. A few minutes before noon, when the excitement in the gold-room had risen to a tempest, James Brown offered to sell one million at one hundred and sixty-two; then another million at one hun- dred and sixty-one; and then five millions more at one hundred and sixty; and the market broke. About ten minutes afterwards the news came that the treasury would sell, and the break was complete. Within the space of fifteen minutes the price fell from one hundred and sixty to one hundred and thirty-three, and, in the language of one of the witnesses, half of Wall street was involved in ruin.

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History of Buchanan County, Iowa, with illustrations and biographical sketches, Part 126

Author: Williams bros., Cleveland, pub. [from old catalog]; Riddle, A. G. (Albert Gallatin), 1816-1902 Publication date: 1881 Publisher: Cleveland, Williams brothers Number of Pages: 574

Author: Williams bros., Cleveland, pub. [from old catalog]; Riddle, A. G. (Albert Gallatin), 1816-1902
Publication date: 1881
Publisher: Cleveland, Williams brothers
Number of Pages: 574