Black Friday has become almost a national holiday. The day after Thanksgiving, shoppers arrive in masses, hoping to get the latest deals on heavily discounted merchandise. But Black Friday hasn’t always been just a retail holiday.
The term Black Friday was actually coined after a plot to dethrone the U.S. gold market came to light on a friday. On Friday September 24 1869 the U.S. gold market crashed.
In response to the large debt that resulted from the civil war and reconstruction, President Ulysses S. Grant signed the Public Credit act. The public credit act was the United States government selling treasury gold weekly to help buy back wartime bonds. The goal of this was to help boost the economy and stabilize the value of the U.S. dollar. However this act kept gold prices at a very low rate.
Two investors, Jay Gould and James Fisk, sometimes referred to as The Gold Ring, launched an operation to corner the gold market. This operation involved infiltrating the federal government and their sale of gold. It started out by heavily lobbying for the appointment of Daniel Butterfield to assistant treasurer. Once he was appointed, The Gold Ring bribed him to alert them when the federal government intended to sell gold.
The next step in their plan was to gain direct social contact with the president. They did this by bringing in Abel Corbin, Grant’s brother-in-law. Through him, they were able to develop a social relationship with the President and have direct access to him through Corbin. They constantly brought up the idea of halting the government’s sale of gold to the President, claiming that the drop in gold prices would hurt the farmers.
Treasurer George Boutwell was the leader behind the government’s sale of gold. His plan was initially very successful and drastically reduced the amount of debt. But Grant, having been heavily influenced by The Gold Ring, ordered Boutwell to stop the sale of gold. Boutwell begrudgingly agreed.
Once the government halted the sale of gold, The Gold Ring bought up as much of the gold market as the could accumulating a large fortune in the process. The price of gold continued to grow higher and higher as Gould and Fisk began to hold all the gold.
Eventually, Grant caught wind of their plan and took action. On September 24 he ordered the treasury to flood the gold market, resulting in a crash in the price of gold. And thus, the term Black Friday came into existence. This move resulted in complete chaos and economic turmoil. However, Grant was able to break The Gold Ring’s corner on the market. With the help of Grant’s administration the United States was able to avoid going into a national depression.
Gould and Fisk were able to avoid conviction by spending a ton of money on a legal team. Some people still believe that Grant himself had knowledge or helped in the illegal operations.
Another popular origin of the term Black Friday goes back to the times when retailers would use colors to describe how the store was doing. Stores would commonly be “ in the red” meaning that they were not making a profit. It was countered by the idea that stores would be “in the black” and net a large profit by selling discounted merchandise the day after Thanksgiving. This idea is supposedly where Black Friday gets the Black part of its name.
Black Friday has a rich history dating all the way back to the 19th century. So when you are fighting for deals next Friday, keep in mind the history that the term represents.