by Ron Chernow
With his unrivaled candor, Rawlins had occupied a special niche in Grant’s life that nobody could re-create. Selflessly protective of Grant’s reputation, Rawlins would have warned the president against predatory, designing figures who encircled him in Washington. He would have detected wrongdoers and been a stalwart voice against corruption, elevating the ethical tone at the executive mansion. With Rawlins gone, Grant lacked that one trusted adviser upon whose judgment he could implicitly rely. Stung by criticism, Grant would retreat into silence and lick his wounds. Rawlins might have penetrated that reserve. Into the vacuum left by Rawlins moved crafty, cynical politicians for whom the credulous Grant was often no match.
In future years, Grant discharged many offices of friendship to his fallen comrade. He successfully prodded Congress to appropriate money for a bronze equestrian statue of Rawlins in the capital. He also served as guardian of the three young Rawlins children, contributed liberally to their support, paid for their boarding schools in Connecticut, and helped them obtain jobs.
John Rawlins inspired intense affection among friends, a feeling heightened by his premature death. A small cult sprang up dedicated to the proposition that Rawlins had been the unacknowledged genius of the Civil War—that it was Rawlins’s military insights that had been decisive and that Grant cheated Rawlins of his just deserts. The main acolytes for this view were James H. Wilson, the journalist Sylvanus Cadwallader, and General William S. Hillyer, who had served on Grant’s wartime staff.
Those who tended the sacred flame of Rawlins believed Grant came to resent his dependency on him, especially when people gave Rawlins credit for his own success. General John E. Smith contended that certain people “did succeed in alienating Grant from Rawlins. He, Rawlins, felt it keenly and often complained of it.”68 Wilson was “sure that Rawlins’s domination over Grant was so pronounced that when Rawlins died Grant felt relieved.”69 The Rawlins acolytes believed Grant had destroyed incriminating letters that might have cast Rawlins in a better, and Grant in a lesser, wartime light, although this allegation has never been proven.
This belief in Rawlins as the war’s neglected genius flamed into a full-blown crusade when Grant later published his Memoirs and only made brief, fleeting references to his dead comrade. Sherman thought the omission deliberate, but not for the reasons advanced by Rawlins’s admirers: “Some of Rawlins’ flatterers gave out the impression that he, Rawlins, had made Grant, and had written most of his orders and dispatches at Donelson, Shiloh and Vicksburg—Grant disliked to be patronized—and although he always was most grateful for all friendly service he hated to be considered an ‘accident.’”70
It does no disservice to the estimable John A. Rawlins to state that his importance lay in his auxiliary services to Grant. Through four years of fighting, Rawlins kept Grant’s drinking problem within manageable bounds. He was an inspired choice as chief of staff and extremely valuable as a vocal devil’s advocate, sometimes questioning Grant’s tactical moves where others feared to tread. He was also an indispensable intermediary to a man who could be taciturn and inhibited. Nevertheless, in the last analysis, Rawlins could never have substituted his judgment for Grant’s superior military acumen.
CHAPTER THIRTY-ONE
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Sin Against Humanity
ULYSSES S. GRANT, who had often shown signs of a speculative bent, could never quite resist the allure of buccaneering tycoons of the Gilded Age. This most trusting of men was perhaps destined to draw the wiles of two of Wall Street’s most conniving moguls, Jay Gould and James Fisk Jr. In spring 1869, Gould concocted a plan to corner the market in gold, driving up its price. As it duly rose, Secretary of the Treasury Boutwell spoiled the scheme by selling additional gold from government coffers. He had embarked on weekly gold sales in exchange for greenbacks, using the proceeds to shrink the large federal debt. This overhang of government gold always threatened to undo any advance in gold prices. Faced with this impediment, Gould and Fisk undertook a campaign of seduction aimed at persuading Grant to restrict gold sales by the Treasury Department.
Both directors of the Erie Railroad, Gould and Fisk, made up an unlikely duo. A short, neat man with a full beard and piercing eyes, Gould had grown up as a poor farmer’s son in upstate New York. As a young man, he had devised a better mousetrap, foreshadowing the damage he would later do to Wall Street rivals. Coldly exacting, shunning the limelight, he had amassed a colossal fortune through a railroad network spanning the nation and came to personify the predatory instincts of contemporary tycoons. “The people had desired money” before Gould, Mark Twain observed, “but he taught them to fall down and worship it.”1 Indeed, Gould’s audacious moves riveted and appalled the nation in equal measure.
With his handsome blond mustache, bloated frame, and diamond rings, the flashy Jim Fisk was the antithesis of the saturnine Gould. The son of a Vermont peddler, he collected prostitutes and chorus girls no less promiscuously than he bought railroads and steamships and exulted in the attention his flamboyance aroused. Such was his roguish charm that people were captivated even as they were horrified by his total lack of scruples. As George Templeton Strong sketched him: “Illiterate, vulgar, unprincipled, profligate, always making himself conspicuously ridiculous by some piece of flagrant ostentation, he was, nevertheless, freehanded with his stolen money, and possessed, moreover, a certain magnetism of geniality that attracted to him people who were not particular about the decency of their associates.”2
Every decent conspiracy demands a saintly cover story, and Gould had cleverly devised one that identified his personal avarice with the national interest. He argued that higher gold prices would produce a corresponding decline in the value of greenbacks and thus artificially cheapen exports, allowing American farmers to reap bountiful sales abroad. Inasmuch as Gould also functioned as a major proprietor of east-west railroads, he stood to make a double killing, profiting from levitating gold prices and rising freight loads to eastern ports.
To peddle this self-serving economic theory, Gould needed a conduit to Grant and found a willing one in Abel Rathbone Corbin, a slippery man who had dabbled in law, journalism, and politics, even investing money for Julia Grant in New York real estate. Gould saw him as “a very shrewd old gentleman,” while a less charitable journalist sneered at him as the “most consummate old hypocrite I ever saw.”3 Most important, he had recently married Grant’s sister Virginia, known as Jennie. In her late thirties, Jennie was suffering the fate of an old maid and living with her parents in Covington when the sixty-one-year-old Corbin wooed her. Grant, who was fond of his sister, had known Corbin since his St. Louis days in the 1850s and gave away the bride at the wedding. “You will be surprised when I tell you I have just finished a letter of congratulation to Miss Jennie Grant,” Julia informed a friend in late April. Thrilled by the match, she noted that Corbin was “an old friend of ours & we are all well pleased.”4 Julia would shortly have reason to eat these words.
Gould had indoctrinated Corbin with his pet theory about the benefits of higher gold prices and Corbin, acting his part to perfection, began to flog it to Grant. The cynical Fisk saw Corbin as the cat’s-paw of the whole conspiracy. “Why damn it! Old Corbin married into Grant’s family for the purpose of working the thing in that direction. That’s all he married for this last time.”5 Whatever the scheme’s genesis, Gould traded brazenly on his supposed intimacy with Corbin, who traded on his supposed intimacy with Grant, even as Grant seemed oblivious to the web of intrigue being sedulously spun around him. When the post of assistant treasurer in New York fell vacant, Corbin and Gould lobbied successfully for the appointment of Major General Daniel Butterfield, who lacked any background in finance. He had been chief of staff for Joseph Hooker during the war and was credited with creating the bugle call “Taps.” The assistant treasurer post was critical to the machinery of Gould’s plot because the all-important gold sales were conducted through his Wall Street office. When Butter
field started work on July 1, Gould offered him a $10,000 bribe, binding him to the conspiracy. Butterfield preferred to characterize the money as an unsecured real estate loan.
The plot tempo quickened in mid-June 1869 when Grant, after visiting Fred at West Point, stopped by the Corbins’ West Twenty-Seventh Street town house. While he was there, Jay Gould dropped by to say hello and extended an offer to the president to cruise to Massachusetts the following evening aboard Fisk’s steamboat Providence, an offer that Grant, headed for Boston, naively accepted. Grant could sound cynical about the self-made men of his time, saying they “worship money rather than country,” but he found it hard to fend off their unctuous overtures.6
Once afloat, Gould and Fisk sprang their trap on Grant, steering the conversation to crop exports and Boutwell’s weekly gold sales. They wanted to convince Grant that Boutwell should halt such sales and galvanize the economy. For a long time, Grant listened silently, then hazarded the opinion that the current prosperity had a fictitious air and the speculative bubble might as well be pricked one way or another. His attitude—that the economy was excessively inflated and needed no stimulus—stopped the conspirators dead in their tracks. “We supposed from that conversation that the President was a contractionist,” said Gould. “His remark struck across us like a wet blanket.”7 Disheartened, Gould let his gold purchases lapse for a while until a more auspicious opportunity arose.
Gould went on plying Grant with favors and Grant, heedless of appearances, accepted them. In mid-August, the Grants and the Corbins left New York aboard a private railroad car, furnished by the Erie Railroad, to travel to Kane, a scenic spot in western Pennsylvania, where the president went trout fishing. Gould and Fisk boarded the luxurious car to make sure the accommodations suited the president. In the town of Susquehanna, Gould and Fisk gave Grant a private tour of their locomotive works and repair shops. Around this time, the two speculators resumed their gold purchases. After touring Pennsylvania, Grant headed for Newport, Rhode Island, and was lobbied en route by Jim Fisk, who told him that unless the Treasury Department withheld gold, the Republican Party would be blamed for heavy losses sustained by farmers and railroad workers across America. Grant responded in an exemplary manner, saying it would not be fair to tell any private citizen what the Treasury Department planned to do.
In early September, Gould heated up the plot, purchasing $1.5 million in gold for the Corbins and a like sum for General Butterfield. When Gould again met him at the Corbin home, Grant said reports of an abundant harvest had persuaded him gold prices should be kept high to aid crop exports. Gould was delighted: Grant had finally jumped at the bait. Grant wrote to Boutwell and argued the need to keep gold high to accelerate crop sales abroad. With good reason, Gould imagined he had recruited Grant to his scheme. To mask his trading moves, he executed gold purchases through a byzantine network of brokers.
During the second week of September, Grant returned to the Corbins’ town house and Jay Gould called anew. Grant at last sensed something terribly amiss and told their servant never to admit Gould again. “Gould was always trying to get something” out of him, Grant complained.8 On September 12, he dashed off a letter to Boutwell about “the bulls and bears of Wall Street” that showed his awareness that people on both sides of the gold trade were trying to manipulate him. “The fact is, a desperate struggle is now taking place, and each party wants the government to help them out. I write this letter to advise you of what I think you may expect, to put you on your guard.”9 Whatever his earlier naïveté, Grant now grasped the designs upon him, and Boutwell adhered to his liberal policy of selling gold. Meanwhile rumors of financial skulduggery floated freely in New York, Horace Greeley warning that “certain financiers” were colluding to push gold up to “an exorbitant rate.”10
On September 13, the Grants left New York to spend several days in southwest Pennsylvania. Three days later, Gould made a bald-faced effort to bribe Horace Porter: “We have purchased half a million gold on your account.” Porter responded impeccably: “I have not authorized any purchase of gold, and request that none be made on my account.”11 On September 17, Abel Corbin wrote Grant a letter urging a curb on government gold sales, and warning of calamitous consequences without it. This letter was whisked off to the president by William Chapin, an Erie Railroad employee in the pay of Jim Fisk. That Grant had banned further visits from Gould should have alerted Corbin that the scales had belatedly fallen from his eyes and that such a letter would be seen as one entreaty too many.
When Chapin reached southwest Pennsylvania a day later, he spied Grant playing croquet on the lawn with Porter. He waited in the house, then hand-delivered the letter to Grant, who absorbed its contents silently before disappearing for a while. When he returned, Chapin asked for his response to the message. “Is it all right?” he asked. “All right,” Grant echoed, indicating he would have no response.12 It was a studiously neutral reply, but Chapin sent Fisk an ambiguously worded telegram that stated “Delivered. All Right,” which implied, to Gould’s cold raptor eyes, that Grant had heeded Corbin’s admonition to check gold sales, turning him into an unwitting accomplice of the conspiracy.13
The stratagem boomeranged on Gould and Corbin since Grant found it highly suspicious that they had dispatched a messenger to western Pennsylvania to deliver a simple letter. At once, Grant asked Julia to send a message to his sister Jennie, warning about the gold purchases. As Julia remembered its gist: “The General says, if you have any influence with your husband, tell him to have nothing whatever to do with [Gould]. If he does, he will be ruined, for come what may, he (your brother) will do his duty to the country.”14
Grant blamed himself for not having stopped Corbin sooner in his mad spree of unwanted advice about boosting gold and saving the country. “I always felt great respect for Corbin,” he told Julia, “and thought he took much pleasure in the supposition that he was rendering great assistance to the administration by his valuable advice. I blame myself now for not checking this (as I thought) innocent vanity. It is very sad. I fear he may be ruined—and my poor sister!”15 Grant never broke off relations with Corbin and would prove surprisingly forgiving toward him, exchanging pleasant letters with him before too long.
Julia’s letter had the intended impact on Jennie Corbin, who pleaded with her husband to desist from further gold speculations. When Gould visited the Corbin house, Corbin tried to unload his gold position. “Ulysses thinks it wrong,” he explained, “and that it ought to end.” Gould quickly fathomed the significance of Grant’s letter to the Corbins. “Mr. Corbin,” he announced, “I am undone if that letter gets out.”16 He decided to liquidate his position before Boutwell made his next gold sale, which would shatter the conspiracy. Gould still made small gold purchases, but only to gull traders as he dumped gold. Meanwhile, gold prices consistently rose, thanks to steady buying and voluble encouragement from Jim Fisk, who knew nothing of Gould’s planned sales. On September 22, Fisk appeared in the Gold Room—a specialized commodity market next to the stock exchange—and loudly brayed buy orders to rally gold bulls, claiming Grant was solidly on their side. Large throngs milled outside, eager to witness the climax of the Gold Corner.
After markets closed on September 23, Boutwell came to Grant, who had just returned from Pennsylvania, to discuss the gyrating gold prices unsettling Wall Street. That day, Fisk and his allies had driven gold prices sky-high, damaging many bears and inciting frenzied trading in the Gold Room. A hundred short sellers covered their losses by bidding gold to unimaginable heights. It was expected to soar even more the next day. As Boutwell recalled, “I then said that a sale of gold should be made for the purpose of breaking the market and ending the excitement.” Grant “asked me what sum I proposed to sell. I said: ‘Three million dollars will be sufficient to break the combination.’” Whether wishing to punish Gould and Fisk or simply alarmed by the turbulent trading, Grant replied: “I think you had better make it $5,000,000.”17 In
the end, Boutwell placed an order with General Butterfield in New York to sell $4 million worth of gold. According to one version of the story, Butterfield tipped off Gould before traders learned the news. Another claims Gould and his cronies tapped telegraph wires that carried news of the Treasury’s action and exploited a brief twenty-five-minute window to jettison more than $60 million in gold before prices crashed.
In the interval before the news hit, the price of gold zoomed sharply higher. Many in the Gold Room didn’t simply suspect that the Grant administration had turned a blind eye to the price manipulation, but that it had cooperated with its perpetrators. “Friends of the Administration openly stated that the President or yourself must have given these men to feel you would not interfere with them or they would never dare to rush gold up so rapidly,” a Wall Street operative told Boutwell. “In truth, many parties of real responsibility and friends of the Government openly declared that somebody in Washington must be in this combination.”18 Grant and Boutwell were set to refute, with a dramatic flourish, these malicious rumors noised abroad by Fisk and his myrmidons.
Shortly after Boutwell’s telegram was received on Friday morning, September 24, the surging gold market collapsed, the price per ounce plummeting from $160 to $133, plunging the trading world into chaos. Gould emerged unscathed from a debacle that wiped out many Wall Street dealers and went down in history as Black Friday. Fisk described the chaos in the Gold Room as “the wildest confusion and the most unearthly screaming of men.”19 By day’s end, it was “each man drag out his own corpse.”20 Gould and Fisk fled for their personal safety. The Gold Room was shut down for a week to restore order and deal with the wreckage. The economic repercussions were extensive. The Gold Room mayhem shaved 20 percent from stock market prices and cut trading volume in half for months, while fourteen stock exchange firms failed.