by H. W. Brands
“No,” Chapin replied. “I did not know anything about the contents of the letter. I meant to say that he had received the letters and read them; that they had been delivered all right.”
The wording of Chapin’s telegram became important as soon as it was delivered; in the meantime Horace Porter puzzled over the identity of the messenger. “Who is that man?” he asked Grant as Chapin drove away.
“I don’t know,” Grant responded. “Why?”
“I merely asked on account of the peculiarity of the letter of introduction which he brought to me. His name is not mentioned in it.”
“Letter of introduction from whom?” Grant asked.
“From Mr. Corbin of New York.”
“Is that messenger from New York?”
“He appears to be.”
Grant frowned. Porter recalled: “He seemed quite surprised, and was silent for a few moments.” He told Porter he had supposed the messenger was from the local post office, which frequently sent a courier with the mail.
Grant may or may not originally have questioned Corbin’s intentions in marrying his sister, but the letter and its mode of transmission definitely made him doubt Corbin’s good faith on the gold issue. He went back to Julia’s room, where he found her writing a note to Jennie. He thought for a moment, then told her: “Write this: ‘The General says, if you have any influence with your husband, tell him to have nothing whatever to do with Jay Gould. If he does, he will be ruined, for come what may, he (your brother) will do his duty to the country and the trusts in his keeping.’ ”
Jennie got the letter the next day and shared it with her husband, who shuddered at Grant’s words. “I was very much excited,” Corbin told the committee. “And my wife still more so.… Engaged in buying and selling gold—what a terrible thing! The world is about to come to an end immediately!…I must get out instantly—instantly!” Corbin related his and Jennie’s distress to Gould. “When Mr. Gould came in that night, I at once read to him the substance of this letter.… I told Mr. Gould, at once, that I must get out of this matter; that it had created a great deal of feeling in my own family, as well as on the part of the president, and that the matter must now end.”
Gould urged Corbin to reconsider. “I did not want to throw his gold on the market at that time,” Gould told the committee. Corbin testified that Gould offered to indemnify him against losses. “If you remain in and take the chances of the market, I will give you my check for $100,000,” Gould said, according to Corbin. “He looked at me with a look of severe distrust, as if he was afraid of treachery in the camp. He remarked, ‘Mr. Corbin, I am undone if that letter gets out.’ ”
Grant returned to the capital the next day, Thursday, September 23. George Boutwell had been monitoring the situation from his office in the Treasury. “I became satisfied that the matter was very serious,” he told the committee. “Gold was reported that day at about 145, and I was apprehensive from what I heard that it might advance to a still higher price the next day.” Boutwell expressed his concerns to Grant. “I went that evening to see the president and told him what the state of the market appeared to be from the information I had received. We had a consultation about it, the result of which was that if gold advanced materially the next day, it would be our duty to sell, not for the purpose of forcing down the price of gold as a primary and specific object, but because we thought the business of the country was in danger.” Boutwell remembered the panic of 1857 and feared a repetition. “I left the president without any specific understanding as to what should be done, except in a general way that if the excitement continued and gold advanced, it would be our duty to sell.”
The excitement did continue. Gould’s bribe kept Grant’s warning to Corbin from reaching other investors; Friday, September 24, dawned with the gold bulls believing that the government still would not intervene. The price leaped upward at the opening bell; it shot past 150, then 155, then 160. The gold bears were in a frenzy, as were merchants who needed gold in their businesses and found the prices ruinous.
Boutwell at the Treasury read the telegraphed reports from Wall Street. No indication appeared of a pause in the price rise—no profit taking, no breath catching. Just after eleven he returned to the White House. “I went over to the President and told him what the state of the market was, upon the information that I had,” he explained to the committee. “I went over with the idea of saying to him that I thought the time had come when we must interfere. I had a very strong conviction upon that point. I stated to him the condition of the market.… He expressed the opinion, almost at the beginning of the conversation, that we ought to sell $5 million. I recollect expressing the opinion that we should sell $3 million, because that was the amount that I had in my mind when I left the office, and I thought it would be sufficient for the purpose. We had very little conversation beyond that. I returned almost immediately, without saying to him whether I would order the sale of $5 million or $3 million, or of any other sum, except that it was agreed that gold should be sold. Upon going back to my office, I came to the conclusion that I should advertise the sale of $4 million.”
The order was telegraphed to New York. The effect was instantaneous. Within minutes the price fell from 160 to 135. The gold corner was broken. The gold bears and the merchants swooned with relief; the gold bulls bellowed as their dreams of instant wealth evaporated.
But damage had been done. The gold gyrations jolted the stock market, where panic afflicted many who had nothing directly to do with gold. For weeks Wall Street’s affairs were in chaos. “It was each man drag out his own corpse,” Jim Fisk told the committee. “Get out of it as well as you can.” The troubles didn’t travel much beyond the Hudson and East Rivers, sparing the nation’s economy as a whole, but dark memories of “Black Friday” persisted among the investing classes.
And among those charged with their oversight. Grant’s decision to burst the gold bubble didn’t immediately dispel the earlier rumors that he and members of his administration had stood to gain from gold’s rise. Congress convened an investigation; the various principals, from Jay Gould and Jim Fisk to Abel Corbin and George Boutwell, were called to testify. Grant was not summoned, although he agreed to speak to a representative of the Associated Press about his actions. “The President conversed with the utmost frankness on the subject,” the newsman reported, “and said he had not thought proper to publicly contradict the statements concerning himself, as he had done nothing whatever to influence the money market or to afford any advantages to private parties.” This reporter found Grant fully credible. “It may be repeated that the President had informed no one whomsoever of the purpose of the Administration on financial subjects,” he wrote.
The congressional committee agreed. It excoriated Gould for trying to manipulate the market and Corbin for exploiting his connections to Grant. It implicated Daniel Butterfield, a Treasury official who may have served Gould as a second source of intelligence on the administration’s plans. But it cleared Grant. “The committee find that the wicked and cunningly devised attempts of the conspirators to compromise the President of the United States or his family utterly failed,” the committee declared in its final report. The committee excluded in-laws from this exoneration; Corbin “used all his arts to learn something from the private conversations of the President which could be made profitable to him and his co-conspirators.” But he failed. “With this and all the efforts of his associates, the testimony has not elicited a word or an act of the President inconsistent with that patriotism and integrity which befit the Chief Executive of the nation.”
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ADOLPH BORIE THOUGHT THE PRESIDENT’S HANDLING OF THE GOLD crisis deserved comment more positive than the committee’s mere exoneration. “What a wonderful shot that was of General Grant!” the navy secretary wrote Adam Badeau. “Never in all his great camps in the war did he strike a surer blow! I haven’t ceased laughing about its effect ever since; that crazy wicked hole (New York) will long remember
it nor cease to feel that there is a power, when ably and honestly wielded, that can thwart their evil machinations when at the worst and least expected.”
In this same letter Borie conveyed sad news regarding one of Badeau’s and Grant’s wartime comrades. “Poor Rawlins has gone to a happier office,” Borie said. “A noble fellow, truly; he was so pure, zealous, and earnest.”
Mary Rawlins got the grim word from Grant. “Your beloved husband expired at twelve minutes after four o’clock this afternoon, to be mourned by a family and friends who love him for his personal worth and services to his country, and a nation which acknowledges its debt of gratitude to him,” the president wrote the new widow. The death wasn’t unexpected; Rawlins had been ill for months. “Yet his final taking off has produced a shock which would be felt for but few of our public men,” Grant told Elihu Washburne.
Grant lamented the passing of Rawlins as any old friend and wartime comrade would have, but certain of Grant’s associates felt a special concern that Rawlins would no longer be at his commander’s side. James Wilson, who had served with both men, wrote Orville Babcock, Grant’s secretary: “You and I know how necessary the bold, uncompromising, and honest character of our dead friend was to our living one, and how impossible it is for any stranger to exercise as good an influence over him as one who has known him from the time of his obscurity till the day he became the foremost man of the nation.” Wilson recalled the drinking stories, but he interpreted Rawlins’s positive influence more broadly. “He was the President’s best friend and most useful counselor when engaged in denouncing rascality, which the President’s unsuspicious nature has not dreamed of being near.”
Hamilton Fish had a different reaction. Fish knew Rawlins chiefly as a cabinet colleague and one whose judgments differed, quite strongly at times, from his own. When a Cuban insurgency against the Spanish colonial government triggered a brutal response from the Spanish and their Cuban loyalists, Rawlins called for American intervention on behalf of the insurgents. The insurgents’ fight was democracy’s fight, Rawlins said, and taking their part, at least to the degree of recognizing their belligerent status, would affirm America’s position as the defender of democracy in the Western Hemisphere.
Rawlins was hardly alone in calling for a pro-insurgent policy. The Cuban cause—promoted by an energetic and imaginative political office, or junta, in New York—elicited substantial support among the American people and on Capitol Hill. New York Tribune editor Horace Greeley organized a rally at Manhattan’s Cooper Union and forwarded to Grant its petition citing the Monroe Doctrine, hemispheric peace and the principles of republican self-government as grounds for American recognition of Cuban belligerency. Members of Congress lent their voices to the chorus. Some were sincere, others opportunistic. By damning Spain they could show their devotion to democracy, demonstrate their commitment to American national security and distract voters from the troublesome questions of domestic politics. They could also assert the primacy of Congress over the president in American politics. The Republicans had been glad to ride Grant’s popularity to victory in the 1868 elections, but few Republican legislators wanted to relinquish even to a president of their own party the political ground they had seized from Andrew Johnson. John Sherman liked Grant and backed most of his policies, but the Ohio senator spoke for many when he argued that the president must take his cues—indeed his orders—from Congress. “The executive department of a republic like ours should be subordinate to the legislative department,” Sherman declared. “The President should obey and enforce the laws, leaving to the people the duty of correcting any errors committed by their representatives in Congress.”
Opposing Rawlins and the interventionists was Hamilton Fish. The secretary of state doubted the Cuban insurgents’ stamina and didn’t think the United States was ready for the war with Spain that recognition of the insurgents might lead to. Fish had another reason, unrelated to Cuba or Spain, for opposing recognition. He was in the middle of difficult negotiations with the British government over American claims from the Civil War, and central to his case was the contention that Britain had illegitimately aided Confederate belligerency. For the Grant administration to adopt a policy toward Cuba akin to the policy it was condemning Britain for having taken toward the South would, needless to say, weaken Fish’s hand in the bargaining.
Grant initially tilted toward Rawlins. He looked on Spain in Cuba much as he had looked on France in Mexico at the close of the Civil War. He thought European soldiers anywhere near the United States posed a danger to American interests, and he believed that the sooner and more definitively they were withdrawn the better. He put great weight on the Monroe Doctrine, with its assertion of the Americas for the Americans, and he looked for opportunities to enforce it. In July 1869 he drafted a statement recognizing Cuban belligerency and declaring American neutrality between the insurgents and the government, in order to have it ready if the need arose. And he conspicuously held the possibility of recognition and neutrality over Spain’s head as he volunteered America’s diplomatic resources to mediate an end to the conflict. When Spain ignored his offer, announcing instead an escalation of the military effort in Cuba, Grant prepared to push forward. “I think it advisable to complete the neutrality proclamation which I signed before leaving Washington and to issue it if Gen. Sickles”—Daniel Sickles, Grant’s envoy to Madrid—“has not received an entirely satisfactory reply to his proposition to mediate between Spain and the Cubans,” the president told Fish in August. “In fact I am not clearly satisfied that we would not be justified in intimating to Spain that we look with some alarm upon her proposition to send 20,000 more troops to Cuba to put down, as Americans believe, the right of self-government on this Continent.” Grant thought the Spanish government should be warned of the consequences of its escalation. “Such a course would arouse the sympathies of our citizens in favor of the Cubans to such a degree as to require all our vigilance to prevent them from giving material aid.”
The Spanish would know what this meant. The insurgent junta, besides coordinating a publicity campaign, arranged the purchase of American weapons and the outfitting of military expeditions to Cuba. Grant had taken some pains to interdict the expeditions, which violated American statutes against launching undeclared war from American soil. By hinting that American vigilance might not suffice to stop the expeditions, Grant came close to winking at an undeclared war against Spain.
The Spanish government took the hint. Madrid tentatively accepted Grant’s mediation offer. The president withheld the recognition statement but pressed harder. “The United States are willing to mediate between Spain and Cuba, on the following terms,” he wrote to Sickles: “Immediate armistice; Cuba to recompense Spain for public property, etc.; all Spaniards to be protected in their persons and property if they wish to remain on the island, or to withdraw with it, at their option; the United States not to guarantee”—the Cuban payment to Spain—“except with the approval of Congress.” The president added that this offer, dated August 31, would expire on September 25. He urged the Spanish not to tarry.
While Grant awaited Madrid’s response, two events intruded upon his reckoning. Rawlins died, depriving the interventionists of their strongest voice in the cabinet. And Jay Gould’s plot to corner the gold market climaxed, drawing the attention of the president and the country away from Cuba. The Spanish, perhaps recognizing America’s distraction, let Grant’s deadline pass without acceding to his demands.
Quite possibly Grant never intended more than stern words to Spain; with the wounds of the Civil War still healing, he had no desire to rush into another war. Doubtless the tumult of Black Friday made him count the costs, political as well as economic, of a foreign war more closely than he might have counted them otherwise. In any event, a carefully balanced statement in Grant’s December annual message indicated a shift away from imminent intervention. “For more than a year a valuable province of Spain, and a near neighbor of ours, in whom all our peo
ple cannot but feel a deep interest, has been struggling for independence and freedom,” the president said. The American people and government sympathized with Cuba, as they had sympathized with other Spanish colonies in their previous and mostly successful fights for freedom. Yet sympathy alone afforded insufficient basis for policy. “The contest has at no time assumed the conditions which amount to a war in the sense of international law or which would show the existence of a de facto political organization of the insurgents sufficient to justify a recognition of belligerency.” The administration had not been idle, Grant reminded; it had offered to mediate a settlement of the conflict. Unfortunately the Spanish government had rejected the offer. But the president professed not to be discouraged. “It is hoped that the good offices of the United States may yet prove advantageous for the settlement of this unhappy strife.” All the same, the Spanish should not assume infinite forbearance on America’s part. “This nation is its own judge when to accord the rights of belligerency, either to a people struggling to free themselves from a government they believe to be oppressive or to independent nations at war with each other.”
Grant’s message didn’t suit the ardent interventionists, who wanted a commitment to Cuban independence. But it calmed matters enough for Grant to focus on a Caribbean question he preferred. The sea to America’s south had stirred the country’s passions for decades. Prior to the Civil War those passions had been primarily Southern, as expansionists in Dixie looked on Cuba and its West Indian neighbors as suitable for the spread of slavery, to offset the continental curbs imposed by the Missouri Compromise and growing Northern antipathy. Precisely that Northern antipathy, though, prevented the Southern dreams from becoming real. The Civil War and emancipation changed the moral and political calculus, to the degree that the Cuban insurgency triggered its strongest American response among Northern liberals.