Summary and Analysis
Chapter XVIII - Free Fight
Even in the dormant Grant administration, a young reformer soon has plenty to write about. On September 24, 1869, the price of gold crashes spectacularly, exposing a scheme involving financiers Jay Gould and James Fisk as well as President Grant's own brother-in-law. The Legal Tender Act is still an issue, and Adams is concerned that the Constitution has lost its effectiveness because of emergency measures taken by the Lincoln administration during the Civil War. While they oppose slavery, for example, the Adams men maintain that even the Emancipation Proclamation was actually unconstitutional.
Adams often writes in cryptic terms in the Education, dropping a name here or an issue there with the assumption that his reader is thoroughly versed in the history of the time. With his initial audience, a close circle of friends, that may have been the case; later readers may need a little explanation.
The Gold Scandal of September 1869 allows Henry and his brother Charles to work as an investigative team. Jay Gould, president of the Erie Railroad and a capitalist known for his financial manipulations — along with his associate, James Fisk — attempts to corner the market in gold during the late summer of Grant's first year in office. The approach is to purchase as much American gold coin and bullion as possible in order to control the price. If successful, the scheme could then effect a monopoly, and the gold would sell at a much higher rate to those whose contracts require them to pay off debts in gold. This would especially impact foreign trade because other countries are reluctant to accept greenbacks. The two bring Grant's brother-in-law, a man named Corbin, into the deal with the expectation that this will dissuade Grant from intervention. On Black Friday, September 24, the price of a gold dollar (1/20 of an ounce) rises as high as $1.65 in paper money. At this point, Grant belatedly orders Secretary of Treasury Boutwell to place on sale $4,000,000 worth of government gold. The price of gold plummets, setting off a panic on Wall Street. Gould somehow knows of the Treasury sale in advance and sells his gold near the top price. Fisk, however, is not informed and is still buying as the price sinks. Although no one can prove that Grant or members of his Cabinet are directly involved in the scheme, Henry feels that the circumstantial evidence is overwhelming. (See Ernest Samuels' The Young Henry Adams and Jean Gooder, ed., the Penguin Classics edition of the Education for further comments.)
For Henry and Charles, the scandal is, as Henry says in the Education, "heaven-sent." Charles investigates corruption in the management of the railroads; Henry pursues the gold conspiracy and even gets an interview with James Fisk. James A. Garfield, who in 1881 will become the twentieth President of the United States (assassinated that year), heads an investigation as chairman of the House Committee on Currency and Banking. He exchanges information with the Adams brothers. For Henry, the result is one of his most highly praised articles, "The New York Gold Conspiracy," in the Westminster Review (October 1870). Although he is disappointed that more prestigious publishers refuse the piece, fearing charges of libel, he is delighted that the work is widely distributed in "pirated" versions. Charles's exposé of the railroads is so effective that his life is threatened. He survives, unharmed, to father five children and die at the age of eighty in 1915.
Henry is pleased with the reception of other articles, especially "The Legal Tender Act" in North American Review (April 1870), which accuses Congress of "a piece of intolerably impudent political abuse." He argues again against greenbacks and reiterates his belief in laissez-faire economics, hoping that the Grant administration will return the government's position to a hands-off policy. In another installment of political assessments called "The Session," in the North American Review (July 1870), he calls for Grant to restore the power of the Constitution and the federal government's system of checks and balances. All expectations to the contrary, it has been a productive and rewarding period for Henry.
profligate immoral and shameless.
âme damnée (French) stooge; a foil or underling.
skein here, a sequence or series of events.
peremptory barring further action; final.
putative considered or deemed such; reputed.
fiat an order issued by legal authority.