By Joseph Calandro, Jr.

Following the end of the Civil War in 1865, there was a massive investment boom as spending shifted from the military to industrial production. Nevertheless, when Ulysses S. Grant became the 18th President of the United States on March 4, 1869, the nation’ s finances were under pressure. The monetary base topped at $ 1.083 billion in 1865 and declined to $ 740.641 million in 1869, which was the post-war low, while the national debt declined every year from 1867 to 1874. Significantly, the monetary base was predominantly fiat as US notes( greenbacks) and national bank notes comprised 81.9 % of it. This troubled Grant for, as he stated in his December 6, 1869 Annual Message:“ Among the evils growing out of the rebellion … is that of an irredeemable [ or fiat ] currency.”

One consequence of investment booms is speculative activity. In his first term, President Grant was confronted with an attempted gold corner by speculator Jay Gould. According to Maury Klein,“ It was surprisingly easy to corner the available supply of gold in New York. The amount, usually ranging between $ 15 million and $ 20 million, could be purchased on credit with a modest investment and then loaned to merchants who were short.” This was, however, risky as the government could break a corner by selling some of its gold holdings, but if it could be convinced not to do that a corner could succeed.

To facilitate that, Gould met with Grant personally, tried to bribe his private secretary( General

Horace Porter) and lobbied his brother-in-law for favorable gold policy, which included the recruitment of General Daniel Butterfield, the new head of the New York subtreasury. None of this worked.

34 FINANCIAL HISTORY | Summer 2025 | www. MoAF. org