Definition of Black Friday


search - explain Black Friday

historic definition...

Black Friday -- Friday, September 24, 1869. At that time gold was subject to considerable fluctuation in value and it was bought and sold the same as stocks . Jay Gould, then the president of the Erie Railroad and a daring speculator, conceived the idea of buying up all the gold in the market and compelling those who had sold it short to buy of him at a greatly increased price when their contracts should mature. He associated others with him in the scheme and put it in operation. He forced the price up from 133 to 162 in about twenty days. The high price was reached on Black Friday. The greater part of the increase in price was accomplished on that day and the day preceding. On Black Friday the Gold Bank, through which the transactions in the Gold Room were cleared, failed and the governing committee of the Gold Room at once ordered a suspension of dealings in gold for one week. More than half the members of the Gold Room failed. The corner in gold collapsed and the price of gold immediately fell. The attempt of Mr. Gould and his associates to corner gold was based on the fact that the United States Treasury had discontinued the sale of gold, which was calculated to place and maintain a premium on it. Indeed, the purpose of discontinuing its sale was to establish, not a moderate, but a considerable premium on it. The balance of international trade at the time was heavily against the United States and in favor of Europe. It was thought and it was urged by exporters and importers of products and manufactures alike that a high premium on gold would force the exportation of United States products, which would serve to discharge obligations of the United States to Europe and thereby obviate the necessity of sending gold to Europe. Mr. Gould and his associates counted on a continuance of the new rule of the Treasury not to sell gold, but when the corner was in effect and the great increase in the premium on gold had been accomplished by the speculative coterie in it there was a widespread appeal to the Secretary of the Treasury to resume sales of gold. The appeal was acceded to and the corner in gold collapsed with the disastrous consequences already recounted. There are two Black Fridays in British financial history. On a Friday early in December, 1745, London heard that the young pretender, Charles Edward Louis Philip Cassimer Stuart, was at Derby, only 120 miles from London, with his invading force. A panic ensued with an accompanying run on the Bank of England, but it was stopped by the sending of a force under the Duke of Cumberland to meet Charles Edward and his followers. The second Black Friday in London was May 11, 1866, when there was a panic with a run on the banks as a consequence of the announcement late in the afternoon of the day before of the failure of the great discount house of Overend, Gurney & Co., Limited, which had only a year before been converted from a private concern into a joint-stock company.

About the author

Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".

Copyright © 2007 by Mark McCracken, All Rights Reserved. is an informational website, and should not be used as a substitute for professional financial or legal advice. and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.