You may think of Black Friday as a great shopping opportunity but historically the first Black Friday on Sep. 24, 1869, was the result of a wild scheme to corner the gold market.
After the Civil War, when the US economy was a mess, two ruthless opportunists, the heads of the Erie Railroad, Jay Gould (nicknamed the Mephistopheles of Wall Street) and Jim Fisk set out to corner the gold market. They bought as much gold as they could hoard, hoping to drive the price up. As part of the scheme, they included President Grant’s brother-in-law Abel Corbin in their Gold Ring and sought to curry favor with the president and influence him.
Grant’s Secretary of the Treasury was paying off the national debt with bi-weekly sales of Treasury gold which worked against the interest of the Gold Ring. Gould and Fisk tried to convince Corbin and Grant that the Treasury gold sales were bad for Western farmers. Grant spoke to the Treasury and gold sales were suspended for most of September 1869 and the Gold Ring gobbled up more gold.
When Grant discovered the scheme, he first let his brother-in-law sell off his gold before having the Treasury reinstitute the Treasury gold sales on Friday September 24th. The precipitous drop in gold prices caused the ring and many Wall Streeters to lose millions on Black Friday. The resulting scandal damaged Grant’s reputation and the US economy.
Black Friday became associated with the day after Thanksgiving in Philadelphia by 1951. The police were weary of the traffic from hordes of holiday shoppers and Army-Navy game attendees that clogged the city the day after Thanksgiving. The streets were black with traffic, so they called the day Black Friday. Merchants tried to rebrand the day as Big Friday but could not overcome the Black designation. By the 1980s merchants fully embraced the name seeing that the sales moved their books from the red into the black.
Massive online retailers like Amazon can create shopping demand through events like Prime Day even in the middle of the year. Sophisticated marketing and analytics tools allow stores to reach customers with just a few clicks anytime, whether or not it’s Black Friday.
The term Black Friday has had many metamorphoses over the years, going from a speculative gold scheme to a Philadelphia stampede to a retailer boon. As shopping technology advances, Black Friday may once again evolve into a new meaning.