November 4, 2021
On Friday, November 26, 2021, we have again the so-called “Black Friday”.
Many associate this designation only with the day when there are great and cheap deals.
Some of us will even know that Black Friday is associated with a day in the US where the price of gold plummeted, and the markets crashed dramatically and hardly anyone will know that there has been a Black Friday in the United Kingdom before.
One by one in detail.
1951 Black Friday as a “shopping frenzy”
The term Black Friday for the shopping holiday that takes place every year was probably first used in reference to the shopping craze for which it is known today in the 1950s when the US city of Philadelphia was inundated with crowds of consumers who came to watch a football event taking place the day after thanksgiving and then to go shopping for the approaching Christmas.
In that period, the term the Philadelphia and Rochester police called it “Black Friday” to depict the overcrowding and the stalemate on the roads just before the Christmas market season.
1869 Black Friday in the USA markets collapse
Older readers, on the other hand, may think back to the Black Friday of September 24, 1869, when an attempt by a couple of Wall Street financiers to manipulate the price of gold resulted in a stock market crash that had catastrophic effects on the US economy.
This event, notoriously known as Black Friday, was generated by a manoeuvring between Jay Gould and James Fisk, two associates’ investors and Abel Corbin, a little broker, and the husband of Virginia (Jennie) Grant, the younger sister of President Grant.
They monopolized the gold market through the creation of a vehicle named “Gold Ring” and the sprouting of the price of the metal on the New York Gold Exchange.
This occurred during the Presidency of Ulysses S. Grant, whose strategy was to sell Treasury gold at weekly intervals to pay off national debt, stabilize the dollar, and boost the economy.
Gould wanted to profit from Corbin’s relationship with his brother-in-law, the President, and persuaded Corbin to introduce him to President Grant.
In fact, both Gould and Fish longed that siding with the President would provide them with confidential information related to the government’s gold policy and thereby manipulate the market.
They, further, used their personal appearances with Grant to gain classified data on Wall Street.
Through week one of September, George S. Boutewell, Grant’s Secretary of the Treasury, received a letter from the President informing him that gold sales are expected to be harmful to Western farmers, a hint that had been implemented by Gould and Fisk.
Thereby, Boutwell dropped the Treasury gold sales.
Meanwhile, Gould and Fisk initiated the buying of gold through New York City’s Gold Room, increasing the price of gold.
On September 24th, after Grant became aware of their real intentions, he first asked Corbin to unload their gold holdings and after the unloading threw $4 million worth of government gold on the market.
Correspondingly, these actions promptly reduced the price of gold.
Nevertheless, chaos broke out on Wall Street and the country crucially suffered months of economic upheaval.
But thanks to Grant’s consistent and swift action, an even worse national depression was averted.
The fellow Republican James A. Garfield led inquiry in 1870 vindicated Grant of any illegal engagement in the collusion.
1921 Black Friday in the United Kingdom
But Black Friday also refers to a less-known event that took place 100 years ago today, on April 15, 1921.
During that period, Great Britain was just trying to recover from the brutal effects of the First World War when it faced an emerging economic crisis.
As a result, the coal industry in the UK was facing financial struggles, and coal miners were confronted with the bleak prospect of having their wages reduced.
The British government, which at the time was in charge of the coal sector, was reluctant to impose salary cuts in fear of the political backlash likely to occur following such an unpopular decision.
However, the State relinquished its control of the industry on March 31, 1921, essentially absolving itself from the matter and leaving workers to fend for themselves against the powerful business interests.
Unsurprisingly, coal miners saw now their salaries put on the chopping block, and were threatened with layoffs if they dared to voice any objection.
It was, expected that the transport and rail unions –which along with the coal union made what was referred to as “the Triple Alliance”– would rally in solidarity with the coal miners’ cause and join them in calling for more equitable treatment.
In a surprising turn of events that took place on Friday, April 15, 1921, the representatives of the transport and rail unions publicly declared that they would not instruct their members to strike in protest to the salary cuts, effectively abandoning their fellow workers and allies and giving this day its dark historical significance.
The union leaders who made the call justified this perceived disloyalty by citing the Miners’ Federation of Great Britain’s refusal to give them a seat at the table in terms of the negotiations with management over the issue of wages.
In addition, there were allegations that the miners themselves were reluctant to engage in a strike in pursuit of their own demands, which hardly inspires others to get involved and jeopardize their own jobs.
There were also fears that the miners’ pleas for better work conditions would not be received with compassion by the British public when a large percentage of the population cannot even find employment.
Other labour organisations also refused to assist the coal miners in their struggle to protect their wages, including the National Sailors’ and Firemen’s Union –Britain’s main seamen’s union at the time– whose members voted against participating in a strike by a thin margin of 59 votes.
Since then, this day has been referred to as “Black Friday” by the British public and especially in trade union circles.
What an irony that Black Friday, a term historically so closely associated on the one hand with the financial struggles of workers during an economic depression and on the other with a crash in the markets in the USA, has become synonymous with extravagant consumption and an economic boom for retailers.
What a difference 100 and 152 years make!
