What’s really being celebrated on Black Friday and is it the biggest shopping day in the world?
Featuring Tom Merritt.
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Episode transcript:
At the end of the civil war the US government was deeply in debt, both from the cost of fighting and reconstruction. When General Ulysses S. Grant was elected president 1868 it had grown to $2.8 billion. That would be around 103.8billion in 2023.
To help pay for the war the government had begun issuing “greenback” dollars. These were not backed by gold or silver but promised an unspecified future payment. They had the effect fo driving up the price of gold.
So Grant’s administration pursued a policy of selling gold to buy up wartime bonds and by May 1869 the debt had been reduced to $12 million and the price of gold was suppressed.
All that cheap gold gaveJay Gould an idea. He was friends with Abel Corbin, who just happened to be married to Jennie Grant, the president’s sister. If they could prevail not he president to stop selling gold, the price would start going up. Knowing this in advance they could start buying up gold drilling up the price faster. Done right, they could corner the gold market and get unreasonably rich.
Gould enlisted one of his fellow directors at the Erie railroad, James Fisk into the plant.
On September 1, 1869 they started buying up large amounts of gold under other people’s names and driving up the price. Corbin planted the idea with Grant that selling gold would hurt western farmers and the plan should be suspended. But they got greedy. And when Grant’s personal secretary turned down an offer to open a gold account, they did it anyway. When he told the president about it Grant figured out what was happening. And on Friday September 24, 1869, the government resumed selling gold. Gold prices plummeted. And hundreds of people who were riding the gold wave along with Gould and Fisk, lost everything.
Stock prices plummeted 20 percent between that Friday and October 1st. Brokerage firms went bankrupt. Farmers really did get hurt this time with wheat and corn prices dropping by half. The economic turmoil lasted for months. Anti was all traced back to that one Friday. That Black Friday, in September 1869.
And it was that day that would, somewhat ironically, lend its name to what would become the biggest shopping day in the US.
Let’s help you Know a Little More about Black Friday.
Thanksgiving day was established by the US first constitutional president, George Washington in 1789. On the recommendation of Congress, President Washington proclaimed Thursday, November 26, 1789 as a Day of Public Thanksgiving. Thanksgiving days were proclaimed by subsequent presidents on a regular basis but the dates varied. It wasn’t until 1863 in the midst of the Civil War, that President Abraham Lincoln proclaimed that Thanksgiving should be commemorated on the Last Thursday of November each year.
The regularity made it a nice signpost not he calendar. Retailers began promoting holiday shopping starting the day after Thanksgiving.
That lasted until another economic depression, the great one. In 1939, the economy was showing signs of recovery. But Thanksgiving that year would fall on the very last day of the month. That meant the shortest possible holiday shopping season, meaning the smallest boost to the economy So President Franklin D. Roosevelt issued a proclamation that Thanksgiving would take place on the second to last Thursday of November, adding a week to the shopping calendar.
16 states refused to move the date and for two years, a third of the country celebrated Thanksgiving a week after the rest of the country.
So in October 1941, Congress passed a resolution declaring the fourth Thursday in November to be Thanksgiving. This kept it as the last Thursday most years, unless November happened to have 5 Thursdays. That kept the holiday shopping from getting too small without pushing it so far up the calendar.
Once that pattern was set, the Friday after Thanksgiving started to take on a character of its own. Workers began to call in sick on Friday in order to have a four day weekend. In 1951, the journal Factory Management and Maintenance began to refer to this phenomenon as Black Friday, referencing the panic of 1869. Friday also became a huge shopping day of course, and police in Philadelphia and Rochester began referring it to Black Friday as well because of the crowd management.
But the reference did not become common. The New York Times first called the Friday after Thanksgiving “Black Friday” in tis November 29, 1975 issue referring to the traffic in Philadelphia. But even as late as 1985, the Philadelphia Inquirer reported that merchants Cincinnati and Los Angeles were unaware of the term.
Meanwhile merchants were trying to avoid the usages connotations of a panic and disasters. As early as November 28, 1981, the Philadelphia Inquirer picked up an explanation put out by merchants that it was being called Black Friday because it was when retailers got “in the black” – aka profitable.
But by the late 1980s the term had gained wide acceptance. Retailers across the US began advertising Black Friday sales. More companies began to just give in and give workers Friday off since they were going to call in sick anyway.
By the mid 2000s the day had inspired “Cyber Monday” when workers came into their offices with computers and high bandwidth and shopped for deals online. Giving Tuesday was a counter-celebration to encourage people to spend money on charities instead of products.
The lockdowns because of COVID caused a lot of people to shift to online shopping on all days and by 2021, the Black Friday sales were no longer limited to Friday.
The prevalence of US-based retailers have caused the promotion of Black Friday sales outside of the US, even though those countries do not have the November Thanksgiving holiday. Some countries even promote Black Week or Black Month sales.
The success of Black Friday sales may have inspired Alibaba to co-opt a dating holiday in China called Singles day – on November 11th – to be a big sales day which now has passed Black Friday as the largest shopping day in the world.
Steely Dan wrote a song called Black Friday, released in 1975 just as the New York Times was picking up on the phrase in its post-Thanksgiving context. Steely Dan was writing about the 1869 panic but its words could apply to both
When Black Friday comes
I’ll collect everything I’m owed
And before my friends find out
I’ll be on the road
I hope you appreciate the probably unintentional double meaning. And hope you know a little more about Black Friday.
CREDITS
Know A Little More is researched, written and hosted by me, Tom Merritt. Editing and production provided by Anthony Lemos and Dog and Pony Show Audio. The public key cryptography players were Sarah Lane as Alice, Shannon Morse as Eve and Andrew Heaton as Bob. It’s issued under a Creative Commons Share Attribution 4.0 International License.