From Manhattan to the White House, Joseph Howard Jr.’s Great Gold Hoax causes a frenzy.
On the morning of May 18, 1864, New Yorkers awoke to startling headlines in the New York World and in the Journal of Commerce. Their worst fears about the outcome of Lt. Gen. Ulysses S. Grant’s bloody Overland Campaign against Gen. Robert E. Lee in Virginia seemingly were confirmed by a timorous presidential proclamation calling for a day of “fasting, humiliation, and prayer.” The proclamation painted the prospects for victory as distant. Although President Abraham Lincoln expressed confidence in the “courage and fidelity” of General Grant, in view of “the situation in Virginia, the disaster at Red River, the delay at Charleston, and the general state of the country,” he “thought it ft to call forth” an additional 400,000 men to suppress the Rebellion. Should states fail to meet their quotas, Lincoln announced, any shortfalls would be met by “an immediate and peremptory” draft.
Wall Street read the news and panicked. At the opening bell stocks plummeted and gold prices soared. Outside the stock exchange angry crowds assembled. With memories of the violent July 1863 New York Draft Riots still fresh, spontaneous calls arose for a rescission of the proclamation. Frightened traders and harried brokers descended upon the Journal of Commerce to demand the newspaper affirm or deny its authenticity. Among those seeking an answer was former Maj. Gen. George B. McClellan, who shoved his way into the newspaper’s office while the Journal’s financial editor told the crowd that the proclamation had been transmitted over the wires of the Associated Press and must therefore be genuine.
But it wasn’t. The “proclamation” emanated not from the White House, but from the residence of Joseph Howard Jr., city editor of the Brooklyn Eagle. A veteran journalist of great talent but elastic ethics, 30-year-old Howard recently had lost heavily in stocks and gold speculation. Casting about for a way to retrieve his fortune, he hit upon the idea of propagating a spurious draft call in the New York press. To confirm his hunch that such doleful tidings would roil the market and cause a spike in gold prices, a week earlier Howard showed a prominent New York broker an advance copy of a proclamation he claimed to know “through secret channels of intelligence at Washington” that the president was about to issue. The stock broker agreed such a measure would certainly push gold prices upward. Thus assured, Howard bought a large quantity of gold shares with the intention of realizing a fast profit from his scheme.
Presumably on the promise of a share in the take, Howard enlisted the young Eagle reporter Francis A. Mallison as co-conspirator. On the night of May 17 they met at Howard’s Brooklyn home. Howard dictated the text, and Mallison drew up copies in the AP style on pilfered company paper using a stylus stolen from the New York Tribune. They parted company at 11 p.m. Mallison drove into the city and hired a boy—a “street urchin” by some accounts—to masquerade as an AP messenger and deliver the bogus proclamation to the five major New York dailies between 3 and 4 a.m. The timing was critical. By that hour editors would have gone home, leaving newspaper operations in the hands of night foremen who would be less likely to detect fraud.
Mallison’s messenger had mixed success. The boy was unable to deliver a copy to the Tribune because the editorial rooms were locked and unoccupied. At The New York Times, the night editor happened not to have left. Not recognizing the handwriting, he sent the message to the nearby AP office with a note asking its origin. Immediately came the reply: “The proclamation is false as hell and was not promulgated through this office.” Although the Herald printed it, alert editors managed to halt the morning edition before it left the premises. But foremen at the World and Journal of Commerce fell for the ruse, and no editors were on hand until after the newspaper hit the stands. Coincidentally or otherwise, both newspapers were virulently anti-Lincoln, the World having ridiculed the president’s call for a draft the previous year as “unnecessary and mischievous.”
While Wall Street reeled, AP and the World and Journal of Commerce moved rapidly to limit the damage. AP issued a public statement at 11 a.m. denying they had received or transmitted the purported presidential proclamation. Manton Marble, chief editor of the World, ordered newspaper sales suspended, recalled issues destined for the European steamer about to depart from New York Harbor and offered a reward for information on the forger. Then he and William C. Prime, his counterpart at the Journal of Commerce, hastened to the headquarters of the Military Department of the East to plead their innocence to Maj. Gen. John A. Dix. The 66-year-old former secretary of the Treasury had little tolerance for disloyalty. At the outbreak of the war, Dix had ordered Treasury agents in New Orleans to shoot on the spot anyone who attempted to haul down the American flag, an act that made him an early hero in the North. As commander of the Department of Maryland later that year, he arrested members of the Maryland state legislature before it could consider secession, and in July 1863 he helped suppress the New York City draft riots. Although well aware of the anti-administration sentiments of Marble and Prime, he believed their newspapers had been duped into printing the proclamation. Dix let the men return to their offices and began an investigation.
In contrast to Dix’s level-headed approach, the Lincoln administration reacted as though New York City were about to erupt in fresh rioting or fall prey to a pro-Confederate coup. After assuring Dix that the “spurious proclamation is a base and treasonable forgery,” Secretary of State William H. Seward and Secretary of War Edwin M. Stanton convinced President Abraham Lincoln to suppress the World and Journal of Commerce. Lincoln’s order to Dix, probably drafted by Seward, bordered on the hysterical. Having “wickedly and traitorously published…a false and spurious [presidential] proclamation…designed to give aid and comfort to the enemies of the United States,” the editors, proprietors and publishers of the World and Journal of Commerce were to be arrested and held pending trial by a military commission, and their offices closed down.
Stanton and Seward believed the scheme originated in Washington and that the Independent Telegraph Company had knowingly transmitted the bogus dispatch. A relatively new wire service that lacked the government patronage enjoyed by the Associated Press, it was an easy target. Stanton sent a military detail to demand the records of the company’s Washington office. When the manager refused, the soldiers ransacked the office, arrested everyone and carted them off to the Old Capitol Prison. At the same time, Stanton ordered Dix to seize the New York office and military authorities in Philadelphia and Harrisburg to close Independent offices in those cities.
The president’s order troubled Dix. There indeed had been “gross fraud” committed, which he was investigating. But, Dix told Stanton, the newspapers appeared to be blameless victims of a well-conceived hoax; the fake proclamation, he said, was “admirably calculated to deceive,” and the World had offered a reward for information on its author. Nevertheless, he would execute the order unless instructed otherwise.
Stanton raged when he read Dix’s telegram that afternoon. The matter was quite clear to the secretary of war. “A great national crime” had been committed; the editors, proprietors and publishers of the offending newspapers were guilty, wittingly or not; no one had authorized Dix to investigate and there could be no justification for delay in executing Lincoln’s order. The general had best comply at once.
But Dix had done his duty, at least in part. Before dusk on May 18 the offices of the Independent Telegraph Company, the World and the Journal of Commerce all stood padlocked and vacant under military guard, their employees incarcerated at Fort Lafayette in New York. Possibly on Dix’s advice, Lincoln revoked the portion of the order calling for the arrest of Marble and Prime.
It was good that he had. Acting on a tip to Dix from the broker with whom Howard had shared his “secret intelligence,” a United States marshal and two New York deputies arrested the nefarious newsman on the afternoon of May 20 at his Brooklyn home. Howard freely confessed his guilt. “Says it was a stock-jobbing operation,” Dix wired Stanton, in which no one other than Francis Mallison had a hand. When Dix apprehended Mallison the next day, he confirmed Howard’s claim. The confessions satisfied Lincoln, and he permitted the newspapers to reopen. But he refused to exonerate senior management. Stanton conveyed both messages to Dix. “The President directs me to say that while, in his opinion, the editors, proprietors, and publishers of the World and Journal of Commerce are responsible for what appears in their papers injurious to the public service and have no right to shield themselves behind a plea of ignorance or want of criminal intent, yet he is not disposed to visit them with vindictive punishment, and hoping they will exercise more caution and regard for the public welfare in the future, he authorizes you to restore to them their respective establishments.”
Separate orders followed allowing the Independent Telegraph Company to resume operations. By way of recompense, Stanton invited the AP rival to connect its lines with the War Department, giving it ready access to war news.
Political fence-mending proved more difficult. In a singular show of unity, both Republican and Democratic newspapers dropped their partisan differences to condemn the administration. The moderate New York Times likened government response to “hanging a man in advance of the trial.” Resolutions of censure calling Lincoln’s actions “a violation of the Constitution and subversive to the principles of civil liberty” were narrowly defeated in the Republican-controlled Senate and House of Representatives.
None of these reactions surprised Secretary of the Navy Gideon Welles. A former newspaper owner himself, Welles in his diary called the suppression of the World and Journal of Commerce “hasty, rash, inconsiderate, and wrong, and cannot be defended. These things weaken the Administration and strengthen its enemies,” something Lincoln could ill afford in an election year. That is not to say Welles had any sympathy for Howard. “He is of a pestiferous class of reckless sensation writers for an unscrupulous set of journalists who misinform the public mind… [without] regard for truth.” While Welles scribbled his disgust in his private diary, Harper’s Weekly publicly condemned Howard as “in the least degree infamous and dishonorable.” Some newspapers saw humor in Howard’s skulduggery, calling the episode the “Great Gold Hoax,” and the bogus dispatch, “Howard’s Proclamation.”
Joseph Howard Jr. was no stranger to controversy, or to the Lincoln administration. As a correspondent for The New York Times and member of the press corps traveling with the president-elect to Washington in February 1861, he was responsible for the false but widely credited story that Lincoln sneaked off the train in Baltimore disguised in a Scotch plaid cap and long military cloak to avoid assassination. The next year Howard violated a ban on reporters at the funeral of Maj. Gen. Philip Kearny by showing up dressed as a priest. He also wrote several incendiary interviews with angry New York workingmen just before the Draft Riots.
Howard’s well-connected father, John T. Howard, saw to it that his “ingenious scamp” of a son did not spend much time behind bars. The elder Howard was a close associate of Henry Ward Beecher, the famous antislavery clergyman and orator. In a letter to Republican bigwig John T. Defrees, then serving the administration as Public Printer, Beecher pled for Joseph Howard’s release. “He had only the hope of making some money…& had not foresight or consideration enough to perceive the relations of his act to the Public Welfare,” the reverend wrote. “You must excuse my earnestness. He has been brought up in my parish & under my eye and is the only spotted child of a large family.’’
Defrees forwarded Beecher’s letter to the president along with his opinion that “the public good does not require the further punishment of Howard…and his release will gratify many true friends,” particularly Beecher. Lincoln needed no further convincing. It was an election year, and Beecher’s support was crucial. Perhaps the president also saw the irony of the situation. On the very day Howard and Mallison penned their forgery, Lincoln had written a proclamation calling for the draft of 300,000 more men. The nation’s reaction to the bogus proclamation caused him to delay announcing his own until July 18, 1864, precisely two months after the hoax made headlines. On August 23, 1864, Lincoln ordered Howard’s release from custody as a prisoner of war at Fort Lafayette. Whether Howard made money on his scheme, or was allowed to keep it if he had, is unknown.
One would think that the New York press would have shunned Joseph Howard after all the grief he had caused. On the contrary, The New York Times immediately rehired him as a reporter. Clearly Howard’s journalistic talent more than compensated for his mischief, and he remained a prominent member of the city press corps. In 1869 Howard became managing editor of the New York Democrat, and later a political writer for the New York Herald and a nationally syndicated columnist. He helped found the New York Press Club and served four times as its president. He also was president of the International League of Press Clubs. Whatever Howard’s shortcomings, no one could accuse him of ingratitude—in 1889 he penned a laudatory biography of Henry Ward Beecher.
Francis A. Mallison was likewise welcomed back into the fold. Released from Fort Lafayette one month to the day after Howard, he eventually became city editor of the Brooklyn Eagle himself, and went on to serve in the New York Assembly.
Perhaps William C. Prime expressed New Yorkers’ spirit of forgiveness best when he wrote of Howard’s hoax in his Journal of Commerce, “God Grant that we may live and work, till this story is remembered as a hideous dream.”
Peter Cozzens is author of 16 books on the Civil War and the American West.
Originally published in the July 2014 issue of America’s Civil War. To subscribe, click here.