Perpetuated by two New York City newspapers the Civil War Gold Hoax was brought about on May 18^th 1864 when they published a story stating there would a call for another 400,000 men to be drafted.

Two New York City newspapers, the New York World and the New York Journal of Commerce published a story in May 18^th 1864 that President Abraham Lincoln was calling for the conscription of 400,000 more into the Union army.  This caused prices to fall on the New York Stock Exchange, making investors buy gold, causing the price od gold to increase by 10%.

Many people where suspicious of the story.  The fact that only two papers had published the report sent up flags.  The editor of the two papers showed the Associated Press report they had received.  When checked, the Associated Press stated the dispatches had not come from them.  Further research showed the dispatches had been delivered after the night editors had gone home, and the night foremen had to decide whether to publish.  Lincoln ordered the two papers shut down and had their editors arrested for complicity.

The perpetrators were tracked down on May 21^st 1864.  Francis Mallison a reporter and Joseph Howard Jr the city editor of the Brooklyn Eagle were arrested.  Howard confessed that he had bought gold on May 17^th 1864 and started the story to cause the price to rise.  He stated that he wrote the AP reports and sent them out city newspapers.  He sold off his gold the next day during the panic.  Howard was sentenced to three months in prison.

If you’re interested in reading more try, The Great Civil War Gold Hoax