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A illustration from the late 1800s showing the calamity of the U.S. stock market after news broke of a falsified drafting.

By Charles Apple

Despite what you might hear from some people, we in the news media try hard to be fair and accurate in the stories we bring you every day. The journalism school adage is: “If your mother tells you she loves you, check it out.”

But that wasn’t always the case. One hundred and 60 years ago Saturday, in fact, a New York newspaper editor had an idea he could get rich overnight. All he needed to do was spread a baldfaced lie about President Abraham Lincoln...

It Was May 1864

The Civil War was dragging on, to the displeasure of voters in the North who were not necessarily sold on another four years of an Abraham Lincoln administration.

Gen. Ulysses S. Grant, however — newly in charge of the Army of the Potomac — had arrived in Virginia and was on his way to a siege of the Confederate capital of Richmond.

The phrase “light at the end of the tunnel” had not yet been coined. If it had been, rest assured it would have been used.

On May 18, two New York City newspapers ran some bad news: President Lincoln called for a “a day of fasting, humiliation and prayer.” More important, he was calling up 400,000 more troops for the war effort.

The Papers

A archived page of The New York World
A archived page of The New York Journal of Commerce.

That morning, Wall Street reacted just as you’d have expected it to: Stock prices plummeted. The price of gold — then, as now, a haven for investors during tough times — shot up.

There was just one little problem: Lincoln had said no such statement yet.

The Story

Strangely enough, the story had appeared in only two newspapers. It didn’t take long for folks to wonder why.

A dispatch containing the news had arrived at 3:30 that morning, the nighttime press foremen said, after the night editors had gone home. The dispatch appeared to be from the Associated Press and was delivered in the usual way: by street urchin courier. This sort of thing happened all the time. Not suspecting a bogus report, the foremen at the World and the Journal had stuffed the item into that day’s papers and rolled their respective presses.

But other New York papers didn’t fall for the trick. Some had rules against late news — what we today call a “deadline.” A few others checked around, despite the late hour, and discovered that not all papers had received the AP dispatch. Smelling a possible rat, they ran the risk of getting beaten on the story and held it so editors could check it out the next day.

While the stock markets gyrated wildly, an angry crowd gathered outside the offices of the Journal of Commerce, demanding answers.

Lincoln was incensed. He issued a statement calling the news story “false and spurious,” accusing the Journal of Commerce and the World of acting “wickedly and traitorously” and ordered the papers shut down and the editors and publishers arrested.

A portrait of Abraham Lincoln
Mead Art Museum

The Scam

It took investigators only three days to figure out who was responsible for the hoax: Joseph Howard, 35, the city editor of the Brooklyn Eagle.

What’s worse: Howard had pulled this sort of stunt before. In 1861, he had written that Lincoln rode through the streets of Baltimore on the way to his inauguration wearing “a Scotch cap and long military cloak.” In 1862, Howard had violated a military order by sneaking into the funeral of an Army general — dressed as a clergyman.

Howard and an accomplice — Eagle reporter Francis Mallison, who wrote under the suddenly ironic pen name Francis O’Pake — had borrowed money and used it to buy gold. They then composed the fake dispatch and had it sent to New York City newspapers.

By the time the stock market opened on May 18, news of the dispatch was all over town, but no one yet suspected it was fake. Howard sold his gold that morning for the kind of money we newspaper folks rarely see.

A portrait of Joseph Howard ran by a newspaper of the times.
Wikimedia Commons

The Arrests

When detectives arrived at Howard’s home on May 20 to take him into custody, Howard expressed amazement that the false item had caused such a furor but admitted he had made up and dictated the story.

The next day, a police officer brought in Mallison, who confessed to taking dictation of the item from Howard and hiring a runner to deliver the fake stories to newspapers around the city.

By this time, New York’s other newspapers had begun editorializing about Lincoln’s closing the Journal of Commerce and the World. Military officials released the papers’ editors and publishers on May 21, a Saturday. They immediately began working on Sunday editions.

Howard and Mallison were sent to a federal prison at Fort Lafayette in New York Harbor, where they were held without an indictment or a trial.

Howard’s father begged Lincoln for the release of his son, which the president granted on Aug. 22. Howard then wrote Lincoln himself, asking for Mallison’s freedom. Lincoln obliged on Sept. 23.

Neither Howard nor Mallison or their publishers or newspapers were ever charged with a crime.

Mallison was welcomed back to the Eagle. He was promoted to city editor, quit to serve in the New York State Assembly and then worked as a political correspondent. He died of jaundice in 1877 at age 45.

Howard went on to even greater things: He worked for the New York Times, the New York Star, the New York Sun and the New York Herald.

Howard wrote a column on politics that was widely distributed throughout the country and not only founded the New York Press Club but also served four times as its president. He died of kidney failure in 1908 at age 74.

The Aftermath

The fake news story, the blip in the stock market and in gold prices and Lincoln’s ill-advised — especially in an election year — crackdown on New York newspapers all happened during the Civil War.

The South was slowly wearing down, but it was costing the Union Army manpower. Which is why a call by the president for more troops was so believable.

Sure enough on July 19 — two months after the gold hoax and while its perpetrators were still in prison — the president indeed issued a call for 500,000 more men ... 100,000 more than the hoax had said.

One must wonder what went through the heads of newspaper editors when they were handed news of this callup.

he entire episode is rather baffling. But investigative reporter Elizabeth Mitchell — former executive editor of George, a political magazine, and author of “Lincoln’s Lie: A True Civil War Caper Through Fake News, Wall Street and the White House” — suggests there is even more to this story:

First Lady Mary Todd Lincoln spent freely, Mitchell writes, and had run up enormous debts — debts of which her husband was not aware.

She had worked with a number of “mysterious” people to try to settle those debts before the 1864 election.

In April 1864, Mary Todd had met with a Republican official in New York.

Howard was a Republican and was well known in Republican circles in New York City.

And, perhaps, most telling... Lincoln had — on May 17, in fact — drawn up an initial statement calling for 500,000 more men to fight in the war. But then he chose not to release it. When he was told about the news stories, Lincoln first checked to see if someone had erroneously sent his dispatch to telegraph offices.

Sources: “Lincoln’s Lie: A True Civil War Caper Through Fake News, Wall Street and the White House” by Elizabeth Mitchell, “The Life of Abraham Lincoln” by Abbott A. Abott, Museum of Hoaxes, Encyclopedia of American Crime, the Lincoln Institute, A Day in the Life of the Civil War, CivilWar.com, the New York Times, the Precious Metals Refining Blog

This edition of Further Review was adapted for the web by Zak Curley.