What type of goldfish is teh orange one? Comet, common goldfish, fantail etc etc?
You should divide the tank up if its big enough for both of them, or even better, buy a new tank for the bully goldfish to live in- goldfish do require very large tanks though, many goldfish varieties can get to over 9inches long easily if they are well looked after, some goldfish types are far more suited to ponds than tanks etc.
If you let the goldfish stay in the same tank together though undivided, the harrasment will continue- its very rare for bully fish to get out of their agressive habbits, particually if it is in their nature.
You should also be wary of finrot or columnaris, as these are common deseases that often set into damaged fins or wounds, or simply come about when the fish is stressed. Melafix and good water quality (do regular water changes with dechlorinator) and good diet should clear up the damaged fins in no time once the fish is separated from the bully. Some goldfish types really just don't mix very well though in general.
