Jay Cooke JAY COOKE, IN the times that tried men's souls, "the dark days of our revolutionary epoch, there was a time when there was the greatest possible danger that the sufferings, the bloodshed, and the sacrifices of our patriotic heroes, might all fail of accomplishing our independence, from the want of the sinews of war, the means of paying the troops, of supplying rations, clothing, arms, and ammunition. At this crisis, when, the treasury of the confederation was bankrupt, and there seemed no more room for hope, a Philadelphia banker, Robert Morris by name, came forward, and taking upon his own shoulders the financial burden of the nascent republic, obtained for it, by the pledge of his own credit and private re- sources, the aid it could not otherwise command. To this noble, self-sacrificing patriot, as much perhaps as to any other man of the revolutionary period, not less even than to Washington himself, do we owe it, that we are not, to this day, dependencies of the British crown.
At this juncture, when the ablest financial secretary who ever controlled the national treasury was almost in despair, another Philadelphia banker, Jay Cooke by name, brought to the aid of the Government his enterprise, financial skill and extensive credit, and undertook for a pittance which, if he had failed of complete success, would not have been sufficient to nave saved him from utter ruin, to negotiate and sell a loan of five hundred millions of dollars, an amount which would have staggered the Rothschilds. He not only accomplished this, but subsequently, to meet the pressing wants of Government, sold eight hundred and thirty millions more. More fortunate than Mr. Morris, in that he did not, in the final result, lose his own fortune, but by the extraordinary enterprise he manifested, paved the way for other and more profitable undertakings with private corporations, Mr. Cooke yet manifested a spirit as truly patriotic as Mr. Morris, and like him, is entitled to the honor of rescuing the nation from threatened bankruptcy. The Cooke family trace their lineage back to Francis Cooke, one of the godly and goodly men who formed the company which landed at Plymouth, Massachusetts in the Mayflower, in 1620, and who erected the third house built. in Plymouth. Of his descendants one branch emigrated to Connecticut, and another to northern New York. From the latter stock, some of the descendants If which are still living in Granville, Washington county, New York, came the father of Jay Cooke, Eleutheros Cooke, an eminent lawyer and political leader of northern Ohio, Eleutheros Cooke was born in Middle Granville, New York, received a collegiate education, studied law, and after practicing for a few years in Saratoga and its vicinity, removed, with a company of his neighbors, to the vicinity of Sandusky, Ohio, in 1817. Here he speedily attained distinction in his profession, ranking as the leading lawyer of that part of the State, and being the first Grand Master of the Grand Lodge of Ohio. An active and influential Whig, he was elected to numerous positions of trust and honor, was the representative of his district in the State Legislature for many years, and in 1831 was elected to Congress. In his early candidacy for the State Legislature he found his name (Eleutheros) a great disadvantage ; the illiterate Germans of Seneca county could not comprehend, or write it correctly, and he was at one time defeated, by the throwing out by Democratic judges of a thousand ballots for defective spelling. He determined thenceforward to give his children short and simple names. His eldest he called Pitt, after the great English minister; the second, Jay, after our illustrious chief justice, a third, Henry, and so on. Jay Cooke, the second son of this family, was born at Portland (now Sandusky), Huron county, Ohio, August 10, 1821. His early education was obtained at home, for there were few good schools in that region at that early period. But though it was home teaching, it was none the less thorough on that account. Mr. Cooke was very anxious to have his children well educated. When at home, he instructed them himself, and when absent, his wife, a well educated lady, undertook the work. In his more distant legal or political excursions, when-ever he found a book store, he laid in a stock of books for the household at home. The boys were all quick $o learn, and made progress in their studies. During Mr. Eleutheros Cooke's term in Congress, there was a very general time of financial pressure in the West, and on his return home, he found his affairs considerably embarrassed, and became somewhat de-pressed. Standing in his door one day, and seeing his three boys coming borne from school, (for there was at this time a school of some merit in Sandusky,) he went to meet them, and putting his arms around them, said, half sadly and half in jest, "My boys, I have nothing left for you; you must go and look out for yourselves." The elder and the younger remained silent and downcast, but Jay, then about thirteen years of age, looking up in his father's face with great earnestness, said, " Father, I am old enough to work. I will go and earn for myself." Mr. Cooke did not regard this remark as any thing more than an expression of the boy's affectionate and enterprising nature, and as he had no intention of turning either of his boys out, at That time, to earn their own living, he thought no more of it. But the next day, when the other boys went to school, Jay slipped away, and went to the store of a Mr. Hubbard, in Sandusky, and asked him to employ him as a clerk. Mr. Hubbard, who was doing a thriving business, happened to be just then in want of a clerk, having dismissed his only one a few days before, for dishonesty. Jay was a favorite of his, and admiring his artless ness and resolution, he forthwith employed him. That night, when Mrs. Cooke reproached the boy for playing truant, he replied, with a flush of noble independence, " Why, mother, I won't be a trouble to you any longer ; I am now earning for myself." The parents, after consultation, determined to let Jay work out his own destiny, and the next day, and every day thence-forward, the boy was at his place promptly, and proved so faithful, intelligent and apt as a salesman, and was so ready and quick at figures, that his employer formed a strong attachment for him, taught him book-keeping, and instructed him in other branches which he had failed to acquire at school. After some time, Mr. Hubbard's partner left him for a long journey, and Mr. Hubbard himself fell sick, so that the whole care of the store came upon Jay. He attended to it faithfully, and at evening took the keys and the day's receipts to his sick employer, with whom he staid usually -through the evenings. After he had been eleven months in Mr. Hubbard's employ, a Mr. Seymour who was about starting in business in St. Louis, prevailed on him to go with him to that city as clerk and book-keeper. The enterprise did not prove successful, and at the end of about nine months Seymour and Jay Cooke returned to Sandusky. While the latter remained at home for a time, awaiting a position, he attended an excellent school, in which he devoted his attention almost exclusively to algebra and the higher mathematics. In these he soon excelled. His only amusement was fishing, among the islands of Sandusky bay, a pastime which he still enjoys with all a boy's enthusiasm. After a few months of close application, his brother-in-law, Mr. William G. Moorhead, then, as since, largely engaged in rail-road and canal enterprises, and residing in Philadelphia, visited Sandusky, his former home, and perceiving young Cooke's proficiency in mathematical and mercantile studies, offered him the position of book-keeper in his office. Jay accepted and spent a year in Philadelphia, when the firm was dissolved, and Mr. Moorhead received the appointment from the Government, of consul to Valparaiso. Jay returned to Sandusky and entered the school again, when his father received a letter from Mr. E. W. Clark, of E. W. Clark &. Co., a leading banking firm of Philadelphia, asking permission. to take his son, Jay, of whom the firm had had very favorable accounts, into their establishment and give him a thorough training as a banker. The father, after some hesitation, decided to send his son to Philadelphia, and this proved the turning point in his fortune. The house of E. W. Clark & Co., was one or high reputation for probity and honor, and had its branches in Boston, New York, New Orleans, St. Louis, and Burlington, Iowa. It was at that time, and for several years, the largest domestic exchange banking house in the United States. Though not quite seventeen years old when he entered this house, Jay Cooke soon impressed the partners so favorably by his earnest zeal to understand thoroughly the whole business of finance, and his careful attention to business, that he was, for some time before he became of age, entrusted with full powers of attorney to use the name of the firm. An act of kindness thoroughly characteristic of him, at this time, was, during the war, perverted into an occasion of slander and abuse. It was stated by some of the daily papers in New York and elsewhere that he was of low origin, an obscure western banker, and that while in Philadelphia he had been bar tender to a third rate tavern. There was hardly the faintest shadow of truth, to serve as the basis of those preposterous stories. He was never a western banker in his life, but as we shall show presently had been for twenty-five years a member, and the real head of one of the largest banking houses in the country ; he was from an honored and distinguished family in northern Ohio, and his only connection with a hotel in Philadelphia consisted in the fact, that, during his first residence there, he boarded with an excellent family who owned a small hotel, and who were very kind to him during his stay. On his return he again took a room with this family, and finding that the worthy landlord who was somewhat advanced in years and in feeble health, was in some financial difficulty, and had been obtaining heavy loans of Messrs E. W. Clark & Co., who had at last became apprehensive of his solvency, he persuaded the old man to let him examine into his condition. He found that he was nearly insolvent, and that he had been plundered by dishonest bar-tenders and book-keepers. He accordingly volunteered to make up his cash account for him every night, when he came from his office, and to do this was under the necessity of entering his bar. He continued this kind service till the death of his old friend, and had the happiness of knowing that he had retrieved for him a part at least, of his fortune. For this he was sneered at, as a bar-keeper. At the age of twenty-one (in 1842), he became a partner in the house of E. W. Clark & Co., and remained in it until 1858, being for the greater part of that time its active business manager, and much of the time its real head. During this time Government had issued several loans, to which the firm had largely subscribed. In 1840, when but nineteen years of age, Mr. Cooke had written the first money article ever published in a Philadelphia paper, and for a year continued to edit the financial column of the Daily Chronicle, one of the three journals in the country, which then had a daily money article. On his retirement from the firm of E. W. Clark & Co., in 1858, Mr. Cooke had amassed a comfortable fortune, and had purposed to live thenceforth more at his ease. He still, however, negotiated large loans for railroad and other corporations, and attended, in a quiet way, to other financial operations. At the commencement of 1861, Mr. Cooke formed a partner-ship with his brother-in-law, Mr. William G. Moorhead, in the banking business, under the firm name of Jay Cooke & Co. The object of both partners was to provide business openings for their sons. Mr. Moorhead brought to the firm a long and successful experience in railroad matters. In the spring of 1861, when the Government sought to place its first loan, the firm of Jay Cooke & Co., procured and forwarded to Washing-ton, without compensation, a large list of subscribers. The State of Pennsylvania required a war loan of several millions, and it was negotiated mostly by Jay Cooke & Co., who succeeded in placing it at par, though it was at a time of great commercial and financial depression. These successful negotiations attracted the attention of the Secretary of the Treasury to their ability as financiers. Soon afterward, having failed to obtain satisfactory aid from the associated banks, Mr. Chase resolved to try the experiment of a popular loan, and to this end, appointed four hundred special agents, mostly presidents or cashiers of prominent banking institutions throughout the country. In Philadelphia, Jay Cooke & Company were selected, and they immediately organized a system which resulted in the popularization of the loan, and secured the co-operation of the masses in the subscription to it. Of the entire sum secured by the four hundred . agents, not quite thirty millions in all, one third was returned by Jay Cooke & Company. As this did not fill the treasury, whose wants were constantly increasing, with sufficient rapidity, Mr. Chase, after consultation with eminent financiers, determined to place the negotiation of the five hundred millions of five-twenty bonds, just authorized by Congress, in the hands of a special agent, as Congress had given him permission to do. Mr. Cooke's success in this small loan, led Mr. Chase to select him for the agent. He accepted the appointment, and organized his plans for the sale of the loan, with what success is now a matter of history. A bolder and more daring financial undertaking than this is not to be found in the records of monetary history. The risks were frightful, the compensation, if no sales were made, nothing; if they were effected, five eighths of one per cent. on the amount sold, which was to cover all commissions to sub-agents, advertising, correspondence, postage, clerk hire, express fees, and remuneration for labor and superintendence. The Government assumed no risks, and if the loan failed to take with the people, the advertising and other expenses alone would swallow up the entire fortune of Mr. Cooke and his partners. The commissions received by European bankers for negotiating such a loan, themselves assuming no risks, are from four to eight per cent and there was not another banking house in the United States which would have taken it on the terms accepted by Mr. Cooke; but his country was engaged in a deadly strife for the preservation of its liberties; it needed money in vast sums to conduct this gigantic struggle successfully, and if it did not have it promptly, the great sacrifices made already, would prove in vain. Some one, possessing an ample fortune, must have patriotism enough to take the risk, great as it was, and if it must be so, ruin himself in the effort to save his country. In the secretary's tendering him this position, first and unhesitatingly, there seemed to be a call of Divine Providence on him to undertake this great responsibility. He accepted it as a Christian and a patriot, and it is no more than the truth to say, that in the history of the war, no enterprise was undertaken from a higher motive, or from a loftier sense of duty and patriotism. His labors, during this sale of bonds, were incessant; " he was," says a banker, a friend of his, " the hardest worked man in America." Public opinion, in favor of the loan, was to be created and stimulated ; the loan itself was to be made accessible to all classes, and all were to be shown that it was for their interest and benefit to invest all their surplus, be it little or much, in these bonds of the nation; every village must have its agent, so that all parties, the sempstress, the domestic, the young journeyman, or the farmer's boy, who had but fifty dollars of their earnings to invest, the fruit of long savings and painful toil, might be as well and as promptly accommodated as the rich capitalist who wished to purchase his hundreds of thousands. Every loyal paper in the nation had its advertisements, and every vehicle of information by which the masses could be reached its carefully written articles explaining and commending the bonds. Over half a million of dollars were expended in this machinery, before the receipts began to come in. Mr. Cooke's partners were getting a little anxious, but his countenance was still sunny, and his faith in the loyalty of the nation, firm as a rook. Then, after awhile, the orders began to come ; first, like the few drops that betoken the coming storm, then faster and thicker, patter, patter, patter; then an overwhelming flood, that kept all hands busy till midnight, day after day. So great was the rush for the bonds toward the last, that when Mr. Cooke gave notice that no more could be sold after a certain day and hour, and that the five hundred millions were already taken, the orders and money poured in, till he was obliged to issue, and Congress to legalize, fourteen millions beyond the amount first authorized. It was a grand, a glorious success, and at once put Mr. Cooke in the first rank among the great financiers of the world; but the immediate pecuniary profit from it was very small. As we have said, the commission to cover all expenditures was but five-eighths of one per cent., and from this were paid the advertising, review articles, clerk hire, postage, and express fees, and one fourth of one per cent. commission to sub-agents. But this was not all the deductions which were to be made on this gross commission The nation, has never had an abler, nor a more really economical Secretary of the Treasury, than Mr. Chase. He was so careful, so scrupulous, in regard to the expenditures of his department, that even in these great enterprises, his economy almost approached to penuriousness. Though the sales of the five-twenty bonds were solely due to the almost superhuman efforts of Jay Cooke and the corps of agents whom he had trained, and he was entitled, therefore, to a commission on the entire amount, under the ordinary customs of financial transactions, a portion of the sub-agents had applied directly to the treasury department for their bonds, and Mr. Chase refused to pay him a commission on any of these, so that he actually received his commission only on three hundred and sixty-three millions. A selfish and mercenary man would have insisted on his right to the entire commission, and might very possibly have secured it, but it was from no selfish or mercenary motive that Mr. Cooke had entered upon this work, and he allowed the economical secretary, whose ability, integrity, and patriotism he never questioned, to settle the matter as he believed to be most for the interest of the nation. Mr. Chase believed that the popularization of this loan had so enamored the people with Government bonds, that he should find no difficulty in floating a five per cent. ten-forty loan, without the aid of the Philadelphia banking agency. He tried it, but the public mind was not prepared for it, and he projected a large issue of seven-thirty three year bonds, the interest payable in currency, and the bonds convertible at maturity into five-twenty six per cent. bonds, the interest payable in coin. Meanwhile the price of gold was constantly increasing, or rather the gold value of the currency was rapidly decreasing. The national banking system which he had inaugurated, and in which Mr. Cooke had rendered him most essential aid, was as yet an experiment, and for the want of some additional pro-visions, subsequently made by Congress, the State banks and many of the large public and private bankers of the great cities were fighting the national banks with great ferocity. This system was destined ere long to become a magnificent success, and to displace all the State organizations with a rapidity which reminded the observer of the transformation of the genii of Persian story; but for the present affairs looked gloomy. The great fighting was going on from the Rapidan to the James (for it was the early part of the great battle summer of 1864), and every department of the Government was calling for more men and more money, and as yet no great victories had presaged the coming overthrow of the rebellion. Sick at heart, worn down with excessive labor, and feeling that his great efforts had not been fully appreciated, Mr. Chase suddenly resigned, in June, 1864, and Mr. Fessenden, an able financier, though of less sunny temper, succeeded him. The rapid depreciation of the currency which ensued on the announcement of this change, is one of the cardinal points in the memory of the bulls and bears of our generation. In fifteen days, gold rose from 88 per cent. premium to 185 per cent., and there was -a fierce outcry against the Government, for all men feared impending bankruptcy. In this emergency, Mr. Fessonden applied to Jay Cooke, whose abilities ho well knew, to put his strong shoulder again to the wheel, and lift the Government out of the slough of despond, in which it was fast settling. The appeal was not in vain. Again the army of sub-agents was organized; again the loyal papers of every state teemed with advertisements, this time of seven-thirty bonds; again the pens of ready writers were in demand to write up the advantages of Government securities, and Mr. Cooke himself essayed the defence of the financial paradox, "a national Debt, a national Blessing" Again were the mails burdened with orders, and men and women, old and young, of all stations in life, hastened to secure the Government's promises to pay. Mr. Cooke and the houses with which he was in correspondence, had, meantime, opened the way for large transactions, at rapidly increasing prices, in our bonds, in Europe ; had diffused information, especially in Germany, Switzerland, and Holland in regard to them, till, early in 1865, nearly two hundred millions of United States Government bonds had been placed in Europe. This amount was subsequently still farther increased to between four and five hundred millions, and those bonds are to-day as regularly called at the boards of London, Paris, Amsterdam, Frankfort, and Berlin, as at those of our American cities. The success of the three series of seven-thirty loans, was as great as that of the five-twenties had been ; greater if we take into account the larger amount, the already great indebtedness of the Government, and the depressing circumstances under which they were first put upon the market. In less than a year eight hundred and thirty millions of these bonds were sold. During this period, a part of the time, the Government expenditure exceeded three millions of dollars a day, but soon, under the heavy blows of great armies well fed and clothed, and abundantly supplied with money and all the munitions of war, one stronghold of the enemy after another fell into our hands, victory resounded from one end of the country to the other, and the great rebellion was crushed. After the war, the house of Jay Cooke & Co., which still had its branches in Washington and New York, confined itself to the negotiation of loans for great corporate enterprises, dealing in Government securities, etc., etc., and still, in the vastness of its enterprises, the integrity and honor of its dealings, and the consummate financial ability which has marked all its operations, retains and is ever increasing its past prestige. On the 1st of January, 1871, Mr. Cooke established a branch of his banking house in London, under the firm name of Jay Cooke, McCulloch & Co., the resident head of the London house being Hon. Hugh McCulloch, the late able and trusted Secretary of the United States Treasury. The new American Banking house in London at once took rank beside the leading financial institutions of the Old World, such as the Barings and the Rothschilds. During the first year of its existence, and in co-operation, with the American branches of the house, it achieved a success in connection with United States Government finances which gave the house wide and deserved prestige, and brilliantly proved that the genius which enabled Mr. Cooke to accomplish such vast results in the troubled times of war, is also equal to the greatest and most difficult monetary negotiations in time of peace. Congress having authorized the Secretary of the Treasury to fund a large part of the public debt at lower rates of interest; in other words, to sell at par in coin new bonds bearing five and four and a half per cent. interest, and with the proceeds redeem an equal amount of outstanding six per cent. bonds, the Treasury Department attempted the negotiation of $200,000,000 new five per cents. After six months of active effort' both in America and Europe, and after exhausting all expedients, the Government had been able to sell only some $60,000,000, which amount was almost wholly taken by the National Banks of the United States. Secretary Boutwell then placed the agency for the sale of the new loan in the hands of Jay Cooke & Co., and Jay Cooke, McCulloch & Co. The latter, having associated with themselves several leading houses in London and New York, promptly brought out the loan on the markets of Great Britain and the Continent of Europe, and within twelve days of the first offering the remainder of the $200,000,000 was all sub-scribed and the loan closed. The brilliant success was as much a surprise to financial circles in Europe as it was a gratification to the United States Government. In opposition to the prevalent views of theoretical financiers in America, it practically proved that the entire public debt could be funded at such low rates of interest as to save our people a yearly expenditure of twenty to thirty million dollars. Soon after the successful closing of the $200,000,000 loan, the house of Jay Cooke, McCulloch & Co., and that of L. M. Rothschild & Sons of London, made a joint proposal to the United States Government, looking to the negotiation of a further amount of $600,000,000 of the new bonds, on terms similar to those attending the former. This proposition, coming from two such eminent houses, and covering the largest single negotiation known to modern finance, was favorably received by the Government, but diplomatic complications between the United States and Great Britain, growing out of the Alabama claims and the Treaty of Washington, temporarily postponed the final consideration of the matter. In addition to the above-named negotiations; and the general supervision of the regular and ordinary business of the several branches of his house, Mr. Cooke has since 1870 made something of a specialty of the finances of the Northern Pacific Railroad. After thorough and conscientious investigation his firm accepted the fiscal agency of this great corporation, and undertook the sale of its construction bonds. Under his careful and energetic financial management, this greatest commercial enterprise of the age is moving forward to assured success The building of this second highway to the Pacific is the leading agency in the settlement, development and civilization of the Northwestern part of the continent. Mr. Cooke still works hard, but he enjoys life, and whether at his city residence, or in that magnificent palace which his princely fortune has enabled him to rear in the vicinity of Philadelphia, or, in the summer months, at that beautiful country-seat on Gibraltar island in Lake Erie, where, as in boyhood, he enjoys trolling for the scaly denizens of the lake, he is the same sunny-faced, genial, whole hearted man, as when years ago he managed the affairs of E. W. Clark & Co. With all his hard work and great enterprises, the spirit of the boy has not died out of him. Mr. Cooke's liberality is as princely as his fortune. Throughout the war, he was lavish in his gifts to the Sanitary Commission, to the hospitals, to sick and wounded soldiers, to the Christian Commission, and to all good enterprises. Since the war, the recording angel alone can tell how many of our crippled veterans he has helped to attain a competency, how many soldiers, widows, and orphans he has aided and blessed, how many homes, made desolate by the war, he has cheered and brightened. To Kenyon college, Ohio, he has given twenty-five thousand dollars, and to a theological seminary of his .own church (the Protestant Episcopal) a still larger sum. In the vicinity of his home on Chelton Hills, near Philadelphia, he has built several country churches.
Many a country parson in a poor parish, with a scattered and illiterate population, whet just ready to yield to discouragement, has found his hear cheered, his faith strengthened, and his capacity for efficient labor greatly increased, by a visit to the hospitable home of the Philadelphia banker.
Source: Source: Men of Our Day; or Biographical Sketches of Patriots, Orators, Statesmen, Generals, Reformers, Financiers and Merchants, Now on the state of Action: Including Those Who in Military, Political, Business and Social Life, are the Prominent Leaders of the Time in This Country, by L. P. Brockett, M. D., Published by Ziegler and McCurdy, Philadelphia Penna; Springfield, Mass; Cincinnati, Ohio; St. Louis, Mo., 1872
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