Seemingly destined for a commercial career, Jay Cooke received a preliminary training in a trading house in St. Louis, Missouri and in the booking office of a transportation company in Philadelphia, and at the age of eighteen entered the Philadelphia house of E.W. Clark & Company, one of the largest private banking firms in the country. Three years later he was admitted to membership in the firm, and before age 30 was also a partner in the New York City and St. Louis branches of the Clarks.
| Table of contents |
|
2 Financier of the Civil War 3 Northern Pacific Railroad 4 Philanthropy |
In 1858 he retired from the firm, and for the next three years he devoted himself to reorganizing abandoned Pennsylvania railways and canals and placing them again in operation. On January 1, 1861 he opened the private banking house of Jay Cooke & Company in Philadelphia, and quickly floated a war loan of $3,000,000 for the state of Pennsylvania.
In the early months of the American Civil War, Cooke cooperated with the secretary of the treasury, Salmon P. Chase, in securing loans from the leading bankers in the Northern cities, and his own firm was so successful in distributing treasury notes that Chase engaged him as special agent for the sale of the $500,000,000 of so-called "five-twenty" bonds authorized by Congress on February 25, 1862. The treasury department had previously failed in selling these bonds.
Cooke secured the influence of the American press, appointed 2,500 sub-agents, and quickly sold $11,000,000 more of bonds than had been authorized. Congress immediately sanctioned the excess. At the same time, Cooke influenced the establishment of national banks, and organized a national bank at Washington and another at Philadelphia almost as quickly as Congress could authorize the institutions.
In the early months of 1865, with the government facing pressing financial needs in the wake of disappointing sales of the new "seven-thirty" notes by the national banks, Cooke’s services were again secured. He sent agents into remote villages and hamlets, and even into isolated mining camps in the west, and persuaded rural newspapers to praise the loan. Between February and July 1865 he disposed of three series of the notes, reaching a total of $830,000,000. This allowed the Union soldiers to be supplied and paid during the final months of the war.
After the war, Cooke became interested in the development of the northwest, and in 1870 his firm financed the construction of the Northern Pacific railway. In advancing the money for the work, the firm overestimated its capital, and at the approach of the Panic of 1873 it was forced to suspend. Cooke himself was forced into bankruptcy.
By 1880 Cooke had met all his financial obligations, and through an investment in a silver mine in Utah had again become wealthy. He died in Ogontz, Pennsylvania, on February 18, 1905. The Railroads
Financier of the Civil War
Northern Pacific Railroad